Libyan Ministry of Economy introduces new hard currency allocation formula for companies
The Libyan Ministry of Economy and Trade in Tripoli has implemented a new system to determine foreign trade transaction limits for companies. This mechanism ties the volume of letters of credit and foreign transfers to a company's actual economic activity, its contribution to production, employment, and public revenues. The annual ceiling for each company will be calculated as 30 times the average general income tax paid over the past three years, plus 10 times the average payroll tax for the same period. This formula prioritizes active companies with higher tax compliance and more registered employees, aiming to prevent shell companies from accessing foreign currency. The Ministry stated that this initiative seeks to improve foreign currency allocation, boost tax compliance, encourage employment and disclosure, and align foreign trade with the actual scope of company operations. This mechanism is a temporary measure until a comprehensive financial solvency classification system is finalized, which will use broader indicators like financial capacity and transaction regularity to set future ceilings.
