third annual investment report for the year /2008/sia.gov.sy/userfiles/reports/sia_report...

SYRIAN ARAB REPUBLIC Prime Ministry Syrian Investment Agency

Third Annual Investment Report For

The Year /2008/

Syrian Investment Agency’s Third Annual Report for the Year 2008

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Excerpts From President Bashar Al-Assad’s Speeches

Most economic sectors have been opened to private projects, and reform procedures offered quite an important impetus to investment in all economic spheres; number of decisions had been issued concerning the development of public sector, treatment of its productive, administrative and financial status.

We embarked on establishing a number of industrial cities, free zones that succeeded in attracting promising investments.

Undoubtedly, we have to complete the suitable circumstances for investments, versifying the same, steering them towards promising sectors in our country, surpassing all bureaucratic hinders that prevents this, especially that we had already developed laws that regulate investment, providing all facilitating procedures. It was encouraging that values of endorsed projects have reached SP /470/ milliard, and in tourist sector SP /100/ milliard. What matters, of course, is implementation; we have to do our best to materialize all these projects on the ground.

It’s important to adopt regional planning in our development policies, in order to steer our future projects in proper direction, by putting an economic, social, educational and investment clear chart, according to requirements, on one hand, and occupational status of the regions, on the other, within the framework of achieving a balanced and just development, that form an integrated part with the heading towards administration decentralization in our current plans, in a way that ensures efficient comprehensive development on the level of each region.

Excerpt from President Bashar’s Speech before People’s Council, on Constitutional Oath for the Second Presidency Term.

If economy forms a political lever, and the strong basis for achieving a better build-up of Arab Common Work, then the availability of political will, along with common absorption by political leaderships, of the importance of economic co-operation, will push forward the wheel of economic reaction and integration .

Economic Integration will mitigate loss, and supply protection under any global or regional crisis, that may arise in the future, and will increase our abilities under severe international competition, in all circumstances; it will re-steer the Arab investments to their natural context, achieving development in its comprehensive concept .

I hope that this summit shall be one of decisions, not one of reconciliation, in what serves our Arab Economy, serving our national and human principles, encouraging investment among our countries.

From President Bashar Al-Assad’s speech, as Head ofArab Summit at the Inauguration of the First Arab Economic Summit in Kuwait


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Syria .. Is a Blessed Country

HE Prime Minister & Chairman of Higher Council for Investment Eng. Mohammed Naji Ottri

We have had a positive climate in Syria, making it a pole of attraction for local, Arab and foreign Investment. Syria welcomes both Arab and Foreign Investors, providing them with all facilitating services and procedures. Investment in Syria offers ensured returns, and high benefit.

HE D. Prime Minister for Economic Affairs, Abdullah Al-Dardari

Syria offers all facilities to make investment a success, it may also benefit from all expertise that may be useful in developing business and investment.

HB General Mufti of the Republic Dr. Ahmed Hassoun, and HB Patriarch Ignatius the 4th., Hazeem

Of the most superb moments in The Expatriates Conference was the moment HB General Mufti of the republic and HB Patriarch Ignatius the Forth Hazeem, crossed hands together in a manner expressing the brotherly climate, which prevails amongst religions in Syria. Where he addressed the crowds in a nice eloquence which touched the core of hearts, since the message is the same: Syria is the country of peace and security and expatriates should have to invest in it. Then The Mufti concluded his speech saying: “ Syria is a blessed country, and that who invest in it a legal pound will receive a hundred in return. “

HRH Al-Walid Bin Talal * We have found investment in Syria very good and fruitful, thus we embarked on conducting the Intl., Project of “ The Four Seasons Hotel “ . And we were quite happy when we did not find remarkable hindrances. * Syria can enter the door of development and investment , from its wider entrances, and this is what we all look forward to achieve. * Congratulations to us all for Noble, Truthful and Sincere Syria, and we congratulate Syria for its President Bashar Al-Assad. It is always a good omen to inaugurate this economic project, which will certainly reflect well on other projects in the loving homeland, which is my commitment Your Excellency The President, and that of my partners in The Kingdom Hotel Company.


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Head & Members of The Syrian Investment Agency / SIA/

Mr. Abdullah Al-Dardari D. Prime Minister for Economic Affairs Chairman of The Board

Dr. Ahmed Abdul Aziz D.G., Syrian Investment Agency / SIA/ Vice Chairman of The Board

Mr. MHD Seif Eddin D.D.G., Syrian Investment Agency / SIA/ Mr. MHD Harzoun Director of Legal Affairs / SIA / Mr. Abdul Karim Khalil D.One-Stop-Shop / SIA / Mr. Numan Jablawi D. Administrative Affairs / SIA/ Eng., Najib Barakat Representative of Chambers of Commerce

Union Eng., MHD Al-Shaer Representative of Chambers of Industry

Union Eng., Omar Al-Shalit Representative of Chambers of Agriculture

Union


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Preamble : Syrian Investment Agency/ SIA /, has the pleasure to present its annual investment report for the year 2008, which lays the basis for a new course of recognizing the main developments witnessed by Syrian economy in general and investment in particular, stressing more on the investment statements by application of Investment Encouraging decree No. /8/ for the year 2007, by getting use of SIA’s database, which specifies the development occurring on the investment & works environment in Syria. For investment in Syria, has become in recent years, an everlasting success process, not with regard to the volume of direct investment flow only, but its steering towards real economic sectors such as industry, agriculture, tourism, banking, insurance, financial services, communications and information technology. The thing which kept the Syrian economy far from the repercussions of the international financial crisis; for the attraction and returns that characterize investment in particular and the Syrian Economy in general, which is characterized as real economy, made Syria the most safe haven for investment. It indicates also the privileges of policies adopted by the government in supporting investment. The report’s consists of six main chapters: • Chapter One: it presents an evaluation of main developments on total economic levels. • Chapter Two: it depicts the improvement of investment climate. • Chapter Three: it discusses the developments in the fields of investment as per

Investment Law No. /10/ for the year 1991, and Investment Encouraging decree No. /8/ for the year 2007.

• Chapter Four: it casts a general outlook at investment actual status in other activities and fields of the economy.

• Chapter Five: it specifies the status of Foreign Direct Investment ( FDI ). • Chapter Six : suggestions, recommendations and extruded outcomes. At the end of 2008, the services of the One-Stop-Shop were put in actual application, supplying its services to several investment projects, through representatives duly empowered by their relative ministries, and governmental authorities, at a single place which is The Syrian Investment Agency, which has had the biggest effect on supplying the suitable investment climate, in addition to the release for the first time of the Investment Map in Syria, with what it contained of investment chances, along with information necessary for the investor, planner, researcher and decision maker. The thing which represented an important impetus for investment climate in Syria. Anyhow we do not pretend that we are satisfied with what we had achieved; yet we promise to attain more developments and utilities that will spur and support investment projects in Syria, leaving ample space for ideas, expertise and opinions. The report depends mainly on statements that were available at SIA, that we try always to enrich, in addition to what was provided by ministries and other entities, that deserve our best regards and estimation for their kind co-operation, looking forward to making this report subscribe to the proper presentation of the investment climate and environment in Syria.

Only God We Ask For Success

D. G. Dr. Ahmed Abdul Aziz


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Contents Preamble 5 Chapter One: Total Economy Indicators 8

1 Economic Growth Trends 8 2 General Budget 8 3 Economic Variables In National Economy According to National

Accounts. 9

4 Inflation rates 12 5 Per Capita, of Gross Domestic Product ( GDP). 12 6 Rates of Unemployment. 13 7 Trade Balance. 13 8 Payment Balance. 14 9 Tax System in Syria. 14

Chapter Two: Investment Climate: 19 1 Improvement of Investment Climate in Syria 19 2 Main Economic & Political Developments Positively Affecting Investment

Climate during the year 2008. 20

3 Future Outlook on Investment Climate. 23 4 Investment Regulating Laws in Syria. 24 5 Institutional System. 24 6 Investment Environment Enhance Project. 25 7 Investment Promotion 26

Chapter Three: Investment as per Investment Law No./10/ for 1991, & Investment Encouragement decree No. /8/ for 2007.

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First: Industrial Sector: 34 a. Licensed Industrial Investments 34 b. Implemented Industrial Investments. 36 c. Other Industrial Investments. 36 Second: Industrial Cities: 37 a. Hasia Industrial City’s Investments. 38 b. Sheikh Najjar Industrial City’s Investmetns. 39 c. Adra Industrial City’s Investments. 40 d. Deir Ezour Industrial City’s Investments. 41 e. Total Investments of Industrial Cities. 41 Third: Transport Sector: 42 a. Licensed Transport Investments 42 b. Implemented Transport Investments. 43 Forth: Real Estate Sector: 43 Licensed & Implemented real estate Investments. 43 Fifth: Agricultural Sector: 44 Licensed & Implemented Agricultural

Investments. 44

Sixth: Health Sector 45 a. Specialized Hospitals. 45 b. Manufacturing of Medicines & Medical

Equipments. 46

Seventh: Oil & Mineral Resources and Power Sector: 46 Oil & Mineral Resources and Power, licensed

and implemented Investments. 46

Eighth: Investments Projects Distribution According to Governorates. 47


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Ninth: Investments projects distribution according to Legal Formula. 48 Tenth: Estimated investment projects job opportunities. 50 Eleventh: Volume of machineries and equipment imported for investment

projects. 51

Twelfth: Volume of investment costs of investment projects. 51 Thirteen: Expansion of current projects. 52 Chapter Four: Current status of investment in other sectors and activities. 53 First: Tourism Sector: 53 Second: Financial &

educational sector: 1.Private banks. 58

2. Insurance 59 3. Financial brokerage. 60 4. Free Zones. 60 5. Higher Education 61 Chapter Five: Foreign Direct Investment ( FDI ) 62 a. Net flow of FDI 62 b. Licensed Foreign Projects. 62 c. Executed Foreign Projects. 65 Chapter Six: Suggestions, recommendations and reached results. 66 Conclusion: 68 Appendices: 69 Investment VIP list. 69 Arab & Intl., Pacts’ List. 72 Governmental entities’ address List. 76 Most Important electronic site List. 78 General Indicators. 79 Questions of importance to investor. 80 Impetus & Exemptions. 81


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Chapter One: Total Economy Indicators:

The Syrian economy passes through a real transformation stage, represented by continuous growth of economic rates, supported by a quite large group of reform procedures, commenced by the Syrian Government, aiming at making the Syrian Economy quite an advanced economy, that depend on transparent policies, operating within the frame of strong law and active establishments. Economic growth achieved quite good rates, and it’s quite possible that these rates will continue for the next years to come. Policy makers save no efforts to keep the high rates of economic growth, concentrating on keeping the business environment in Syria free of all impediments. Following is an exposure of the most important developments in total economy since the beginning of the third Millennium. 1) Trends of Economic Growth: General National Product / GNP/’s growth record during ( 2001-2008) was a positive one where it ranged between ( 5.1 – 6.5 % ) while preliminary statements indicate ( 6.3%) in 2007, and ( 6.5%) in 2008.

Figure (1) Economic Growth Rate during the period 2002- 2008

5.15.9

1.1

6.7

4.55.3

6.3 6.5

012345678

2001 2002 2003 2004 2005 2006 2007 2008

Source: Central Statistics Bureau’s statements – Statements of 2008, expectations. 2) General Budget: Due to the development of the general budget of the state, the bulk of increase in the budget appears clearly in both its sections ( Investment & Current) during the last seven years with a rate of (38.5%), thus the investment budget bulk increased in the rate of ( 23.3%) and Current Budget increased in the rate of ( 49%) during the same period, the following table shows this growth:


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Table No. (1) Development of General State’s Budget ( 2003-2009)- Milliard SP Years Investment Current Total 2003 211 209 420 2004 217 233 450 2005 180 208 460 2006 195 300 495 2007 258 330 588 2008 230 370 600 2009 275 410 685

Increase Rate 23.2% 49% 38.5% Source: Ministry of Finance’s Statements. Table No. (2) Executed Operations of the General State’s Budget ( 2000-2009)- million SP

Statement 2000 2001 2002 2003 2004 2005 2006 2007 2008* 2009* Total returns 245574 305286 301660 320939 342465 356290 434865 459571 407800 458942

Current Returns 170872 226325 221583 236122 238242 251509 296625 301350 308497 331324

Investment Returns 74702 78961 80077 84817 104223 104781 138240 158221 99303 127618

Total Expenses

246193 274831 314050 353651 405145 431402 493700 520531 600000 685000

Current Expenses

151297 164761 178332 200780 248497 277044 317213 325697 370000 410000

Investment Expenses

94896 110070 135718 152871 156648 154358 176487 194834 230000 275000

Deficit -619 30455 -12390 -31607 -62680 -75112 -58835 -60960 -192200 -226058 Gifts 3792 0 0 1105 0 0 0 259 0 0 External Loans 15180 11796 11456 9708 11572 14769 14159 13119 10650 12296

