Foreign Ownership Rights for Off-Plan Properties under Libyan Law

Thank you for your question.

With regard to the acquisition of off-plan real estate in Benghazi by a foreign (non-Libyan) investor, it is important to clarify that, as a general rule under Libyan law, foreign individuals and foreign companies are not permitted to hold direct freehold ownership of land or real estate in Libya in the same manner as Libyan nationals.

However, there are recognized legal pathways through which a foreign investor may obtain enforceable and registrable rights over real estate developments, particularly when the investment is structured under Libya's Investment Law No. 9 of 2010.

In practice, the main route is as follows:

1. Investment Approval
The foreign investor must apply for and obtain approval for an investment project from the competent investment authority. The real estate development must form part of the approved investment project.

2. Rights over Land and Buildings
While outright freehold ownership of land is generally restricted, the investment authority may grant the investor long-term usage rights or usufruct rights over the land necessary for the project, including rights to construct and own the buildings erected on it for the duration of the project.

3. Off-Plan Developments
For properties under construction, ownership or usage rights are typically documented through:
- An approved investment decision,
- A land allocation or usage agreement,
- Construction permits issued by the relevant municipal authorities.
Upon completion, the granted rights may be formally recorded.

4. Registration
The granted rights (whether ownership of the constructed units or long-term usage rights) must be registered with the competent land registry to ensure legal enforceability.

5. Alternative Structures
Where full ownership is not legally available, foreign investors commonly rely on:
- Long-term registered lease arrangements, or
- Establishing a locally registered investment vehicle approved under the investment framework.

In summary, while direct freehold ownership by foreign investors is generally restricted, legally secure and registrable rights over off-plan developments can be achieved through proper structuring under the Libyan investment regime and full compliance with registration and permitting requirements.

Should you wish, I would be happy to review the specific structure of your proposed investment and advise on the most viable legal approach under current Libyan law.

Kind regards,
Basher Bumatary