Mercans CountryIntel ® Libya Payroll And HR Insights
Libya’s per capita income is among the highest in Africa. Libya depends primarily on revenues from oil and natural gas as well as petrochemicals, industrial products, machines, transportation and foodstuffs. It possesses a substantial natural resource base, abundant human capital and access to lucrative trade routes. However, there is insufficient national cohesion and prolonged civil conflict.Download PDF
Libyan law may seem ambiguous so it is best to ensure the latest information is sourced and verified. Due to civil unrest and active terrorist activity, many countries advise against investment in Libya. Many diplomatic missions and international organizations have withdrawn their presence due to security concerns. As such, consular assistance may be limited. Companies who operate internationally and conduct multi-country payroll should take note that while English is often understood, government policy is that all official documents are in Arabic and official business be conducted in Arabic.
Entity Registration and Incorporation Requirements
Setting up a new business or expanding an existing one in Libya is straightforward. Choose how your company operates from a range of entity types which suit your individual circumstance.
Banking Hours: 7:00 am to 2:00 pm (summer); from 8:00 am to 3:00 pm (winter)
The standard working week is from Sunday to Thursday from 7:00 am to 2:00 pm in summer and 8am - 4pm in winter
Libyan employment law requires that a certain percentage of employees hired are Libyan. Provisions exist also for minimum wage, social security and protection for participating in trade unions.
petroleum, steel, iron, food processing, textiles, cement
Dates & Numbers
Official State Name
Great Socialist People's Libyan Arab Jamahiriya
Libyan Dinar (LD)
International Dialing Code
While the current minimum wage has been set, it’s been acknowledged that few will work for such a rate.
It is acceptable to provide employees with online payslips
Payroll report must be kept for 10 years
30 days of paid annual leave
Employees are allowed 45 days of sick leave with full pay
14 weeks of paid maternity leave, six of which has to be taken before the due date. Paternity leave is not officially recognised
Maternity & Paternity Leave
No legal provision
13th month salary
450 LYD per month
Maximum limit for overtime is set at 3 hours per day and paid at 150% of the standard salary rate
Required only for expatriates who receive half a year’s salary for every year they have been employed up to five years
Libyan and foreign nationals are subject only to tax on income derived from employment in Libya. An individual receives their salary less deductions for social insurance contribution, employee social solidarity fund contribution and any personal exemptions. Social security contributions are payable by all who work in Libya, including expatriates.
There is also a Jehad Tax which is assessed on the taxable income of individuals. Further, Palestinian nationals are subject to an additional 7% tax on income.
Corporate Income Tax
Personal Income Tax
Libya has reciprocal agreements with some countries where residents working in Libya are eligible for reduced rates of the social security contributions.
Social Security Rate
Social Security Rate for Employers
Social Security Rate for Employees
Employment law is regulated by law number 15 of 1981. Paying salary is one of the most important obligations of the employer and there are clear stipulations about how this needs to be met including paying the salary in the Libyan currency, not permitted to pay through debit cards nor replaced by benefits in kind or goods to fulfill the salary requirements.
Libyan law defines a work contract as every agreement between an employer and employee whereby the employee undertakes to work for the employer under his supervision in exchange for a share in the production or service or in exchange for cash. Contracts may be for a fixed term or indefinite term but a fixed term contract may not exceed two years (renewable once). Contracts that start out as fixed term but then continue past the specified end of the period will turn into indefinite contracts.
The rule of law has not been reestablished in Libya and general business conditions may be volatile. Intense fighting may occur in certain areas and there may also be public protests. Individuals who continue to work should follow the local authority advice on any curfews and travel restrictions that may be put in place.
Two weeks’ paid marriage leave is provided once during employment. A female employee is entitled to paid leave of four months, and 10 days, following the death of her husband.
Notice on termination shall depend on the type of contract in place. Unlimited term contracts require at least 30 calendar days’ notice of termination. Fixed term contracts can only be terminated by either party in certain specified circumstances. Where the reason for termination is not valid, the defaulting party will be liable to pay compensation to the other party.
Minimum notice period for terminating an employee
Total number of public holidays
Working hours per week
Total number of days for Compassionate & Bereavement Leave
Foreign employees cannot expect a work contract in Libya unless they possess a work permit and a residence permit issued by Libyan authorities. The contract (in the form of a written undertaking) must include the duration of the undertaking, rights and obligations of the employee, number of hours worked, length of leave period, salary and overtime, accommodation and insurance.
The work visa process must be initiated with the Work Department in Libya. The visa is typically granted for three months and can be renewed or extended when in Libya.
Work Permit validity
3 – 6 months
The Applicant should have a passport valid for at least six months from the date of application for the visa
Photocopy of the passport (first and last pages)
Two visa forms (photocopies are not allowed)
Two passport-sized photographs with a blue background
Cover letter from the applicant on the company letterhead stating the purpose and duration of stay
Invitation letter from associates in Libya
Confirmation of visa approval from the Immigration Department in Tripoli faxed directly to the Embassy (providing the name of the applicant along with passport details)
Visa cable number provided by the Immigration Department in Libya. This should be arranged by the local sponsor in Libya
The visa approval must be arranged by the business associates in Libya
A medical certificate of physical fitness and which confirms that the applicant is not suffering from AIDS or cholera is also required with an Arabic translation
The medical certificate shall be issued by an authorized medical centre.
Build the best team and hire top talent compliantly in Libya. Get in touch with Libya payroll outsourcing & PEO specialists for a free consultation!