* Estimated : Source: Ministry of Finance’s Statements. 3) Economic Variables in National Economy, According to National Accounts: Despite the effect of numerous negative factors on plans put for various economic activities, production and produce have maintained the general growth trend in 2008, according to special estimation statements of production and produce for the year 2008, which is considered the third year of the five year plan, which included aspiring, factual trends and objectives of the Syrian economy during the five years. The most important of which is to achieve an increasing economic growth rate at the end of the plan, giving importance to social services especially education, health, potable water and housing. a. Total National Product in Fixed Market Prices for 2000: GDP increased under fixed prices to reach in 2008 to SP ( 2332238 ) milliard that is with an increase of (4.44%) above 2007; the increase reached (6.6%) over 2006, the increase comprised some economic sectors such as: trade, transport, finance, insurance and services; the agricultural and irrigation sector subscribed with the rate of ( 12.4%); and extraction industry with ( 7.9%) ,and converted industries(25.7%) ,trade(15.1%) services about(13.6%), transport and storage(10.1%) and the rest with (15.2%) as specified in the following table:


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Table No. (3) General Local Product in fixed prices of 2000 (SP, Millions) Economic

Sectors 2006 *2007 **2008

Product Value

Subscription Product Value

Subscription Product Value

Subscription

Agriculture & Irrigation

432713 20.7 375675 16.8 290280 12.4

Strategic Industries 191566 9.1 178031 8 184199 7.9

Converted Industries 475229 22.7 527576 23.6 598258 25.7

Electricity & Water 64217 3.1 68495 3.1 78630 3.4

Building & Construction

138959 6.6 151229 6.8 178032 7.6

Whole Sale & Retail

Trade 267884 12.8 334218 15 352392 15.1

Transport, Storage

198126 9.5 222084 9.9 236414 10.1

Finance, Insurance & Real estate

63590 3 77569 3.5 18527 3.5

Social Services 239257 11.4 286318 12.8 316112 13.6

Charges 23001 1.1 11897 0.5 16392 0.7 Total 2094542 100 2233092 100 2332238 100

Source: Statements of the Central Statistics’ Bureau ** expectations. To be added to this the expectation of private sector’s subscription increase in GDP according to fixed prices, from ( 52.3%) in 2000 to ( 59.7%) in 2008, this conformed negatively with the decrease of the subscription of the Public Sector in GDP from (47.7%) in 2000 to reach ( 40.3%) in 2008, as specified in the following table: Table No. (4): Public & Private Sectors’ contribution in Domestic Product, in fixed prices ( SP

Millions).

Years Production Subscription Rate

Public Sector Private Sector Total Public Private Total

2000 742303 814816 1557119 47.7 52.3 100 2001 722007 908607 1630614 44.3 5.7 100 2002 749017 960752 1709769 43.8 56.2 100 2003 720402 1025040 1745442 41.3 58.7 100 2004 779479 1069296 1848775 42.2 57.8 100 2005 789048 1195162 1984210 39.8 60.2 100 2006 831872 1262670 2094542 39.7 60.3 100 2007* 858575 1374517 2233092 48.4 61.6 100

2008** 939444 1392793 2332238 40.3 59.7 100 * Preliminary statements, ** expected statements, source: Central Statistics Bureau’s statements. b. GDP According to Fixed Market Prices for 2000: Also the growth rate of Domestic Product has increased in fixed prices from (5.3) in 2006 to reach in 2007 (6.3); preliminary estimation indicate (6.5%) in the year 2008.


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Table No. (5) Total Domestic Product in fixed prices ( SP Millions)

Economic Sectors

2005 2006 2007* 2008** Produce

Value Subscription Produce Value Subscription Produce

Value Subscription Produce Value Subscription

Agriculture & Irrigation

265504 23.1 292457 24.1 262289 20.4 203196 14.7

Extraction Industry 188242 16.3 179765 14.8 164611 12.8 199761 14.5

Transform. Industries 77295 6.7 80738 6.7 101123 7.9 135604 9.8

Electricity & Water 20992 1.8 27637 2.3 30513 2.4 37922 2.8

Building & Construction

36438 3.2 50593 4.2 55101 4.3 64828 4.7

Wholesale &

Installment trade

233945 20.3 222230 18.3 262781 20.4 252677 18.3

Transport & Storage

125464 10.9 136902 11.3 154000 12.0 163974 11.9

Finance & Insurance and Real

estate

56582 4.9 57088 4.7 70217 5.5 79851 5.8

Social Services 152702 13.3 165080 13.6 206262 16.0 193223 14.0

Charges -5702 -0.5 -1151 -0.1 -18896 -1.5 47285 3.4 Grand Total 1151462 100 1211339 100 1288001 100 1378321 100

Source: Statistics Bureau’s statements, * Preliminary statements, ** estimated statements. Statements show increase in private sector contribution in GDP, in fixed prices from (56%) in 2000 to (62.8) in 2008, on the other side, Public Sector’s subscription decreased as specified in the following table:

Table No. (6) Public & Private Sectors Subscription in GDP, in Fixed prices of 2000 – 2008 ( SP Millions)

Years Product Product Subscription Rate%

Public Sector

Private Sector Total Public Private Total

2000 397560 506384 903944 44 56 100 2001 387529 562716 950245 40.8 59.2 100 2002 401534 604897 1006431 39.9 60.1 100 2003 376123 641496 1017619 37 63 100 2004 424902 661089 1085991 39.1 60.9 100 2005 407861 743601 1151462 35.4 64.6 100 2006 417488 793861 1211339 34.5 65.5 100

2007** 440873 847128 1288001 34.2 65.8 100 2008* 513105 865217 1378321 37.2 62.8 100

* expected statements ** preliminary statements Source: Statistics Bureau’s Statements.


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C. Capital formation ( Investments, Public & Private Sectors): Capital formation rate of GDP in National Economy reached (22.9%) in 2007, in fixed prices for the year 2000, in what is equal to (294.9) milliard Syrian Pounds, the Public Sector subscribed with the rate of ( 46.2%) of it, and private sector with (53.8%) versus ( 22.6%) in 2006, in what is equal to SP (273.4) milliard, where Public Sector subscribed with the rate of (47.4%) of this total composition, and the private sector with (52.6%), it is noticeable that private sector subscription surpassed that of the public sector in the development plan during the period ( 2003-2007) as specified in the following table:

Table No. (7) Public & Private Sectors subscription in the Capital Formation ( SP Millions)

Years Product Product Subscription Rate%

Public Sector

Private Sector Total Public Private Total

2003 147087 87731 234818 62.6 37.4 100% 2004 135770 145649 281419 48.2 51.8 100% 2005 146688 162925 309613 47.4 52.6 100% 2006 129720 143701 273421 47.4 52.6 100% 2007 136400 158532 294932 46.2 53.8 100%

Source: Statistics Bureau’s Statements.

0

50000

100000

150000

200000

2003 2004 2005 2006 2007

Figure(2) Participation of Public and Private Sectors in Capital Formation

Public

Private

4) Inflation: Statistical statements indicate a change in inflation rate during the period between ( 2000-2008) which amounted to ( 9.8%) in 2000 and vibrated to reach (11.6%) in 2005, then to recede to (8%) in the year 2006. Statistics Bureau’s Statements indicate its decrease to (5.4%) in 2008.

Table No. (8) Inflation Rates During ( 2000-2008)

Years 2000 2001 2002 2003 2004 2005 2006 *2007 **2008 Inflation Rate

9.8 2.5 -1.5 3.8 10.9 11.6 8 11.9 5.4

* expected statements, ** preliminary statements, Source: Statistics Bureau’s Statements. 5) Per Capita Rate of GDP : Statements indicate growth of Per Capita rate of General Domestic Product in fixed market prices for the year 2000 with a rate of (2%) in the year 2006, to reach ( 3.8%) in 2007, with the expectation that this rate will reach approx., ( 4.4%) in the year 2008.


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Table No. (9) Per Capita rate of General Domestic Product ( SP)

2005 2006 2007 2008 62729 63973 66374 69332

6) Unemployment rates: Statistics Bureau's statements concerning surveys of manpower during the period ( 2000-2008) indicate a considerable decrease in unemployment rates, beginning from ( 10.9 %) in 2003 to about (8%) in 2005 and had risen to (8.4%) in 2008.

Table No. (10) : Unemployment Rates During ( 2000-2007)

Years 2000 2001 2002 2003 2004 2005 2006 2007 Unemployment Rates 9.5 11.2 11.7 10.9 12.3 8 8.2 8.4

Source: Central Statistics Bureau 7) Trade Balance: Trade balance deviates to the benefit of exports of goods, in current prices during the years ( 2000-2008), where the value of exports: goods and services, increased to ( 243) milliard Syrian Pounds in 2001 to reach ( 579) milliard Syrian Pounds in the year 2007. The value of imports also increased from (220) milliard Syrian Pounds to reach (684) milliard during the same period, as specified in the following table:

Table No. (11) : Trade Balance During the Years ( 2000-2007) Million SP Years Exports Imports Surplus 2001 243179 220744 22435 2002 301552 235754 65799 2003 265039 236769 28271 2004 346037 389022 - 42840 2005 - 424300 502369 - 78069 2006 505012 531325 - 26312 2007 579034 684557 - 105523

Source: Central Statistics Bureau Figure (3) : Development of Syrian Trade Balance During (2001-

2007)

0

100000

200000

300000

400000

500000

600000

700000

2001 2002 2003 2004 2005 2006 2007

Exports Imports


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Table (12) : Detailed Trade Balance During (2002-2007)

period

Imports Exports Trade Balance Credit

Oil & Derivatives

Other commodities

Total Public Sector

Private Sector

Total Imports Oil&Derivatives Other

Commodities

Total Public Sector

Private Sector

Total Exports

2002 7614 59479 67093 168661 235754 209652 20752 230404 71148 301552 65799 2003 8928 46526 55454 181315 236769 189094 20941 210035 55004 265039 28271 2004 54340 54682 109022 280000 389022 168355 15682 184037 162000 346037 - 42840 2005 120699 48566 169265 333104 502369 191969 20961 212930 211370 424300 -78069 2006 143673 71190 214864 316461 521325 203477 22617 226094 278918 505012 -26312 2007 248489 458793 286210 398347 684557 219000 26567 245567 333467 579034 - 105523

Source: Central Statistics Bureau 8) Balance of Payments: The total balance of payment ( current account, capital and financial) in current prices, during the years ( 2000-2007) for recording a surplus in the balance of Payment in the year 2007 which reached ( 11207) Million Syrian Pounds, as specified in the following table:

Table No. (13) Balance of Payment During the Years ( 2000-2007) Million Syrian Pounds

Years Result of current account, capital and financial in current prices Debit Debtor Credit

2000 419327 383308 36019 2001 472765 442508 30257 2002 505178 479821 25357 2003 469070 437870 31200 2004 672290 645827 26463 2005 797767 761918 35849 2006 81060 826911 - 5851 2007* 965123 944916 11207

* Preliminary statements, Source: Central Statistics Bureau 9) Tax System in Syria: 1 Tax System in Syria goes back to the beginning of the twentieth century, where in the dawn of independence, the configuration of this system began to formulate, where numerous legislations were issued at that time, effecting the enforcement of Customs' taxes and charges and others. Other legislations were issued in the next decades, that added other new taxes and charges, or amended the old taxes and charges. In late 2003, a new stage of development and innovation of tax system began, where first Law No. /24/ Income Tax Law was issued, to substitute Law No. /85/ for the year 1949, and Law No. /25/ for the year 2003 ( Tax Evasion Law); then laws came one after another of which legislative decree No. /51/ for the year 2006, so that the number of these new legislations have become about /30/ new legislative texts, still valid up to date. a. Features of The New Syrian Tax System: The first wave of reform in the Syrian Tax System concentrated on: ý Abolishment of some old taxes and charges, that have become obsolete and unsuitable for

current circumstances, in addition to the fact that they have lost the core of their economic return, such as the taxes of livestock, machineries, the inheritance, gifts and endowments’ fees, along with alien fee, consular endorsement fee and others. Ministry of Finance could through investigation and collection mechanisms, make for the returns that were coming from those taxes and fees; moreover, it could increase them.

ý The old tax system was characterized by its high tax levels, e.g.: income tax reached (92%), then it decreased to (63%) then it was decreased to about (63%), and later on to (35%) on

1 Hussein, Minister of Finance, Issued on Internet on 7/10/2007 -Source: Comparative Study By Dr. MHD Al


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1/1/2004, and to (28%) on 1/1/2007). Those high tax rates were the main cause of tax evasion in Syria. Also charge rates had been decreased such as customs charges, where the highest customs charge was ( 255%), whereas now the highest rate is (60%). So the average customs tariff in Syria has become now ( 14.5%). Customs charges were decreased on raw materials and industry prerequisites to ( 1%) for raw materials, it could be increased to reach 5% only for half manufactured or wholly manufactured goods, the thing which formed a strong support to Syrian industry, and subscribed in increased direct investment in recent years.

ý The new legislations facilitated tax procedures, making it easier and more placid; they abolished the personal estimation of fiscal circles, and personal relationship; this was completely achieved in income tax on virtual profits. Also this was achieved with regard to the taxes of: salaries, wages, contracting, importation, real estate trading, and import & export activities.

