One of the most prominent commercial law developments that Libya has witnessed recently is the issuance of a code of conduct related to corporate governance.

Decree No 494 on Approving the Code of Conduct (“Decree”) became binding on both commercial entities and their employees in May 2022. This article will explain how the Decree applies to each of commercial entities and their employees and provide examples of the extensive obligations imposed.


The Decree applies to all types of companies governed by Law 23 of 2010 regarding commercial activities (“Commercial Entities”). These include: joint stock companies, joint liability companies, limited liability companies, partnerships limited by shares, partnerships, and almohasa companies that operate on a for-profit basis.

Although Libyan branches of foreign companies are not listed as Commercial Entities, the Decree is still considered to apply to such branches because they are referenced throughout the Decree. 

The Decree imposes a long list of new obligations on Commercial Entities and Libyan branches of foreign companies. A few examples are that such entities must:

  1. Publish on their official websites all information, procedures and decisions taken by these entities
  2. Update their websites with their latest news
  3. Adopt an internal oversight office to oversee companies’ internal decisions and their implementation
  4. Allocate at least 3% of their workforce to people with special needs
  5. Conclude a confidentiality agreement with all parties that they enter into contracts with; this confidentiality agreement must include provisions that prohibit conflict of interests, financial and administrative corruption, and breaching confidentiality
  6. Pay 1%-2% of their revenue/profits to social responsibility initiatives (to be calculated depending on the type of entity)


The Decree also applies to all employees of Commercial Entities and the Libyan branches of foreign companies. The obligations bind all levels of employees equally, including the board of directors, all management levels, and all other employees.  

Existing labour law requirements prior to the Decree already prohibited employees from working for another employer unless they obtain prior permission from their employer; and prohibited employees from accepting gifts in exchange for them fulfilling their duties. 

The Decree builds on those prohibitions by imposing a long list of requirements on employees, including: 

  1. Obey all laws and regulations issued by competent authorities;  
  2. Not prioritise their personal interest over their company’s objectives and interests;
  3. Devote their working hours completely to work;
  4. Avoid undertaking any activity that creates an actual or potential conflict between their work obligations and their personal interests and inform their employers in writing about any such conflict; and
  5. Not accept any valuable gift from someone that is receiving a service from, dealing with, or willing to create a relationship with the employee’s company.

The obligations in the Decree emphasize the ideals of corporate transparency, social responsibility and the responsibilities of employees to their employers. The set of rules outlines the norms and proper practices of doing business in Libya and as such influenced by the values and ethical principles of the country. 

We are closely monitoring the business community’s reaction to the Decree and how companies will comply. We are happy to provide additional information and advice in relation to the new obligations imposed by the Decree.

Our team at Eltumi & Co specialise in energy and infrastructure projects. We track developments in these sectors in order to provide commercial legal support to businesses operating in the sector. Follow our LinkedIn page for ongoing updates and insight.