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Hiring in Libya
Libya, officially known as the State of Libya, is a country in North Africa. Tripoli is the capital and the largest city of Libya. Libya is rich in oil, whereby it accounts for over fifty percent of the country’s GDP and over 95% of its exports. Libya’s main trading partners are Egypt, Italy, Turkey, China, South Korea and Tunisia. Global PEO or Employer of Record (EOR) play a pivotal role in providing companies with services related to hiring employees, and ensuring compliance with Libya’s legal and tax regulations. Employment regulations including probation, holidays and termination are covered by the Labor Code. Labor Code stipulates that employees are entitled to 30 days of annual leave. Libyan nationals and foreigners are subject to income tax taxed on income arising in Libya. Global PEO’s or Employer of Record (EOR) facilitate companies by ensuring compliance with Libya’s Labor Code and tax laws.
statutory labor requirements
Probation Period
- Probation period is generally for 30 days
Annual Leave
- The minimum entitlement to paid annual leave under Libyan Labor Law is 30 working days, which increases to 45 working days for those over the age of 50 years or who have attained 20 years' service.
- An employee can take 20 days' paid leave to perform Haj once in their employment.
Public Holidays
- Libyan Revolution Day (17th February)
- Commemoration of the Victory over Kadhafi (19th March)
- Labor Day (1st May)
- Eid al-Fitr
- Day of Arafat
- Eid al-Adha
- Islamic New Year
- Martyrs' Day (in Libya) (16th September)
- Liberation Day (23rd October)
- Prophet's Birthday
- Libyan Independence Day (24th December)
Maternity Leave
- The Libyan Labor Law entitles a female employee to 14 weeks' paid maternity leave, including a compulsory leave following delivery of not less than six weeks
Paternity Leave
- There is no statutory paternity leave
Sick Leave
- Laborer or employee is entitled paid sick leave or salary for a period not exceeding 45 continuous days or 60 days if not continuous during one year.
- In all cases, the sick leave should not exceed 3 months during each year
Work Hours
- Working hours should not exceed 48 hours per week and should not exceed 10 hours per day.
Overtime
- Employees are to entitled overtime at the rate of least 50% on the normal wages in addition to his wages
- Overtime hours should not exceed 3 hours
Notice Period
A local Libyan employee is only entitled to one month’s notice of termination, no matter how long the employee has been employed by the company.
Severance
- A local Libyan employee is not entitled to a payment on the termination of their employment (such as a redundancy payment in other jurisdictions)
13th / 14th Month Pay
- No
- There is no statutory requirement to pay the 13th or the 14th month salary.
- There is no evidence that bonuses are customary.
- Employer receive annual leave based on how long they have served and their age, for example 50 year olds that have served for over 20 years receive 45 days paid holiday.
income tax
- Libyan nationals and foreigners are subject to income tax on income arising in Libya.
- Libyan nationals and foreigners are considered to be resident if they satisfy any of the following conditions:
-
- They are Libyan.
- They are in Libya with a work visa.
- They undertake employment in Libya.
- Residence results in liability for Libyan personal income tax for the year of residence.
- Income tax is levied on employment income paid in cash or in kind.
- Individuals carrying out business activities independently, providing consulting services or engaging in technical, artistic or scientific projects are subject to tax on income derived from such activities.
|
Annual taxable income |
Rate (%) |
|
|
Exceeding (LYD) |
Not Exceeding (LYD) |
|
|
0 |
12,000 |
5% |
|
12,000 |
- |
10% |
deductible expenses
Personal Deductions
- Expenses that may be deducted include life insurance premiums, general insurance premiums, social security contributions and medical insurance contributions.
Personal Allowances
- Individuals may claim the following annual personal allowances:
- LYD1,800 for a single taxpayer
- LYD2,400 for a married taxpayer
- LYD300 for each dependent child, up to the age of 18
|
Deductible Expenses |
|
|
Personal Deductions |
|
|
Personal Allowances |
|
immigration
- A valid passport and entry visa are required to enter Libya.
- Libya offers the following types of temporary visas to foreign nationals:
-
- Transit visas, which are valid for a maximum of seven days
- Student visas, which are valid for 12 months and are renewable
- Tourist visas, which are single-entry visas valid for 30 days
- Business visas, which may be single-entry visas valid for 30 days, or multiple entry visas valid for 3, 6 or 12 months
- Residence/work visas, which are provided outside Libya if the individual will enter Libya with the intention of residing or working
- Foreign nationals must obtain a work permit to work in Libya.