ý On parallel level, the efforts of abolishing tax evasion were enhanced, with the issuance of law No. /25/ for 2003, which included preventive measures against those committing tax evasion; this Law could return important amounts of money to treasury.

b. Syrian Tax System Outcomes:

Table No. (14) Actual Outcome of Tax & Charges Sector, Including Customs During the Years ( 1990 – 2008 ) was as follows:

Year 1990 1996 2000 2002 2004 2005 2006 2007 2008

Actual Outcome milliard SP

49.277 130.31 170.87 221.58 238.24 251.50 296.62 264 308.5

It is noted that beginning from the year 2005, there were considerable increases in actual outcome , despite the decrease of rates and the abolishment of some taxes and charges, and in spite of the increase of Gross Domestic Product ( GDP) in current prices, especially in the two years of 2005, 2007, where the increase in 2007 reached ( 210) milliard Syrian Pounds, where GDP increased from / 1430.9/ milliard SP in 2005, to /1640.6/ milliard in 2007 2 , or in increase rate of ( 14.6%), whereas the increase in tax outcome for the year 2007 (47) milliard Syrian Pounds i.e., ( 18.7%) over 2005; Customs tax produce generally increased from /26.708/ milliard in 2005 (decree of Customs car-tax decrease No. /197/ on 6/5/2005 became effective on 1/6/2005) to /28.580/ milliard in 2007. i.e. the increase reached /2/ milliard Syrian Pounds per year. Comparison with Some World Tax Systems Produce: q Comparing Syrian Tax System with that of some other tax systems in the developed countries,

and Arab countries, with regard to tax outcome to Domestic Product, we find the following: Table No. (15)

State Tax Produce Rate to GDP Sweden 37.4%

Denmark 49.1% France 27.2%

Germany 22.3% Britain /UK/ 29.8%

European Union /EU/ 26.6% United States of America / USA/ 18.4%

Morocco 21.1% Tunisia 21.3% Jordan 19.6% Egypt 19.5% Syria 18.10%

2 Actual modern statistics from The Syrian Statistics Bureau


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There are indications that Syria intends to raise the tax outcome contribution rate in GDP to reach approx., /25%/ in coming years . q Income Tax Rates:

Table No. (16) State Tax Rate of Companies Tax Rate on Individuals

Sweden 28% 0 – 25% Denmark 28% 5.5 – 30% France 33.3% 0 – 48%

Germany 25% 0 – 42% USA3 15 – 35% 10 – 35%

Morocco 35% 0 – 42% Tunisia 35% 0 – 35% Jordan 15 – 35% 5 – 25% Egypt 20% 0 – 20% Syria 0 – 28% 0 – 28%

q Tax outcome& Share per capita of taxes :

Table No. (17)

State Tax Revenue (Є) milliard

Tax Individual Share (Є)

Sweden 107.71 11952.6 Denmark 102.12 18871 France 465.12 7439.7

Germany 501.08 6073.6 Britain 533.71 5861.3

EU 2877.32 5861.3 USA 1846.8 6230.5

Morocco 10.015 305.8 Tunisia 4.948 495 Jordan 2.004 352.9 Egypt 12.9 163.3 Syria 4.5 250

q Tax Revenue Distribution Structure:

Table No. (18) :

State Direct Tax Rate Indirect Tax Rate Other Taxes Total Sweden 39.3% 33.8% 26.9% 100%

Denmark 62.5% 35.6% 1.9% 100% France 27.1% 36% 36.9% 100%

Germany 26.6% 31.3% 42.1% 100% Britain 45.4% 35.8% 18.8% 100%

EU 31.1% 39.1 29.8% 100% USA4 58.06% 5.2% 36.74% 100%

Morocco 39.4% 43.6% 17% 100% Tunisia 36.4% 57.1% 6.5% 100% Jordan 16% 66.7% 17.3% 100% Egypt 49.4% 36.4% 14.2% 100% Syria 57.63% 18.92% 23.45% 100%

3 ٍinformation for produce of 2007 Source: Congress Budget Bureau / CBO/ 4 Statements of Year 2007, and other countries Year 2005


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These Indications Stress the fact that Syrian tax System conforms with that of other countries of the world, and tries to cope with international standards

c. Main Axes to Develop The Syrian Tax System: The tax system is the main source of Public treasury, and the main funding source of public expenditure. In addition to that it is depended upon it , to substitute the oil revenues, and the surplus of state-run economic establishments, where those two sources of income have witnessed a great deal of recession; out of the main axes to develop Syrian tax system, we state the following: 1. To continue preventing the tax evasion: where many covered items of taxation have been

discovered; from which the increase in tax revenues originated, despite the decrease of the rates of taxes and charges.

2. To generalize the principles of divisions for big tax payers, that adopt the principle of confidence and self-esteem, providing them with the best services, as they share in (70%) of the general tax revenues.

3. To continue tax-administration reform, and to establish an independent authority leading the tax administrations at the ministry of finance. The matter which will facilitate and provide the taxation activities with flexibility, where tax payers will be divided into big, medium and small tax-payers. This will provide the opportunity to concentrate on big and medium tax-payers.

4. To continue facilitating the procedures and placidness, putting an end to red-tape procedures. At the same time to continue training the staff of fiscal circles, in order to provide best services to citizens in easy ways.

5. To enter the tax on added value, beginning as from 2009, provided that all preparations are completed, including readiness of Syrian Economy for it before that date.

6. The ministry of finance, through its tools of fiscal policies, is saving no efforts, and will be always ready to use these policy tools to limit inflation and the rise of prices.

d. Tax Impetus provided according to investment decree Nr. /8/ for the year 2007: Legislative decree Nr. /8/ for the year 2007 stated that in order to encourage investment, the investment projects included are subject to dynamic tax deduction, according to the stipulations of Legislative decree Nr. /51/ for 2006 of income tax: • The Maximum project tax rate in its highest chunks ( 28%) on net profits. • As for Shareholding Companies that put their shares to public subscription with a rate not less

(50%), their tax rate is ( 14%). As for projects included in investment encouragement, their tax rate is (22%), and this rate will be decreased on the following bases:

• Two degrees for industrial enterprises in the governorates ( Raqqa, Deir Ezour, Hasaka, Idleb, Sweida, Daraa and Quneitra).

• One degree for industrial enterprises that employ /25/ workers or more, duly registered at Social Insurance Organization.

• Two degrees for industrial enterprises that employ /75/ workers or more, duly registered at Social Insurance Establishment.

• Three degrees for industrial enterprises that employ /150/ workers or more, duly registered at Social Insurance Organization.

• One degree for industrial enterprises in the industrial zones. • Two degrees for industrial projects duly licensed according to decree Nr. /8/ for the year 2007,

in the two industrial cities of Hysia, and Deir Ezour. • Two degrees in the light of the availability of the following bases:

- Industrial projects that depend on local raw materials. - Industrial projects that save power.


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- Industrial projects that use means, tools and machineries that preserve environment and prevent environmental pollution.

- Industrial projects that export ( 50%) of their production. • Two degrees for investment projects that are licensed according to decree Nr. /8/ for 2007, in the

eastern region, which contains: ( Raqa, Deir Ezour and Hasaka)5.

5 Endowed by The Cabinet in its session on 26/2/2008


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Chapter Two: Investment Climate

1. Improvement of Investment Climate in Syria: Syrian Government continued its efforts towards supporting and development of work environment, through continuation of working on structural reform programs, and development thereof, in order to cope with the successive modern developments and global economy, in addition to the efforts paid to issuing legislative acts and laws, making mutual regional and international arrangements, establishing new free zones, and new industrial zones, going developing the already existing ones; encouraging the private sector, to uphold its role in the comprehensive development plan, and to hasten “ The Transfer to Social Market Economy”. Reform as a transitional stage, necessitated the availability of incubating legislative and organizational environment, to find an investment climate, commensurate with it, and meets the aspirations of local, Arab and foreign investors. In recent years a wide band of legislations had been issued that activate economic tools, in the vanguard of it: to attract and stimulate capitals, through organizing and facilitating the execution of investment projects. The Tenth Five-Year Plan defined investment as a national objective, to be a motivating impetus, and a compass to the everlasting development plan, with all its tools, in order to raise the living standard of the Syrian Society. Therefore it availed encouraging procedures, stressing the role and performance of the private sector, in succeeding the development plans, depending on availability of the attractive climate factors. Great interest was given to the development of the Syrian investment climate, through development of organization, in the vanguard was Syrian Investment Agency / SIA /, and supporting productive sectors, making the work market more flexible, supporting small and medium projects, going on with the development of required and cost acceptable infrastructure, and helping the new economy by indulging in Information Technology and communication world ( IT ), making a change in investment culture, in order to support openness and to adopt change, and to support participation and transparency. It also continued implementing its programs to diminish unemployment rates… The Main Characteristics of Syrian Investment Climate:

The distinctive Geographical position as Cross-road between world continents. Stable and safe political environment along with notable national conformity Limited foreign debts, and fixed exchange rate against foreign currencies, for quite a long

period of years The available privileges, exemptions and facilities for investment projects Suitable infrastructure, with fully equipped industrial zones, that develop perpetually,

qualified human resources and cheap wages Availability of natural resources, and low production costs.

In this context, we have to stress the following factors:


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o Syria’s membership in both Arab and international trade and economic authorities establishments and organizations. • The Arab League / AL / • The Arab Free Trade Organization. • Council for Arab Economic Unity /CAEU/ • Arab Investment Insurance Organization • United Nations Organization for Industrial Development / UNIDO/ • United Nations Organization / UN/ • United Nations Development Program / UNDP/ • Islamic Conference Organization • Islamic Development Bank / IDB/ • World Bank / WB/ • International Monetary Fund / IMF/ • ESCWA Organization • Economic Cooperation & Development Organization OECD . • ANIMA The Euro Mediterranean Network of Investment Agencies. • In July 2002, Syria became a member of the International Organization for Investment

Insurance / MIGA/6 • Syria joined The International Center for Settlement of Investment Disputes /ICSID/, which

provides facilities to solve investment disputes, that may arise between foreign investors and hosting countries.

• Syria has applied for joining to World Trade Organization / WTO/

o Syria became ready for investment, more than in any other time ago, to set forth in the realm of both local and foreign direct investment, and to support the participation of private sector, stressing the importance of investment; thus, Syria started developing investment through developing its tools, by enhancing institutional organization, laying the basis for foreign investment, which surpasses impetus and industrial zones, to include availing facilities, and sufficient information, commercial banks that are able to compete . Along with dispute-settlement regulations, etc.. Carrying out promotion procedures for investments, facilitating coordination between various responsible authorities, through The Syrian Investment Agency / SIA/.

o Building a sound economic environment suitable for business, adopting policies that encourage investment. ( Forming a picture of Modern Syria, working on attracting the Investor and Sector…etc.).

o There’s a comprehensive wave of positive change, laying the basis for a wider surging, acquiring increasing support on all levels of economic sector, using Syria’s heritage and rich history, which asserts the leading talent of its Leadership and People as well.

o The government’s continuation of economic and social reform process, with the Syrian people taking part in decision taking with regard to economic affairs in the country.

2) Most prominent Economic &Political Developments Affecting Investment Climate:

Syria's chairmanship of Arab Summit for Solidarity, convened in Damascus in its 20th session. European openness to Syria, and perception of the importance of the role of Syria in the

region, and solving its problems . The profound and spectacular presence of HE The President of the republic in Intl., bodies,

6 ent of The International Agency for insurance of investment/ MIGA/ was established in 1988, it encourages investm

foreign countries in developing countries, insuring them against any loss other than trade losses, and confronting all risks and impediments that may hinder investment in these countries.


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such as: the conference of the heads of the Mediterranean countries, which called for Mediterranean Union Project .

To continue supporting Arab and Intl., relations, concluding numerous agreements . To continue developing diplomatic and political relations with Iraq. Signing with the initials on the renovated copy of the Euro-Syrian Partnership Agreement, as a

preliminary step towards the final signing of it . The convening of the eastern region for investment in Deir Ezour .

The following incidents had some unsuitable effects:

The international financial problem, which began to lay its weight in 2008, and is still working, with accompanying changes such as: the rise in oil prices along with the prices of other goods.

The political and security status in Iraq, on the light of national reconciliation and agreement . The Zionist siege of Gaza strip, which aims at feminizing the Palestinian people, to force it to

accept the humiliating agreements . The Climate change situation, which had negative effect on agricultural and livestock situation

in the country. Since the upholding of HE President Bashar Al-Assad his constitutional Position as President of The Republic in 2000, a group of changes took place, that reflected his determination to indulge Syria in world economy in gradual steps, but confident ones, towards economic reform and innovation, adopting the Social Market Economy, establishing liberalism, allowing for a greater role for non-governmental organizations. All this represented positive indications for investors and Financiers on the regional and international levels. Syria entertained a stable investment climate, regarding the total economic indications, with clear improvement of development rates, along with the achievement of reasonable trade balances, both domestically and externally, maintaining ample level of foreign hard currency. In addition to the stable financial position of the Syrian Pound, especially on the light of Intl., risks and economic freedom. The estimations of The Central Statistics Bureau indicate a real growth in the Gross Domestic Product / GDP /, estimated as (6.5%) in 2008. The Five-Year Plan (2006-2010) indicate the achievement of prospective objectives, where it concentrated on releasing numerous national programs, with a view of developing investment and export activities. Syria has begun wide steps on the track of economic liberalization, by joining “The Great Arab Free Trade Zone”, in addition to concluding numerous mutual agreements; the developments stated hereunder indicate the reform trends carried out by the government. q The Second National Industrial Conference 2008, reflected a trend of the government, where

industrialists of both private and governmental sectors were gathered, to discuss the obstacles faced by the industrial private sector. This meeting resulted in issuing a number of decisions that are still being issued successively. Also Syria hosted a number of conferences and economic activities, such as The Expatriates Conference, and national symposiums for other national sectors: Finance, real estate Investment, tourism, transport, communications and others.

q Syria announced the first national report for competition in economic field, in cooperation with UNDP; it is the report which defines the actual position of our Syrian economic elements. According to a map, this is useful to serve development process.

q The Economic reform program stressed on investment, and reform of economic sector. And reform of financial sector, emancipation of funds transfer operations, unifying exchange rate, opening private Islamic banks, private insurance companies, and releasing Damascus Securities Exchange, decreasing income tax. In addition to reform of Judicial System. And continuing encountering corruption. Decreasing bureaucracy and administrative impediments.


