Investment Freedom 10.0 no change
Foreign investment does not receive national treatment, and new investment is screened by the government. At least 35 percent of a non-Libyan business must be controlled by Libyan individuals or companies. Bureaucracy is non-transparent, complex, inefficient, and subject to political influence. Residents and non-residents may hold foreign currency accounts with prior approval. Repatriation and most capital transactions, including transactions involving capital, credit operations, and direct investment, are subject to controls, including approval requirements. Foreigners may not own land in most cases.
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Financial Freedom 20.0 no change
Libya’s highly centralized financial system remains subject to considerable state influence. The government, which nationalized all banks decades ago, recently eased banking laws to allow financial liberalization and privatization. The government has recently privatized 15 percent of one of the two largest state-owned banks and two new banks have been granted licenses. However, private banking institutions are unable to compete with state-subsidized companies. The banking sector is still dominated by four banks that are fully or majority-owned by the Central Bank of Libya. These four banks account for more than 90 percent of assets. The high cost of credit and limited access to financing impede private business development. Legislation passed in 2005 permits foreign banks to open branches.
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Property Rights 10.0 no change
The Libyan government eliminated all private property rights and most private businesses in 1978. The renting of property was declared illegal, and ownership of property was limited to a single dwelling per family, with all other properties being redistributed. The judiciary is not independent, the private practice of law is illegal, and all lawyers must be members of the Secretariat of Justice. There is little land ownership, and the government has the power to renationalize any property that has been privatized. Foreign companies are especially vulnerable, and the government has a history of expropriation. Trademark violations are widespread. Libya is ranked 113th out of 125 countries in the 2010 International Property Rights Index.
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Freedom From Corruption 25.0 -1.0
Corruption is perceived as widespread. Libya ranks 130th out of 180 countries in Transparency International’s Corruption Perceptions Index for 2009. Government integrity is undermined by favoritism based on personal and family connections. The Qadhafi clan exercises near-total control of major government decisions.
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Labor Freedom 20.0 no change
Unemployment and underemployment are chronically high. The labor market is tightly regulated and subject to government directives. Labor law specifies minimum wage rates, the number of work hours, night shift rules, and dismissal regulations.
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