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Mercans offers complete payroll, PEO and HR services in Libya

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.

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Doing Business in Libya

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 Many diplomatic missions and international organizations have withdrawn their presence due to security concerns.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)

Working Week

The standard working week is from Sunday to Thursday from 7:00 am to 2:00 pm in summer and 8am - 4pm in winter

Labor Law

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.

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Main Industries

petroleum, steel, iron, food processing, textiles, cement

GDP Growth


Dates & Numbers


Official State Name

Great Socialist People's Libyan Arab Jamahiriya


6.871 million



Major Languages



Libyan Dinar (LD)

Internet Domain


International Dialing Code


Tripoli, LY
9:28 am, June 14, 2024
temperature icon 24°C
clear sky
Humidity 63 %
Wind Gust: 12 mph


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

Annual Leave

Employees are allowed 45 days of sick leave with full pay

Sick Leave

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

30 days

Employee Termination

No legal provision

13th month salary

450 LYD per month

Minimum Wage

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

Severance Pay


Tax and Social Security

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


Sales Tax


Social Security

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

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.

Employment Agreement

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.

Working condition

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.

Employment termination

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.


30 days

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.


Residency permits

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

Required Documents

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.

Compliant, reliable, error-free and touchless payroll in Libya

Build the best team and hire top talent compliantly in Libya. Get in touch with Libya payroll outsourcing & PEO specialists for a free consultation!

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This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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