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The most important basis in any economic reform process which goes after freeing investment, is to provide the legislative framework, which is suitable for investment and trade, through reforming existing laws, and issuing new laws, finding the suitable establishments, that are required for the development of regulatory legislations and procedures; Syria witnessed a series of these procedures, we state herewith the most important of them:

q Unifying the exchange rate applied by The Syrian Arab Republic on imports, which were distributed on three prices, in addition to decreasing domestic interest rates twice in the year 2004, for the first time since 1981, and opening accounts in foreign currencies was allowed.

q And in 2004 a court of first instance was established (Chamber No. 2) in all governorates, to review the disputes relating to investment law; these courts were instructed to review disputes soon without any delay.

q Law No. 23 for 2000 was issued " Fund & Loan Council", in order to supervise over monetary and banking cases

q Law No. 28 for 2001 was issued, which opened the door before banking sector. q Law No. 29 for 2001 was issued regarding banking secrecy. q Abolishment of decree Nr. 33 for 2003 of Law No. 24 for the year 1986 and amendments

included in Law 6 for 2000, that are the two laws restricting dealing with foreign currencies, and were considered impediments on the way of foreign investment in Syria.

q Law No. /59/ for the year 2003, regarding money laundry, was issued; thus Money Laundry Authority was established.

q Legislative decree Nr. /60/ for 2004, regarding canceling Expatriation Fee, was issued. q Law Nr. /5/ for 2005, regarding approval of Syria's participation in countering funding

terrorism. q Legislative decree Nr. 35 for 2005 allowed the establishment of Islamic banks in Syria. q Act No. 43 for 2005, which opened insurance sector before private sector; previously as well,

the door was opened to private investment in health and higher education. q Law Nr. 25 for 2006 was issued including the 10th development plan, with its ambitious

objectives. q Decree Nr. 51 for 2006 was issued, including amendment of income-tax law No. 24 for 2003,

to decrease the income-tax rates to encouraging levels. q Decree Nr. 55 for 2006 including the establishment of Damascus Financial Market was issued. q Legislative decree Nr. 60 for 2007, including establishment of governmental monetary market,

was issued. q Legislative decree Nr. 61 for 2007, including allowing companies to re-estimate their fixed

assets and to integrate, was issued. q Act No. /8/ for 2007 regarding encouragement of investment was issued. q Law No. 9 for 2007, including establishment of The Syrian Investment Agency / SIA/, was

issued. q Law No. 9 for 2007, including endorsement of the Pact for establishment of The Syrian-Qatari

Investment Company was issued. q Law No. 32 for 2007 was issued, allowing Non-Syrian Investors owners of projects covered by

stipulations of Law No. /21/ for 1958 in industrial zones, to own and rent lands and real states that they require.

q Law No. 36 for 2007, for trade, which cancelled decree Nr. /149/ for the year 1949 and amendments, was issued.

q Law No. 41 for 2007, including establishment of a General Tax & Fees Agency, was issued. q Law No. /15/ for 2008, for Real Estate Development and Investment, was issued. q Law of companies was issued. q Joining the convention of The Hague concerning international registration of industrial

prototypes. q Law of protecting national product, from bad practices in Intl., trade practices. q Law of protecting Trade marks, Geographic Indicators, and Industrial Prototypes, was issued. q Law No. 15 for 2008, for real estate development and investment, was issued.


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In addition to a group of procedures and instructions, that came to prop a wide range of legislations that lay the foundation for a promising future. Reforms had been entered in the realm of freeing trade & encouragement of exports, the most important of which were: q Number of Mutual Trade Pacts were signed with (Turkey, Tunisia, Yemen, Egypt, Iran, China,

Jordan, and GCC countries… etc.) along with forming or activating the mutual higher committees with number of countries.

q It was planned to establish a special economic area ( Agropolis) in Al-Ghaab Plain, that perform investment, production and export of agricultural products, that have competitive privileges.

q Also efforts aiming at establishing programs to encourage exports, had been done, with the study of their sources of finance; also efforts had been done to support agricultural production, the thing which support exports.

3. Future Vision of Investment Climate:

The Tenth Five-Year Plan ( 2006-2010) stressed the following strategic objectives: • Encouraging foreign capital to enter the Syrian Market. • Facilitating investments' transfer into currency, spurring long term investment. • Increasing reasonable judgment and placidness of fiscal establishments, and pertinent

governmental circles. • Increasing the number of products and services. • To complete the establishment of Securities Exchange, providing the legislative and institutional

framework, to banknote the fiscal assets. • Providing consultancy profession and services and providing the legislative framework to

achieve flourishing of fiscal sector. • To amend Investment decree 8 and Labor Law. • Establishment of special courts for investment and Comm., disputes. • Marketing of foreign investments. The Tenth Five-Year Plan forms a source to draw the policy of SIA, and the future vision. The plan adopted a promising vision to achieve the following objectives: - Average growth rate of GDP (7%). - High sharing rate of participation of local and foreign private sector in GDP. - Creating about (1250) job opportunity annually. - Decreasing unemployment rate to (8%). - Decreasing rate of inhabitants under poverty level to (7.12%). - Increasing rate of foreign investment to (2.9%) of GDP. - Increasing the rate of private investment in total investment to (47%). The plan asserted the rise of productivity, and raising the productive capability, to increase the returns, and to get use of the achieved level, in order to support compatibility, and to supply services in a distinctive qualitative level. Therefore, a group of bases had been adopted in allocating resources, and distributing investments on the sectors, so that to achieve the prospective growth rate of the tenth five-year plan, such as: - Asserting the priority of investment in promising sectors, that may achieve quick returns,

resulting in wide range of benefits, along with encouraging the development of infrastructure to meet the requirements of the industry and productions of high rates of revenues.

- Asserting the role of transformation industries, in the continuous development process, providing work opportunities. Improving trade balance, and asserting the necessity to increase


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investment in the sectors of power, education, health, and in the field of scientific research and technological development.

- To make proper promotion to encourage the entry of private investment to the realm of communications, IT technology, tourism, transport, construction and building, power, transformation industry and agriculture, working on drawing new patterns of investment, through partnership with public sector, or with foreign capitals.

- Supply of more reforms suitable climates for attracting direct foreign investment, and to improve the work context of domestic private sector.

- Adopting decentralization and enforcement of economic and local administrative systems and smooth operation of all public entities in order to succeed the regional investment.

- Working on increasing national savings, through ensuring stability of economic regimes, and to achieve development of the money market and capitalism.

- Trying to increase production and productivity, through marketing to use suitable technologies of cheap cost, to develop small and medium installations. In order to increase its share in economic development.

4. Legislations Regulating Investment in Syria: there are numerous laws and regulations that govern the investment policy, licensing and investment encouraging awards in Syria, namely: 1. Law Nr. 47 for 1952 relating to small industries and handicrafts. 2. Decree Nr. 103 for 1952 regarding fiscal exemptions of industrial projects. 3. Law Nr. 21 for 1958. 4. Decree Nr. 10 for 1986 relating to investment in agricultural projects. 5. Regulation adopted by the Ministry of Oil and Mineral Resources in assigning investments to oil

company. 6. Decision of Supreme Investment Council Nr. 198 for 1985, regarding Tourism Investment. 7. Decision of Supreme Investment Council Nr. 198 for 1987, regarding Tourism Investment. 8. Law of Currency & Loans Council, to license private banks. 9. Decisions regulating licensing of transport projects.

10. Legislative decree Nr. /36/ for 2001, regarding licensing of private Universities. 11. Decisions of the Ministry of Education to license private schools. 12. Law of Free Zones Organization regarding investment in the free zones. 13. Decree Nr. /8/ for 2007 for encouraging investment. 14. Law Nr. /15/ for 2008 for Real Estate Development and Investment.

5) Institutional Structure: Syrian Investment Agency had been established as per decree Nr. /9/ for 2007, which formed the basis for investment in Syria. Thus the transformation of the Investment Bureau to The Syrian Investment Agency, having its own administrative and financial affairs, encouraged investment too much. The decree of SIA’s staff was issued, which included /100/ posts of various titles. And in 2008 the internal regulation was issued for its new organizational structure on light of its assigned missions. Also, the decree of establishing the cooperative fund, for SIA’s staff, and the issue of encouraging impetus. The Syrian Investment Agency/ SIA/ went on putting its own house in order, in a way serving investment projects, adopting the policy of open door, it’s still working on filling all posts, and increasing the number of its working staff, opening branches in the governorates. SIA has a horizontal official structure, headed by the Board of Directors and the General Manager, its structure is divided into seven Directorates: o General Manger Directorate o Legal Affairs Directorate o Follow-up & Technical Affairs Directorate o Investors Services ( one-stop-shop) Directorate o Promotion Directorate


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o Studies, planning and Information Technology Directorate o Administrative Affairs Directorate . SIA began getting use of the support of some of other authorities and organizations in training and qualifying of its staff and personnel, in the field of investment affairs, organizing common events and occasions, transmitting practical experience with them and getting use of it. The Agency witnessed a number of procedures that may develop its role and occupations, towards eliminating hindrances on the way of investment, such as: • Issuance of decree Nr. /29/ for 2008, including naming Mr. Abdullah Al-Dardari, Deputy

Premier For Economic Affairs, Head of SIA. • Issuance of decree Nr. /339/ for 2007, including naming Mr. Ahmed Abdul Aziz, as General

Manager of SIA. • Issuance of Premier’s Decision Nr. /458/ on 28/1/2008 including the reformation of The Board

of SIA. • Issuance of Premier’s Decision Nr. /827/ on 12/2/2008 including establishment of branches for

the Agency in the governorates, to perform the professions of SIA, excluding the projects covered by the Legislative decree Nr. /8/ for the year 2007 from presenting it before the committee of Notification No. /10/ for the year 2004.

• Issuance of the decision of the Supreme Council for Investment No. /5055/ on 12/11/2008 including the one-stop-shop operation mechanism.

• Opening of the one-stop-shop service, which serves all investors, and represents government ministries and entities, interested in investment, through empowered staff, that may complete all procedures, offering all required licenses.

• Releasing the first investment map in Syria, which prepare the information, statements and legislations that are of interest to investors, specifying a number of available investment opportunities.

• Acceptance of all applications submitted to the Agency for inclusion of projects, and canceling the lists of projects that don’t deserve the privileges and exemptions of Investment decree 8.

• Law for inclusion of projects and amendments was issued directly from the one-stop-shop, without the need to submit them to government ministries or SIA’s Board.

• Preparation of promotion plan for the year 2009, and allocating required expenditure for it. • Accomplishment of the Internal Regulation and Structural Diagram of SIA. • Issuance of Staff Regulation of SIA. • Empowerment of industrial zones in ( Adra, Hisya, Sheikh Najjar, and Deir Ezour) to issue all

inclusion decisions and amendments, and follow up of procedures. • Issuance of HE Premier’s Circular to indulge SIA in all activities, held by the ministries and

other authorities in the field of investment. • Issuance of HE Premier’s Circular to consider SIA the competent authority for organizing

meetings and symposiums for investments, and marketing, except Tourist. • Issuance of the annual investment report for the year 2007. 6) Support Project of Investment Environment: The main executed activities regarding the support of investment environment, which is being carried out in collaboration with SIA, State Planning Commission and UNDP, which began in the beginning of summer of 2006, and had carried out the following activities: q Organizing training courses to build the capacities of SIA’s staff in all fields ( language, IT, and

administrative skills). q Building the infrastructure of IT, and activating a comprehensive information network, and

supply of PCs for the Syrian Investment Agency


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q To build up information management system, including a new database ( Statistics &Archive Program) for investment projects and relating information, to prop decision maker, provide required statistics, and atomization of work mechanism at SIA ( 80%) has been accomplished.

q Innovation of SIA’s electronic site, placing all tools of administration and development of the same, with included information, in a simple practical way; carrying out training of members of staff, for this purpose, in order to continue information innovation of the site.

q Issuance of the investment chart, including the available investment opportunities, according to sector and province. An electronic site has been allocated, to make information available through internet, connecting it to the electronic site of SIA.

q Building an electronic library containing more than 200 documents, including both local and international reports and studies in the following fields: economy, law, statistics, in addition to the documents of the tenth five-year plan, with a view to avail the references and information, that help SIA’s staff in preparing their reports and studies, efforts will continue to be made to enrich this library.

q Participation in a training course in legal and legislative affairs for /5/ weeks, relating to investment, and the aspired objectives of attracting private investment, in collaboration with The Arab Planning Institute in Kuwait.

q Presentation of an institutional structure study for SIA, according to Intl., standards, as presented by MIGA agency of the International Monetary Fund / IMF/.

