Banking, Money and Taxes in Libya
Because of the ongoing tension, the banking infrastructure in Libya is unreliable. Due to this instability, many international banks have also been withdrawing from the country. This leaves most banks in Libya being run by the state. Though it is possible to open a bank account, most foreign workers prefer to have their salaries deposited into off-shore bank accounts.
When leaving Libya to go to another country for a vacation, be sure to get a receipt for any money exchanged at the bank. Sometimes, in an attempt to minimise money laundering, the airport authorities will ask if an expat is taking any Libyan currency or even other currencies out of the country.
The currency in Libya is the Libyan Dinar (LYD), which is divided into the following denominations:
• Coins: 1, 5, 10, 20, 50, 100 dirhams and ½, ¼ dinars
• Notes: 1 LYD, 5 LYD, 10 LYD, 20 LYD, 50 LYD
The Central Bank of Libya (CBL) is the monetary authority in Libya. This bank issues currency and oversees all the other state and private banks. Several commercial banks have branches located throughout Libya.
Though it is possible for expats to open a local account with their residency papers and passport, most opt to use their international accounts instead. Money can easily be wired into Libya using Western Union and MoneyGram, although transaction limits apply.
Interest rates at banks in Libya as well as banking services offered vary greatly. It’s best to compare institutions when choosing where to bank. Factors to consider include fees and the number of branches and ATMs available in the country.
Credit cards and ATMs
Libya is a cash economy and credit cards are seldom used. There are a number of ATMs in Tripoli and Benghazi. Many of these ATMs aren’t very reliable and banks charge high rates for use. Some of these machines accept only Visa while others will take both Visa and Mastercard.
Expats withdrawing money in Libya from off-shore banks will want to arrange accounts with major international players; many of the small credit union banks have trouble connecting with the ATMs in Libya. Furthermore, it is advised to set a maximum daily limit on the ATM card before relocation as a precaution against theft.
Anyone working and receiving a salary in Libya is liable to pay personal income tax. Most foreigners working in Libya hire a tax expert to ensure that they pay their taxes correctly. An expat’s employer may also be able to help them establish their tax liabilities.