A DRIVE down Gargaresh Street in central Tripoli suggests that foreign investors are having a ball in post-revolution Libya. Debenhams, a British department-store chain, opened last month. Young Libyans flock to Cinnabon, an American purveyor of sticky buns that arrived last year. BurgerFuel, a New Zealand chain, plans to launch. “Business is booming,” boasts Husni Bey, a local industrialist whose company runs the franchises for several Western chains.

Franchising is a relatively low-risk way of getting into this growing market of 6m people. But few foreign firms have yet been brave enough to set up their own operations. Investors who two years ago lauded Libya as a new frontier after 42 years of rule by Libya’s eccentric dictator, Muammar Qaddafi, now speak in sombre tones. Trade delegations have stopped arriving so frequently. “Many firms are fed up with drinking tea and being nice but getting no further,” says Alex Warren, the editor of Libya Report, a business website.

Libya remains tempting. The oil-rich country is virgin territory. Recent rises in state salaries have made Libyans, already well-off for this part of the world, keen to spend. So is the government, since the country’s infrastructure is so poor. Before the war it signed deals to build roads, railways, houses, hospitals and schools. Now that international sanctions have been lifted, investment should be pouring in.

One problem is insecurity. Benghazi, the country’s second-biggest city, is still a no-go area for Americans, Britons and the French. But rampant militias are not the main deterrent, says Kevin Virgil of Pathfinder Capital: his London-based investment firm also works in Iraq, which is getting much investment despite being at least as dangerous.

The bigger worry is red tape. Muddled property rights make it difficult to buy land or provide collateral for loans. A well-meaning attempt to stamp out corruption has slowed down enterprise. In the World Economic Forum’s competitiveness rankings Libya is 108th out of 148 countries.

The new authorities took a step backwards last year by enacting a law capping foreign ownership in smaller joint ventures at 49%, down from 65%, while increasing the minimum investment to 1m dinars ($800,000). Those seeking 100% ownership must put up at least 5m dinars of capital. An odd rule requires the foreign partner firms to be at least ten years old. These restrictions suit a new oligarchy, incorporating many who were cosy with the old regime, which has access to capital unavailable to local investors and to connections that foreigners lack. This year International Hospitals Group, a British health-care provider, signed a deal, said by local media to be worth 2 billion dinars, to build nine clinics. But the government is scared to sign many such contracts because its mandate is temporary—a new constitution and elections are due next year. Cranes stand idle over half-finished buildings. Most contracts negotiated under the old regime are yet to restart. Militias are blockading oil ports, including the two most important, Sidra and Ras Lanuf. That has disrupted oil exports, which were almost back to pre-war levels—the most positive sign of economic recovery. A few foreign firms are being brave, especially ones from Turkey, South Korea and China. Turkey’s TAV Construction has restarted work on expanding Tripoli’s airport. A Marriott hotel in the capital, part-owned by Daewoo of South Korea, is being reopened. Chinese companies are building railways and housing. Last year Turkish exports to Libya almost tripled in value to $2.1 billion. Turkish Airlines has started new routes to the thriving third city, Misrata (see article), and Sebha.

Mr Virgil remains hopeful. His company plans to invest in the next 12 months. Banking is just one sector that needs reform and does not involve dealing directly with the government. “For those willing to go on the ground and take a punt,” says Mr Virgil, “there are profits to be had.”