q Participation in preparation of the promotional identity of SIA. q Participation in a workshop for improvement of foreign direct investment reports. q Providing support to infrastructure of SIA, equipping the one-stop-shop, and the staff bureaus,

in a way conforming to Intl., standards. q Providing support to qualify electricity network, communication Dept., telephone and internet

of SIA staff. 7) Investment Promotion: The Government paid a special interest to and supported the Investment promotion plan, and opportunities; so that the previous year witnessed a clear improvement in marketing activities, reflected by an established desire to provide business climate, suitable for investment, so that Damascus became the pivot in attracting meetings and conferences, exhibitions, forums, symposiums and workshops…etc., following are the most important promotion activities, that SIA participated in, in the year 2008:

Table No. (19): Activity Number of Participants Place

To learn about the Egyptian Experience 3-5/2/2008 2 Cairo Conference of industrial sector’s role in development projects 18-20/2/2008

1 Kuwait

Investment support forum 4-6/3/2008 1 Japan Investment support committee meeting in Arab countries 5-7/3/2008 1 Cairo Conference of Financial Markets & banks 7-8/3/2008 4 Damascus Syrian – Turkish Forum 11-13/4/2008 2 Damascus Meeting of Higher preparation Syrian-Tunisian Committee 15-20/5/2008

1 Tunisia

Intl., Meeting for Leather industries 25/5/2008 1 Damascus Meeting for Investment in Free Zones 28-29/5/2008 2 Jordan Third Arab-Turkish Economic Meeting 11-13/6/2008 1 Turkey Meeting of Spanish Businessmen 6-9/7/2008 1 Spain Italian economic meeting 13-17/10/2008 1 Italy Reviewing Egyptian Experience in Free Zones & Investment 12-16/9/2008

2 Cairo


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Course of the acquainting program of investment promotion agencies staff 19-25/10/2008

1 Malaysia

Meeting with the Dutch part 21-24/10/2008 1 Holland Meetings for establishing a joint holding Company 11-17/2008 1 UAE Meeting for Execution of Memorandum of Understanding signed between the two countries 11-15/12/2008

3 Cyprus

Cairo Investment Meeting 20-25/12/2008 4 Cairo Workshop on BOT 1 Kuwait Training course on FDI reporting 28 SIA Meeting for investment In eastern region2-3/3/2008 6 Deir Ezzor Meeting for investment In Damascus countryside 18/8/2008 1 Damascus

Suburb Staff Training Course for investment & Legislations In eastern region2-1/5/2008

5 SIA

Workshop on investment laws 29/5/2008 1 Deir Ezzor Syrian – Yemeni Investment Forum 17-18/11/2008 22 SIA Syrian – Yemeni Investment Committee Meeting 26/7/2008 4 SIA 2nd. Industrial Conference 4-18/4/2008 4 Damascus 6th., Financial Establishments’ Meeting 17-18/11/2008 3 Damascus Meeting for preparation and signing of Memorandum of Understanding with the Islamic Development Bank 16/11/2008

7 Damascus

Workshop on Immigration 27-28/10/2008 2 Damascus Training Course in Public Relations 9-30/9/2008 10 Damascus Total of Participants 123

Syria walks with steady steps on the way of all kinds of investment. World Economic Forum’s report of competition stated that Syria occupies prominent positions on the international level among /128/ countries, according to strength indicator points, mainly: q Position (20) in stability and security indicator point, which is of the most attractive factors of

foreign investments. q Position (45) in basic health and education indicator point. q Position (43) in availability Engineers & Scientists indicator point. q Position (22) in real effective expenditure indicator point. q Position (73) in Public Debt to National GDP indicator point. q Position (24) in Credit & Debit Interest indicator point. q Position (39) in Private Sector’s woman employment indicator point. q Position (21) in Global Distribution in World Markets’ indicator point. SIA has put its promotion plan for 2009, getting use of the program of UNDP through the project of supporting investment environment. The plan also heads towards getting use of other specialized programs and tools supplied by the Euro-Mediterranean Agencies operating in the field of supporting investments. Such as (ANIMA), the International Agency for Investment Insurance; (MIGA) the United Nations Economic & Social Affairs committee for western Asia (ESQWA; and the Organization for Economic Cooperation (OECD) and the Arab Organization for Investment Insurance, and the Arab Planning Institute in Kuwait; and the Islamic Corporation for the Insurance and Export Credit. ( ICIEC) member of Islamic Development Bank. SIA had also carried out numerous workshops. The most important of which those dealt with the new investment legislations; collection and use of direct foreign investment usage. In cooperation with all our embassies in all over the world, through the Ministry of Foreign Affairs. The new investment laws were distributed, in addition to CDs, the Agency also had prepared the first copy of Investor Guide, which will be issued in two languages; moreover, zero issue of its magazine will be issued. We also develop the news papers and magazines distributed to Arab and foreign embassies in Syria, in addition to our embassies abroad, and Arab and foreign businessmen.


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It also developed SIA’s electronic site, in addition to connecting internet service, which is now available for all SIA’s staff. In addition to Syria’s position on Arab investment map, which include about (4000) investment opportunities, classified according to sectors, and include /15/ Arab states and about /20/ Arab authorities. This map has been issued on internet under site : ( www.arabinvestmap.com), this site comprised numerous information that are useful for investors, such as Arab pacts in the field of investment, and the country’s economics, along with investment laws and other statements. SIA saves no efforts to establish the strongest ties and mutual cooperation with various similar Arab and Intl., entities, with a view to communicate information and expertise, and to pay more interest in upgrading the promotion and marketing operations, regarding method, organization, and management along with financial and human resources. SIA has signed numerous pacts and memos of understanding with identical entities in other countries, to deepen cooperation (a list of agreements attached with this report). It is worth mentioning, that local public and private Media cooperation which was spectacular in coping with investment climate in Syria. Upon occurrence of the global financial crisis, SIA hastened to adopt a dynamic and professional methodology, applied on all investment-encouraging activities ( building an image for the country, seeking investors, serving them and conducting promotion & marketing for investment policies), keeping always in mind that investors have become more selective, in choosing the site and in obtaining the exact information. This what has been done all the time, through competitive conduct in display of (promotional product characteristics, after care of investors, the desired image and reputation, innovation and conformity); in addition to rapid response to speedy changes (in coping with the changes, and applying of new procedures), and decreasing costs of implementing the works, the thing which increases the economic added value and the growth of the market. Also through the proper use of communication and information technology, in order to get full use of electronic promotion and marketing. SIA began conducting series of mutual activities, where two forums executed already about investment challenges in Syria, the other components & challenges of agricultural and irrigation sector. In addition preparations are being made for more meetings and activities, after the agency concluded the opening of the one-stop-shop, and releasing of the investment chart, the first of its kind in Syria, building its own electronic site on the web.

www.syriainvestmentmap.org

http://www.syriainvestmentmap.org/


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Chapter Three:

Investments under Investment Law No. /10/ for 1991 & Investment Encouraging decree Nr. /8/ for 2007

Syrian Investment Agency SIA/, had been established under Legislative decree Nr. /9/ for the year 2007, synchronizing with the issue of Investment Encouraging decree Nr. /8/ for the year 2007, which replaced Investment decree Nr.10 for the year 1991, and amendments. SIA upheld new tasks and powers, conforming to the economic developments witnessed by the country. The analysis of the investment projects shows clearly, the investment opportunities in Syria, are still wide, and can provide a good rate of returns. The Supreme Council for Investment concluded four sessions in 2008, after it assigned the Board of SIA, to discuss and issue approvals on inclusion and amendment of investment projects. Thus, the tasks of the Supreme Council for Investment became, according to decree Nr. /9/ for 2007, enforcing the establishment of SIA, allocated to the following: 1. To draw strategies and general policies of investment in Syria. 2. Study of laws and regulations relating to investment. 3. Adopting the investment map for Syria. 4. Study of reports pertaining to included investment projects, and appraisal of the results of SIA’s

performance. 5. Issuing the regulations relating to the operation of SIA, according to a suggestion of the Board. 6. Discussing the subjects, submitted to it by the Board, and adopting suitable decisions towards

them. SIA’s Board (19) has concluded a session during 2008, where it approved of including /219/ projects from all economic sectors. Industrial projects have had a plenty of share from it, where it reached Nos. 128 projects; and the agricultural 29 projects. And the transport projects of all kinds (59) projects, in addition to three projects for different statue. On the other hand the total value of these projects ( 537.4) milliard some in foreign currency 471.2 milliard Syrian pounds increased in what reforms these projects have slept quite along. 33.4 % achieving the total investment costs rate of all included projects, since the issue of the Investment Law in 1991. The values of the imported equipment machineries and facilities, for the same period of the year, reaching ( 454.5) milliard Syrian Pounds. To form in its rate, about ( 44.2%) of the total value of the imported machineries, during the whole years of ( 1991-2008). As for the direct job opportunities that are expected to be supplied by these projects, they reached in 2008 ( 23.235) direct work opportunity.


30

Table No. (20): the investment projects, included in the stipulations of law No. /10/ for the year 1991, and the legislative decree Nr. 8 for 2007; according to the years and economic

activities, and the values of the imported machines and number of workers within 1991 and 2008.

years

Nos. of Included Projects, According to Economic Activity

total

Investment Costs SP milliard

Value of Imp.,

Machinery &

Equipment SP

milliard

Nos., of Employment

Opportunities Industry Agriculture Transport others Invest. Costs

Some by Foreign

Currency

1991-1995 225 8 252 3 448 67.6 49.7 33.5 33913 1996-2000 163 3 186 5 357 55.4 44.4 26.6 16657

2001 111 6 221 1 339 27 21.7 13.4 9568 2002 84 4 309 1 398 43.7 25.7 20.7 11422 2003 81 15 123 2 221 24.2 18.5 12.3 8282 2004 112 12 176 1 301 87 63 44 16795 2005 111 17 104 8 240 179.5 132.3 86.2 29578 2006 342 62 280 7 691 441.2 327.2 231.9 44296 2007 110 20 50 3 183 144.8 127 104.7 13915 2008 128 29 59 3 219 537.4 471.2 454.5 23235 Total 1467 176 1760 34 3437 1607.8 1280.8 1027.8 207661 Rate

2008% 8.7 16.4 3.3 8.8 6.3 33.4 36.7 44.2 11.1

Source: SIA’s database

Figure (4) Development of Nos. of Projects, Included In Investment Law No. /10/ for the Year 1991 &decreeNo./8/ for 2007, according to

Sector and Years

0100

200

300

400

500

600

700

1991-1995

1996-2000

2001 2002 2003 2004 2005 2006 2007 2008

Industry AgricultureeTransport Others

Figure (4)Development of Projects Licensed as per Law 10 of 1991 and Decree 8 of 2007 according to Sector and years

q It is worth mentioning that in 2006 numerous high-cost projects were included in Investment

Law, such as cement factory and oil refinery…etc., which contributed to increasing the share of that year of total investment costs. These are quite big economic and rare projects in countries of similar economies.

q The issuance of the Legislative decree Nr. /51/ for the year 2006 for income tax, which subjected investment projects directly to dynamic deduction of taxes during the life time of the project. And cancelled the tax exemption period of (5-7 Yrs.) previously applied. The thing which made some investors include their projects as a precautionary measure to try to get use of the transitional period, between the date thedecreeNo./51/ was issued and the date of its expiry on ( 1/1/2007); so that projects will benefit from being included in Investment decree Nr. /10/ in the tax exemption period and after they will of course benefit of the decree Nr. /51/, so that its


31

benefit will be higher that others. This increased the number of included projects, which led to the rise of numbers and bulk of investment projects included in the year 2006, with their investment costs reaching SP /470/ milliard.

Figure(5)D istribution of Investment Costs for Projects Licensed as per

Law 10 of 1991 and Decree 8 of 2007

2765 Health and

Medical

316565Oil and

Power7582 Transport

5919Agriculture

204612 Industry

Table No. (21): Investment Projects Included in Investment Law, According to the Economic

Activity, and Investment Costs, and the Value of Imported Machineries, and Number of Personnel During the Year 2008.

Sector

Projects Investment Costs Some of them by Foreign

Currency SP

Millions

Value of Machinery

SP Millions

Work Opportunities

Nos. % SP Millions % Number

( Labor) %

Industry 124 56.6 204611.9 38 142843.9 127336.3 15784 68 Agriculture 29 13.30 5919 1.1 3937.5 3597.6 1593 6.85 Transport 59 27 7582.3 1.4 6107.9 6102.1 3181 13.6 Oil And

Resources, Power

3 1.3 316565 58.9 316435.1 315609.9 2138 9.2

Health And Medical 4 1.8 2764.5 0.51 1920.2 1870 539 2.3

Total 219 100% 537442.7 100% 471245.5 454515.9 23235 100% Source: SIA’s Database


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Table No. (22): Executed & Under-Execution Projects, in Accordance with Investment Law

No. /10/ for the Year 1991, and Investment decree 8 No. /8/ for 2007, Including Industrial Zones According to Kind of Project During the Period ( 1991-2008).

years Included Projects

Executed or Under Execution Projects Total Number

Execution Rate % Industrial Transport Agricultural Others

1991-2000 845 259 384 7 3 653 77.2 2001 339 54 66 0 1 121 35.6 2002 398 77 203 1 2 283 71.1 2003 221 78 194 5 1 278 125.7 2004 301 100 254 9 0 363 120.5 2005 240 84 122 6 0 212 88.3 2006 691 105 78 13 1 197 28.5 2007 183 87 57 19 0 163 89 2008 219 34 25 1 0 60 27 Total 3437 878 1383 61 8 2330 67.8 Remark: Some Years’ Rates Denote an Increase of 100% , because except the meant year, their inclusion has been done in previous years, bearing in mind that the execution period of some projects may take more than three years.