- Foreign nationals who will work under an employment contract must obtain a work authorization, which is valid for up to one year.
- Foreign nationals may not be self-employed.
- After the period of validity for a work authorization or work permit expires, an individual may reapply for such items.
|
Type of Visa/Permit |
Documentation |
Validity |
Eligibility |
|
Tourist Visa |
|
30 days |
|
|
Business Visa |
|
30 days (single entry); 3,6, or 12 months (multiple entry) |
|
|
Work Permit |
|
1 year |
|
value added tax
- Libya does not levy a VAT or sales tax.
withholding tax
- WHT at the appropriate rate must be deducted from payments made to non-residents.
- The WHT rates are as follows (the tax is a final tax and the rate may be reduced under an applicable tax treaty):
|
WHT |
|
|
Dividends |
0% |
|
Interest |
0%/5% |
|
Royalties |
0% |
|
Technical Service Fees |
0% |
termination
- A local Libyan employee is only entitled to one month’s notice of termination, no matter how long the employee has been employed by the company.
- A local Libyan employee is not entitled to a payment on the termination of their employment (such as a redundancy payment in other jurisdictions)
statutory benefits
- These are mandatory benefits as postulated by law
- These include probationary period, annual leave, public holidays, sick leave, maternity leave, overtime pay, notice period, and severance pay
- Statutory benefits also include social security benefits
|
Statutory Benefits |
|
Probationary Period |
|
Annual Leave |
|
Public Holidays |
|
Maternity Leave |
|
Sick Leave |
|
Overtime Pay |
|
Notice Period |
|
Severance Pay |
|
Social Security Benefits |
payments and invoicing
- The tax year in Libya for individuals is the calendar year.
- Employees who have only income from employment are not required to file annual income tax returns.
- Individuals with non-employment income must file an annual tax return within 60 days after the end of the tax year (31 December).
- For such individuals, tax is payable in four quarterly installments, beginning on 10 March, with a 15-day grace period, or on the next day in a quarter after the issuance of an assessment.
ease of doing business
- The ease of doing business index is an index created by Simeon Djankov, an economist at the Central and Eastern Europe sector of the World Bank Group.
- Higher rankings (a low numerical value) indicate better, usually simpler, regulations for businesses and stronger protections of property rights.
- According to the World Bank Libya ranked 186th in the World in 2019 in terms of ease of doing business.
employee accruals
| Christmas Bonus% |
0% |
| Christmas Bonus Over Vacations % |
0% |
| Severance per Year % |
This is equivalent to remaining wages to be paid. |
| Vacations % | Employees are entitled to an annual holiday of 30 days (8.24% of annual salary) |
| Notice % |
Employees are entitled to 30 days of notice period for one year of service or more (8.24%) |
| Christmas Bonus Over Notifications% | 0% |
| Vacations Plus% | 0% |
| Total percentage of Salary (yearly) | The total employment accruals as a percentage of salary per anum are equal to 16.48% |
employer accruals
Additional information (Country Accruals)
| Social security | 10.50% |
| Maternity | 50days |
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|
Employer Accruals Additional information
| Employment Accruals | ||
| Annual Leave | The minimum entitlement to paid annual leave under Libyan Labor Law is 30 working days, which increases to 45 working days for those over the age of 50 years or who have attained 20 years' service. | This equals 8.22% (30/365 days) of annual income |
| Maternity Leave | The Libyan Labor Law entitles a female employee to 14 weeks' paid maternity leave, including a compulsory leave following delivery of not less than six weeks | This equals 26.9% (14/52 weeks) of annual income |
| Sick Leave | Laborer or employee is entitled to paid sick leave or salary for a period not exceeding 45 continuous days or 60 days if not continuous during one year. | This equals 12.32% (45/365 days) of annual income |
| Overtime | Employees are to entitled overtime at the rate of least 50% on the normal wages in addition to his wages. Overtime hours should not exceed 3 hours | Depends on the number of overtime hours worked |
| Social Security | Social security contributions are payable monthly on salaries, wages, bonuses and other compensation income. The contribution rate is 11.25% for employers |
This equals 11.25% of annual income |