Figure ( 6): Executed Projects’ Rate to Included Projects according to Years

-800-600-400-20002004006008001000

1991-2000

2001

2002

2003

2004

2005

2006

2007

2008

Licensed Implemented

Figure (6)Percentage of Implemenmted Projects to Licensed Projects as per Years

Source: SIA’s Database

Investment Costs of Projects Included in ( 1991-2008) reached SP 1607.9 milliard. q Transport Sector comes in the first among projects included during (1991-2008) ( 1760 )

projects, while industrial projects come second in rank ( 1467) projects. q About 99.5% of these projects are owned by private sector, while the common sector forms less

than 0.5%.


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Table No. (23) : Number of included, executed and under execution, with their costs, number of workers, according to the stipulations of encouraging Investment including industrial cities,

according the bulk of investment costs during ( 1991-2008), Unit SP milliard.

years

Inclusion execution

Nos. Included Projects Invest. Costs Job

opportunities

Nos. of Executed &

Under Execution

Invest., Costs Job opportunities

1991-2000 845 123 50570 653 92.9 38897 2001 339 27 9568 121 11.6 4193 2002 398 43.7 11422 283 17 7380 2003 221 24.2 8282 278 18.5 7269 2004 301 87 16795 363 41.9 13470 2005 240 179.5 29578 212 43.1 8397 2006 691 441.2 44296 197 41.2 10191 2007 183 144.8 13915 163 56.5 9340 2008 219 537.4 23235 60 45.3 6330 total 3437 1607.8 207661 2330 368 105467


Table No. (24): Investment costs of executed projects, according to the stipulations of Investment decree 8, including industrial cities, according to the volume of investment costs

for the year 2008. Unit SP Million

Activity Agricultural Projects

Industrial Projects

Transport Projects Ind., Zones total

Investment Costs

268486 36162254 8575006 300000 45305746

Source: SIA’s Database q Reasons of Canceling Inclusion Decisions:

Executive instructions of Investment decree 8 No. /10/ for the year 1991 stipulated ( to abolish the inclusion decision if the owner of the project doesn’t take proper action to execute the project, within one year from advising him of the license decision), unless he presents justification of the delay, and to be acceptable by the council, to extend the execution period..) Then what are abolished are the inclusion decision and not the projects, as believed by some people. Through the follow-up process of the un-executed projects, the agency, found that the reasons behind the non-execution of the projects and abolishing them later on, could be defined as follows:

1) Easy obtaining of the inclusion decision of any project, also abolishing of this decision, will not cause the investor any financial costs or procedural actions.

2) For the Investor’s being unable to finance his project, and his failure to obtain loans from the banks for many reasons, the most important of them is his being unable to present the required guarantees to the Licensed Banks.

3) Investor’s lacking of studying the project, seriously and in a actual way, from economic, tech., marketing points of view, the thing which exposes him to unexpected obstacles, that could never occur to his mind.

4) Disputes taking place among partners, when they embark on execution of project, such as those of shares distribution, and legal form of the company, administration and financing method.. etc.,

5) Some people’s ( Investors) attempts to obtain the inclusion decisions of investment projects, in order to exploit them, and to try to find partners, bearing in mind that SIA put and end to


34

exploitation in inclusion decisions, in legal ways, and to offer consultancy to investors when they do any incident of assignment or participation, accomplished according to the law and regulations.

6) Non-Study of the proposed project’s site, regarding the suitability of the land, to establish such a kind of projects. So there are objective reasons preventing the approval of competent authorities to give regular approvals of these projects, such as cement, or phosphate factories, that aren’t allowed to be built on agricultural land or near protected habitats, lakes, housing areas, or tourist sites .. etc.. for there are environmental conditions, and circumstances required by the project, such as supply of water & electricity ….etc., others

First : Industrials Sector: a. Included Industrial Investments: The industrial sector plays an important role in the process of economic Reform in Syria, and this sector enjoys a special governmental interest, and its effect increases due to its importance among other sectors, where the tenth development plan focused on it, and the new legislations gave it, due importance since it is the strongest wheel in pushing forward the development plan. Also this sector has maintained its logical growth rate. The occurring development of the increase of number of included industrial projects, conforms positively with the increase of investment costs. And the provision of more work opportunities, was accompanied by development in the type of investments, bulk thereof, and its geographic distribution. New and quite important projects are still entering Syria, such as power generation stations, cement, cars, TVs., in addition to various projects of oil, health and other services.

Table No. (25): Industrial Projects Included in the decree of Investment according to years

and the Bulk of investment costs and work opportunities during the period ( 1991-2008) ( costs in SP milliard)

Years Nos. Projects Investment Costs Work Opportunities 1991 – 2000 388 93.75 28811

2001 111 21.08 6201 2002 84 36.27 7553 2003 81 19.07 6172 2004 112 76.8 11927 2005 111 82.28 12749 2006 342 297.15 31349 2007 110 48.39 10545 2008 128 207.37 16323 Total 1467 882.2 131630

Source: SIA’s Database The development of this sector increased gradually since the beginning of the new Millennium, and its growth strokes increased during the last two years. So that the number of included projects during the period ( 1991-2008) about ( 1467) projects ( except the legally abolished ones) of which (128) projects, included in 2008, achieving the rate of 8.7%, of total industrial projects, included during the period ( 1991-2008). Table No. (26): Specifying the development of industrial projects, included according to kind

of project, during the period ( 1991-2008). Industrial Activity According to Years Eng. Foodstuff Chemical Textile total

1991-1995 63 74 56 32 225 1996-2000 49 46 28 40 163

2001 43 12 21 35 111


35

2002 28 13 18 25 84 2003 32 16 15 18 81 2004 37 20 15 40 112 2005 29 30 20 32 111 2006 78 146 52 66 342 2007 18 52 26 14 110 2008 57 39 21 11 128 Total 343 448 272 313 1467

Distribution by Rate % 29.5 30.5 18.5 21.5 100% Source: SIA’s Database Foodstuff, drying and packing projects pioneered the list of industrial projects, included in Investment decree 8, where the number of which reached ( 448) projects i.e., ( 30.5%) of the total industrial projects, during the period ( 1991-2008). It included of them (39) projects in 2008 only. The technological development which happened in food industries is pacing forward quickly. Within international competition and diversification in food industries, of both botanic and livestock origin. This led to the development of production methods, and application of packing, sorting out, and quality control and assurance, the increase of packing projects, drying and manufacturing of foodstuff is owed to governmental encouragement of this activity, due to its importance in serving agricultural sector, which is considered the basis of the stability of Syrian market .To provide the prerequisites of this sector for its industries, and services: sorting, packing, that are necessary for both local and foreign markets. Also this activity, is considered complementary to agricultural activities, where it provides the services of drying, and manufacturing of agricultural products: such as vegetables, fruits and citrus, along with animal products like meat, milk and yogurt, so that it prolongs its expiry date, and transforms them into manufactured products, meeting the market demand, both locally and abroad. Providing the farmers with opportunities to sell their products, and to make them avoid stagnation problems and product’s accumulation in harvest time. Moreover, these are industries of big demand in the Syrian economy, to provide for its food security, and to increase its exports. This industry is characterized by its low investment costs, and high circulation of its capital circulation, and high returns, its easy administration, in addition to its providing of more job opportunities more than other industries. engineering industries projects come second in the number list, where its number had been ( 343) projects; then comes the yarn & textile, fabrics and clothes industry, where they had been ( 313) industrial projects, including the projects that were included in the three industrial cities. This is construed by the characteristics of this industry, in Syria, where it enjoys tradition and expertise. Since there is the raw materials for its success: cotton, textile, silk and also professional expertise, entertained by the personnel working in this field of activities, in addition to the new markets, that were opened before it, due to the numerous pacts and agreements signed by Syria, with various world countries. Especially the European Countries, to exempt the textile, from customs and lifting quantity constraints from them. The thing which formed a good activity, which formed impetus for investors in this lucrative industrial activity, and pushed the international companies to be directed to them, such as ( Beneton; Nafnaf, Adidas, Kenzi , Lord, Best Mountain & MG..) and others, of Intl., Fashion Industries, to give their trade marks to Syrian Products, the thing which indicate the strong confidence given by these international companies to the Syrian manufacturer and his ability to deal with the best world standards and marks, along with successful marketing of them. Then comes from the number point of view the chemical industries, paints and detergents. As they reached ( 272) projects, achieving a rate of ( 18.5%). Big number of investors continued to enter industries, that used to be allocated to the public sector, such as power projects, cables, televisions, reinforcement bars, metal plates, galvanization, cement… and others. The thing which supported these sectors and supported with it the policy of multiplicity, in industrial sector. All this found the basis for a big resourceful goods prepared for export, affecting our economy in general, and in the diversification of the type of our imports and exports, developing our industrial sector, and to


36

transfer new technologies into Syria. All this also offered to Syria the chance to supply new job opportunities, and to develop its administrative and know how experience. B. Executed Industrial Investments: Features of industrial success came over in the last two years, where statements showed a rise in the execution rates of the industrial projects, especially, where it reached in this current year to (69.2%), of which some are considered distinguished ones; HE President of the Republic, had inaugurated in the year 2007, the factory of the Syrian – Iranian Factory to manufacture SIAMCO cars in Adra Industrial City. And in January of the same year HE opened the Syrian-Iranian Factory of Cars (SABA) in Homs, with a productive capacity reaching (15000) car/ per year, in its first stage. And Hama new Cement factory whose production capacity reaches (1.100.000) tons annually, with a total cost of (250.000.000) American Dollars. Then works began in the project to produce sugar, with (1.000.000) tons annually, and in a factory for producing reinforced iron bars with an annual capacity of (0.5) Million tons annually, providing 40% of the requirement of the country; in addition to the glass plates in Aleppo… etc., As for execution of industrial projects, the executed or those that completed execution procedures (Industrial License, Partial Industrial Reg., Final Industrial Reg), projects have reached (878) industrial projects, including the projects of the industrial cities, realizing a rate of (59.8%) of the total projects included in the period (1991-2008), reaching the number of (1467) industrial projects.

Table No. (27) : Follow up of Executed Industrial Projects, or the Under-Execution Ones, Including Industrial Cities for the period ( 1991-2008)

Years Nos.

Included Projects

Executed or Under-execution Total Execution

Rate % Industrial License

Partial Register

Final Register

1991-2000 388 9 39 211 259 66.7 2001 111 7 20 27 54 48.6 2002 84 9 16 52 77 91.6 2003 81 14 23 41 78 96.2 2004 112 36 26 38 100 89 2005 111 36 21 27 84 75.6 2006 342 54 34 17 105 30.7 2007 110 52 24 9 87 79 2008 128 12 14 7 34 26.5 Total 1467 229 217 429 878 59.8

Source: SIA’s Database. It is worth mentioning to say that the Investment Law No. /10/ for 1991, and amendments, and the Investment Encouraging decree Nr. /8/ for the year 2007, had given included projects ( except transport projects) a period of 3 Yrs., as establishing period, i.e those projects, that were included in 2005, their actual execution could be observed practically after the elapse of (3) Yrs., from the date of its inclusion.


37

C. Other Industrial Investments: Table No. (28) of the Industrial Enterprises Executed according to the Law No. /21/ for the

year 1958, for the years ( 2000-2008 SP million) Unit of Capital SP Million

Activity Statement 2000 2001 2002 2003 2004 2005 2006 2007 2008

Eng., Industries

No..of enterprises

102 100 119 123 127 140 117 172 139

Capital 749 726 929 502 599 951 3192 3735 12168 Employees 603 614 935 760 727 792 1455 1838 1285

Chemical Industries

No..of enterprises 149 159 162 175 207 247 246 166 174

Capital 1785 2082 1324 1463 2761 2496 5235 6053.9 3318.5 Employees 621 1363 1201 1119 1835 1604 2504 1974 1632

Foodstuff Industries

No..of enterprises

122 145 206 210 328 380 333 278 317


Textile Industries

No.of enterprises

217 196 227 187 244 227 240 134 156


General Total

No..of enterprises 590 600 714 695 906 994 936 750 786

Capital 4313 4854 4053 4439 7160 7544 16173 13630.8 20574 Employees 2803 4414 4244 4173 6220 5893 7799 7137 5988

Source: Statements of Ministry of Industry /MOI/ for 2008

Table No. (29): The Handicraft Professional Enterprises Executed during the Period ( 2000-2008):

Industrial Activity No. Enterprises Capital ( SP Million) Employees Engineering 6001 2886.1 12126

Chemical 991 1133.5 2574 Foodstuff 2158 2268.9 4811

Textile 1232 603.1 3520 Total 10382 6891.6 23031

Source: Statements of Ministry of Industry /MOI/ for 2007

Law 2147 craft

Investment Law

Figure (7)Volume of Projects Investment Costs as per their Related

Laws

Figure(8)Distribution of Projects asا

per to their Related Laws

47 crafts

Law21

Investment Law


38

Second : Industrial Cities: The Industrial cities are going in quick paces towards the achievement of their objectives, that they were established for, and achieved big changes in coping with time schedules in the two field of execution and investment. These cities shared in attracting local, Arab and foreign investments, remarkably. The first stages were finished in all three industrial cities ( Adra, Hisa, Al-Sheigh Najjar) and the second stage began in (Hisia & Adra). The third stage in Sheikh Najjar, returns of the three cities reached ( 13.15) SP milliard, through allocation of land, and the investors’ building of the enterprises.

Table No. (30) : Specifying the Development of Investment Indicators In The Industrial Cities.

Indicator Unit Sheikh Najjar Adra Hisia Total No. of Factories Factory 1321 1477 350 3148 Bulk of Total Investments SP

milliard 72 93 30 195

No. of Employees working in the building & Operation of Factories Employee 26000 24060 11529 61589

Present support from government to Execute Infrastructure

SP milliard 2.167 1.750 1.490 5.407

Accumulated Actual Expenditure for Infrastructure

SP milliard 7.438 5.834 2.745 16.017

Net Accumulated Investment Returns

SP milliard 5.780 5.818 1.556 13.154

Total of duties for Engineering Syndicate

SP milliard

1.575 1.139 0.159 2.873

The Industrial City of Deir Ezour was established under decree Nr. /110/ for the year 2007, and extends on an area of ( 1260) hectares. The subscription in the Industrial Zone of Deir Ezour began in 11/5/2008. Where detailed regulatory studies had been accomplished with the plans, and its investment system was issued. The subscribers on industrial lots reached up to till the end of 2008, the number of ( 230) subscribers approximately. The total included projects reached (6) projects. The number of included industrial projects, according to the Investment Encouraging decree, in the four industrial cities: (Adra, Hisia, Sheikh Najjar, Deir Ezour ) during the period ( 2004-2008), about ( 163) projects ( which authorized the boards of directors by supreme Council For Investment, to prepare the inclusion decisions of the projects that will be erected inside them, in the beginning of 2004). Following is a look on the actual status of investment in the three industrial cities: A. Hisia Industrial City ( in Homs Governorate): Table No. (31) : Execution Status of Investment Projects, licensed in Investment Law No. /10/

for the Year 1991 and amendments; and the Legislative decree Nr./8/ for the year 2007, in Hisia Industrial City, During the Period ( 2004-2008):

Years Nos. Inc.

Projects

Executed or Under-execution Projects Exec., Rate %

Executed Investments

Costs ( Million)

Nos. Of Job Opportunities Industrial

License Partial

Register Final

Register Total

Executed

2004 11 6 4 0 10 91% 16840 2630 2005 10 6 0 4 10 100% 2104 303 2006 33 7 0 1 8 24.2% 25214 2902 2007 11 5 0 0 5 45.5% 1852 449 2008 8 8 3 2 5 62.05 1620 211 Total 73 32 7 7 38 52.05 47630 6495


39

Source: Statements of Ministry of Local Administration &Environment / MOLA&E/ ( Industrial Zones ) 2008


40

Table No. (32) : Distribution of Industrial Projects, Included in Investment decree 8, in Hisia Industrial City, according to the kind of activity, during the period ( 2004-2008):

Years Foodstuff Textile Engineering Industries Chemicals Others Total

2004 4 1 3 3 0 11 2005 0 1 0 4 5 10 2006 8 1 8 15 1 33 2007 2 0 1 3 5 11 2008 1 1 4 2 0 8 total 15 4 16 27 11 73

Source: Statements of Local Administration & Environment ( Industrial Cities) for 2008.

Table No. (33): Enterprises Executed in Hisia Industrial City, according to the Law No. /21/ for the year During the years ( 2002-2008).

Unit of Capital: SP Million Activity Statement 2002 2003 2004 2005 2006 2007 2008 Total

Eng., Industries

No. of Enterprises 0 2 3 60 49 30 7 151 Capital 0 13 40 1326 1116 807 408 3710 Employees 0 7 40 1127 843 376 182 2575

Chemical Industries


Foodstuff Industries

No .of Enterprises 1 3 1 38 10 16 4 73 Capital 35 139 70 394 454 691 151 1934 Employees 4 29 40 312 201 269 84 939

Textile Industries


Total No. of Enterprises 1 6 10 137 85 86 24 349 Capital 35 157 202 2660 2128 2695 815 8692 Employees 4 40 169 1794 1331 1129 397 4864

Source: Statements of Local Administration & Environment ( Industrial Cities) for 2008. B. Sheikh Najjar Industrial City in (Aleppo Governorate)

Table No. (34) : Specifying the execution status of investment projects, licensed as per Investment Encouraging decree, in Sheikh Najar Industrial City for the years ( 2004-2008).

Years

No. of licensed Projects

Executed or Under-Execution Projects

Execution Rate %

Investment Costs

(Million)

Job Opportunities

Partial Reg.

Final Reg.

Total Executed

2004 19 13 2 15 79% 2708 1110 2005 14 5 2 7 50% 3389 984 2006 11 8 2 10 90% 8268 1266 2007 3 1 0 1 33% 773 134 2008 4 0 0 0 0% 757 345 Total 51 27 6 33 64.7% 15895 3839

Source: Statements of Local Administration & Environment ( Industrial Cities) for 2008.


41

Table No. (35): Distribution of Licensed Industrial Projects, according to Investment Encouraging decree in Sheikh Najar Industrial City, in accordance with the kind of activity in

the period ( 2004-2008)

Years Foodstuff Industries

Textile Industries

Eng. Industries

Chemical Industries Total

2004 0 15 3 1 19 2005 0 9 3 2 14 2006 2 6 1 2 11 2007 0 1 1 1 3 2008 - 3 0 1 4 Total 2 34 8 7 51

Source: Statements of Local Administration & Environment ( Industrial Cities) for 2008. Table No. (36): Industrial Enterprises Executed in Sheikh Najjar Industrial City, in

accordance with the Law No. /21/ for 1958, in the period ( 2004-2008) Cost Unit: SP Million

Years No. of Projects

No. of Executed Industries Registers

Invest. Costs

No. of Work Opportunities

2004 0 0 0 0 2005 795 6 11109 4394 2006 280 43 18426 1847 2007 560 56 8558 3558 2008 357 42 13393 5473 Total 1992 147 51486 15272

Source: Statements of Local Administration & Environment ( Industrial Cities) for 2008. C. Adra Industrial City ( in Damascus Suburb Governorate)

Table No. (37): Specifying the Executive Status of Investment Projects, licensed as per Investment Encouraging decree in Adra Industrial City For the Years ( 2004-2008)

years No. of

licensed Projects

Executed or Under-Execution Projects Execution

Rate %

Executed Invest., Costs (SP

Millions)

Number of job

opportunities Ind. License

Partial Reg.

Final Reg.

Total Executed

2004 2 0 0 2 2 100% 3105 179 2005 7 0 5 2 7 100% 2382 421 2006 23 0 23 0 23 100% 16147 2530 2007 4 0 4 0 4 100% 1803 387 2008 3 3 0 0 0 0% 6789 585 Total 39 3 32 4 36 92.3% 30226 4102 Source: Statements of Local Administration & Environment (Industrial Cities) for 2008 Table No. (38): Distribution of Licensed Projects in Investment Encouraging Decree, in Adra

Industrial City, according to the kind of activity, for the period ( 2004-2008)


Textile Industries

Eng. Industries

Chemical Ind.

Other Industries Total

2004 1 0 1 0 0 2 2005 0 3 4 0 0 7 2006 2 0 19 1 1 23 2007 3 0 0 1 0 4 2008 1 0 1 1 0 3 Total 7 3 25 3 1 39

Source: Statements of Local Administration & Environment (Industrial Cities) for 2008.


42

Table No. (39): Follow-Up of Executed Industrial Projects, according to the Law No. /21/ for the year 1958, in Adra Industrial City ( 2004-2008).

years No. of

licensed Projects

Executed or Under-Execution Projects Executed Invest.,

Costs (SP Millions)

Nos. of Work Opportunities Industrial

License Partial

Registry Final

Registry Total

Executed

2004 0 0 0 0 0 0 0 2005 146 140 0 6 146 1400 1743 2006 646 635 4 7 646 602 5009 2007 334 319 5 10 334 16066 5514 2008 22 22 6 16 22 1418 270 Total 1148 1116 15 39 1148 19486 12536 Source: Statements of Local Administration & Environment ( Industrial Cities) for 2008. D. Deir Ezour Industrial City: Although this city is still in its first stages of development, it could include in 2008, six projects as per Investment decree 8, two of which in Engineering Industry, and four in Foodstuff, that will provide about ( 207) job opportunity.

E- Total Investments of Industrial Cities:

Table No. (40): Specifies Execution Status of Investment Projects, licensed in Investment decree for the Four Industrial Cities, ( 2004-2008)

years No. of

licensed Projects

Executed or Under-Execution Projects

Execution Rate %

Executed Invest., Costs (SP

Millions)

Nos. of Work Opportunities Industrial

License Partial

Registry Final

Registry Total

Executed

2004 32 6 17 4 27 84% 23267 4011 2005 31 6 10 8 24 77% 7875 1708 2006 67 7 33 1 41 61% 49629 6698 2007 18 5 5 0 10 55% 4428 970 2008 21 11 3 2 5 33.3% 9166 1141 Total 169 35 68 15 107 63.4 94365 14528

Source: Statements of Local Administration & Environment ( Industrial Cities) for 2008

Table No. (41): Development of Industrial Projects, Executed in the Three Industrial Cities, according to kind of Activity, during the period ( 2004-2008):


Textile Industries

Engineering Industries

Chemical Industries

Other Industries Total

2004 5 16 7 4 0 32 2005 0 15 7 6 5 33 2006 12 7 28 18 2 67 2007 5 1 2 5 5 18 2008 58 4 9 10 10 91 Total 80 43 53 43 22 241

Source: Statements of Local Administration & Environment ( Industrial Cities) for 2008


43

Table No. (42): Executed Industrial Enterprises, in the Four Industrial Cities, According to Law No. /21/ for 1958, during the years ( 2004-2007)

Unit of costs: SP Million

Years Nos. of Projects Executed Invest., Costs ( Million)

Nos. Work Opportunities

2004 10 202 169 2005 1078 15169 7931 2006 1011 21156 8187 2007 980 27319 10201 2008 403 15626 6140 Total 3482 79472 32628

Source: Statements of Local Administration & Environment (Industrial Cities) for 2008 Third: Transport Sector: A. Licensed Transport Sector Projects: Number of land, sea, and air transport projects, licensed as per Law No. /10/ for 1991, and its amendments, and Investment decree 8 No. /8/ for 2007, during (1991-2002), approx. (1760), from them (59) licensed in 2008, and total of transport projects, executed (1383) projects, offered (35018) direct job opportunity, with costs (SP 59.524 ) milliard. So execution rate of execution of the project for transport of goods and passengers (78.5%) regarding number of projects, and (60%) with regard of investment costs.

Table No. (43): Number of licensed Transport Projects, According to Investment decree 8, according to governorates ( 1991-2008), executed in same period:

Year 1991-1995 1996-2000 2001-2007 2008 Grand Total

Governorate. licensed Exec. Ex.Rate Incl., Exec. Ex.Rate licensed Exec. Ex.Rate licensed Exec. Ex.Rate licensed Exec. Ex.Rate

Damascus 100 92 92% 39 31 79% 143 62 47.3% 14 2 14% 296 187 63.1%

Damascus suburb 38 36 94% 26 21 80% 200 152 76% 11 5 45% 275 214 77.8%

Aleppo 44 37 84% 45 43 95% 245 206 84% 15 9 60% 349 295 84%

Hama 26 23 88% 22 19 89% 187 173 92% 4 0 0 239 215 89.9%

Homs 12 9 75% 10 11 110% 159 136 85% 1 0 0 182 156 85.7%

Lattakia 8 6 75% 19 20 105% 84 56 66% 2 3 150% 113 85 75.2%

Tartous 6 5 83% 8 6 75% 110 87 79% 7 4 57% 131 102 77.85

Idleb 5 3 60% 6 5 83% 43 39 90% 0 1 0 54 48 88.8%

Raqqa 1 0 505 1 2 200% 20 10 50% 1 0 0 23 12 92.1%

Deir Ezour 5 4 90% 5 3 60% 30 18 60% 1 0 0 41 25 60.9%

Hasaka 4 3 75% 1 1 100% 19 15 79% 1 0 0 25 19 76%

Daraa 2 2 100% 4 1 25% 15 16 106% 1 1 100% 22 20 90.9%

Swaida 1 1 100% 0 0 0 4 1 25% 1 0 0 6 2 33.3%

Qunaitra 0 0 0 0 1 0 4 3 75% 0 0 0 4 3 75%

Total 252 221 87.6% 186 163 87.6% 1263 974 77.1% 59 25 42.3% 1760 1383 78.5%

Source: Statements of MOT., & SIA.


44

-300

-200

-100

0

100

200

300

400

Damascus

Damascus SuburbAleppo

HamaHoms

Tartus

LattakiaIdleb

Deir Ezzor

Al HassakehAl Raqa

Dar'a

Al Sweida

Quneitra

Figure (9)Licensed and Implemented Transport Projectsا

Licensed Implemented

B. Executed Transport Investments: Table No. (44) : Status of licenses & Execution of Transport Projects, according to Investment

decree 8, according to years, and Investment costs, and job opportunities, during the period (1991-2008):

Years

Nos. of Licensed Projects

( Project)

Nos. of Executed Projects (Project)

Exec., Rate %

Invest., Costs of Licensed Projects (Million)

Invest., Costs of

Executed ( SP

Million)

Exec., Rate %

Nos. of Work Opportunities

1991-2000 438 384 87.6 27222 23748 87.2 18759 2001 221 66 29.8 4789 1550 32.2 1304 2002 309 203 65.6 5807 4070 70 2532 2003 123 194 157.7 2487 4494 180 2308 2004 176 254 144.3 6971 6440 92 3729 2005 104 22 117.3 1623 4251 26 2097 2006 280 780 278.5 22475 3550 15 1678 2007 50 57 114 5524 2842 51.4 1211 2008 59 25 42.3 758 8575 113 1400 Total 1760 1383 78.5 99097 59524 60 35018

Source: Statements of MOT., & SIA. Fourth: Real estate Compound Projects: Real estate sector has a special importance in the national economy, as related to ( 80-100) other subsidiary economic activity. Real estate Development & Invest., Law, was issued, with perspective to create a suitable legislative environment, to develop the sector of real estate and housing. On the way of renovation, the Supreme Council for Invest., issued a new inclusion initiative, characterized by special importance, and meets the government’s aspirations, for development and encouraging of real estate sector. These compounds consist of quarters that have all factors and elements of


45

housing, trade, business and tourism, and according to Intl., system it consists of housing towers, hotels, stock exchange markets, commercial offices and malls. It included three projects of this kind in the year 2005, and it is expected to issue a new investment law that regulates real estate investment.

Table No. (45): Real Estate Compounds Projects, licensed as per Investment decree 8

Investor Governorate Invest., Costs SR Million

Total No. Of job opportunities Local

Currency Foreign

Currency Intl., Trade

Center Project

Damascus Suburb 277.3 6232 6509 3600

8th., Gate Project.

Damascus Suburb 26440 3161 29601 700

Finance & Business Quarter Project

Damascus Suburb 585 16300 16885 2000

Total 27302.3 25693 52995 6300 Source: SIA’s database.

Some of these projects has begun to buy the lands, and to draw the plans, and to begin the project of Gate 8, achieving an accomplishment rate of ( 30%). Fifth: Agricultural Sector: The agricultural sector is still the pioneering one in the structural building of Syrian Economy. And employs one third of the manpower, and provides for self sufficiency. But the climate circumstances of previous years, and being accompanied by the delay in using modern irrigation methods, and the use of the old production methods, led to a quantities and qualitative decrease of products the main crops are: wheat and cotton. Other sectors development is attached to a far extent to the development of the Agricultural Sector. This sector gained encouraging exemptions. The Investment decree 8, could add new impetus to all these privileges, namely: getting use of drilling wells. And possibility of owning the project by the foreign investor. Licensed agricultural projects during the period: ( 1991-2008) (176) projects, 29, in 2008, are expected to create a total of (9167) job opportunity during ( 1991-2008), 1593 job opportunities, are expected in 2008, with total investment costs, estimated by: SP 32618.1 Millions, of them SP 5918.9 Million , in 2008. The small number of agricultural projects, that are included in Investment decree 8 is ascribed to being originally supported by the government, the thing which gave it various privileges: there’s no tax on agricultural sector. The rate of execution of agricultural investment projects reached in (1991-2008) about 34%, out of the number of projects. If we exclude the included projects in 2008, as being new and still in the establishment phase, and still didn’t enter the execution stage, the execution rate will reach ( 40.8%) offering direct and real job opportunities about ( 3074) opportunities.


46

Table No. (46): Status of Licensing and Execution of Agricultural Projects according to the stipulations of investment decree, according to Years, and the bulk of investment costs,

number of job opportunities during the period ( 1991-2008)

years No. of Agricultural Projects Investment Costs ( SP

Million) Job Opportunities

Licensed Executed % Licensed Executed % Licensed Executed 1991-2000 11 7 63.6 1057 469.8 44.3 529 281

2001 6 0 0 1007.9 0 0 374 0 2002 4 1 25 263.6 85.9 32 143 56 2003 15 5 33.3 2544.6 340.5 13 584 149 2004 12 9 75 3184.4 799.5 25 540 356 2005 17 6 35 3045.7 982.7 32.2 1118 396 2006 62 13 20.9 13006.6 1755.7 13 3558 785 2007 20 19 95 2588.2 5284.5 204 728 1051 2008 29 1 0.03 5918.9 268.4 4.5 1593 80 Total 176 61 34 32618.1 9986.8 30.6 9167 3154 Rate

2008% 16.4% 0.016% 100% 18.1 2.6 100% 17.3 2.5

Source: SIA’s Database. Sixth: The Health Sector: Investment in Health sector is considered one of the most important and promising fields of investments in Syria. We refer here to the human sources that Syria has, in the field of medicine, as an additional impetus for investment in this field, in addition to investment impetus entertained by all other economic sectors. Where health doctors, pharmacists, and dentists are considered distinguished cadres, both from scientific and professional points of view, on the regional level, regarding expertise, competence and number. Thus, Syria is looking for more investments in the field of hospitals, medical centers, health and healing complexes. And the medicine manufacturing projects and equipments. A. Specialized Hospitals: Inclusion of specialized hospitals projects in Syria, began since the year 2001, taking into consideration the importance of private investment in this service sector, to meet the needs of Syrian citizens. These hospitals are known for and characterized by their up-to-date facilities and administration; included hospitals numbered (27) specialized ones, during the period (2001-2008). With a total investment costs that reached (37023.948) SP millions .Job opportunities that they will create (8155) opportunity. All these hospitals have new specializations, or upgrade the existing ones, such as heart diseases and treatment of cancer patients, test- tube babies, and special needs people…etc.

Table No. (47): Private Hospitals Projects, That are licensed as per investment decree ,according to years, bulk of Investments , and the number of job opportunity, for the period

(2001-2008): ( Unit: SP million )

Years No. of Hospitals Investment Costs No. Of job opportunities

2001 1 979.634 323 2002 2 625.4 148 2003 1 265 115 2004 3 3632.217 708 2005 5 3321.275 914 2006 11 18402.078 2659 2007 2 8420.352 2874 2008 2 1377.992 414 Total 27 37023.948 8155

Source: SIA’s Data Base.


47

B. Medicines Manufacturing & Medical Equipment: Projects for production of medicaments and medical equipment are considered part of industrial activities, and they were allocated in this part of the report to clarify their statements, to look over them from medical point of view. Syrian medical industries have reached a very high standard, approx. (5800) trade name.

Table No. (48): No., of Investment Projects licensed in investment decree 8, according to economic activity and the investment costs, and No. of Employees, During the Period (1991-2008)

Activity No. Projects. Investment Costs (SP milliard)

No. Job Opportunity ( Employee)

Medicine Ind. 34 14.83 2883 Med. Equipment 9 3.82 918

Total 43 18.65 3801 Source: SIA’s Database.

Table No. (48): Development of Medical Professionals in Syria ( 2000-2007) with Rates

Owners of Medical Professions

Number Development Rate for each 10.000 Citizen 2000 2007

Physicians 22408 29055 14.8 Pharmacists 8868 15152 6.5

dentists 11160 13994 7.4 Seventh: Oil & Mineral Resources and Power: In the light of diminishing oil production, The Syrian government tries its best to develop oil excavation and treatment through investment activities in this field, especially that Homs and Banias refineries don’t meet the domestic demand. So efforts are being made to renovate those two refineries, and to establish new ones, such as that agreed upon with Iran, Venezuela and Malaysia Cap., /140.000/ b/d. Yet a Memo of understanding has been signed with Nour Kuwaiti Co., to erect an oil refinery in Deir Ezour with the value of SP / 88074/ Millions, with total Capacity of /140.000/ b/d., covered by Investment decree 8, it is still in the preliminary study stage. In addition an agreement has been signed between the Marble and Asphatl Co., and German Knauf Co., to rehabilitate the gypsum factory in Lattakia; also, the government encourages the private sector’s investments in the field of oil & Power, and submit privileges to encourage investors in this field. Sites had been handed over for erection of ten projects for producing Portland Cement, their total production capacity reaches about /24300/ thousand tons annually. Some began to purchase equipment to prepare the infrastructure of their projects. Also, experimental operation of the others is expected to be in 2009. This year Hama cement factory began production with an annual production capacity of /1.000.000/ tons. Similar companies, that have projects included in Investment decree 8, in the field of oil & gas, has begun their preparatory studies, such as well measurements and drilling. The thing which indicate their seriousness, considering their projects as already initiated.


48

Table No. (49): Oil & Mineral Resources Projects, that are licensed as per investment decree, according to bulk of investment costs, and the value of imported machineries, and the Number

of job opportunities ( 1991-2008)

Project Activity No. of Projects

Investment Costs (SP

Million)

Some in Foreign

Currency SP

Million

Value of Machinery SP Million

Job Opportunities ( Employee)

Portland Cement Production 27 279750.6 207380.5 183778.8 11320 Syrian -Emirates Co. for Wells Measures

1 482.3 450 426.2 32

Syrian Egyptian Co., For Drilling Liquids Engineering 1 98.4 82.90 26 44

Deir Ezour Refinery (Nour Kuwaiti Shareholding Co.) 1 88074.1 66020.12 64240 1200

Joint (Syrian-German) Co., for Lattakia Gypsum Company Rehabilitation 1 330 301 263 54

Power Generation Stations of Renewable Energy Sources (wind – sun) 2 338862 337394.7 333514 2120

Power Generation Station 1 15178 15042.3 15000 150 Power Generation by Wind, 1 88049 88010 74434 200 Service, Drilling , Excavation of Oil & Gas Wells, Geophysical Survey

3 1825.2 1770.6 1625.3 289

Prod., of Electrical Facilities (Resistance, Transformers, Electro-Lighting Receivers)

3 1168.7 1284.5 422.3 349

Conducting studies, and consultancy, preparation of designs, and specifications of Electrical Power

2 50 8 0 32

Total 43 813868.3 717744.6 673729.6 15790 Source: SIA’s & Ministry of Oil and Mineral Resources Databases Eighth: Distribution of Investment Projects According to Governorates: Distribution of projects on the geographic area of governorates could be looked at from the point of view of numbers distribution of these projects or according to approximately estimated investment costs distribution. If we consider these projects according to Number, we shall find that those governorates that had industrial cities, have attracted (56% ) of the included projects during the period (1991-2008), and the share of Damascus suburb (783) i.e., (22%); and Aleppo 727), then the governorate of Homs comes in the third place (342), and after that Damascus governorate (323) , and Hama (346), and Lattakia (178), Tartous (179), Idleb ( 109), and Raqqa (111), Daraa (107), Deir Ezour (100), Hasaka (66), Sweida (49), Quneitra (8) and (9) other projects, the location of which will be defined later. Thus we notice discrepancy with regard to licensed project investment costs, where Homs moved to first place where it got (38%) out of the total investment costs of licensed projects during (1991-2008), then came the governorate of Damascus Suburb (22%), and Aleppo (9.6%) and Deir Ezour (7.2%).


49

Table No. (50): Distribution of projects as per Investment decree 8, in order and according to governorates, numbers and bulk of investment costs during the period ( 1991-2008)

Declining Arrangement of Governorates

According to No. of Projects Declining Arrangement of Governorates

According to Invest., Value

Governorate No. of Projects

Project No., Rates

% Governorate Investment

Costs

Investment Costs Rates

% Damascus

Suburb 783 22 Homs 619.47 38

Aleppo 727 21 Damasub 366.261 22 Homs 342 9.9 Aleppo 155.520 9.6

Damascus 323 9.3 Deir Ezour 115.988 7.2 Hama 346 10 Lattakia 43.804 2.7

Lattakia 178 5.1 Tartous 24.111 1.4 Tartous 179 5.2 Hama 50.228 3.1

Idleb 109 3.1 Damascus 49.113 3 Raqqa 111 3.1 Raqa 40.521 2.5 Daraa 107 3.1 Haskah 25.169 1.5

Deir Ezour 100 2.9 Idleb 13.987 0.8 Hasakah 66 1.5 Daraa 21.027 1.3 Swaida 49 1.4 Swaida 6.188 0.3

Qunaitra 8 0.2 Qunaitra 1.499 0.09 To be defined

later 9 50.2 To be defined later 74.994 4.6

Grand Total 3437 100 Grand Total 1.607.890 100 Source: SIA’s Database. Ninth: Distribution of licensed investment projects, according to legal form: Table No. (51): Projects licensed as per Investment decree 8, according to legal form During

the Period ( 1991-2008)

Legal Form Nos. of Projects ( Project)

Rate Distribution %

Their Invest., Costs ( SP milliard)

Rate Distribution %

Individual Establishments 1721 50 318.7 19.8

Joint–Stock companies

145 4.3 536.9 33

Joint Limited liability

Companies 13 0.37 8.9 0.54

Joint-Stock Companies

6 0.17 32.9 2

Limited Liability Companies 236 6.89 502.1 31.3

Simple Sleeping Partnership 443 12.8 83.9 5.2

Joint liability Companies 873 25.7 124.5 7.7

Grand Total 3437 100 1607.9 100 Source: SIA’s Database.


50

Individual establishments dominated with regard to legal forms of licensed investment projects where their rate was (50%) of total number of the projects, followed by joint companies in second place (25.7%) of total number of projects. Then comes the other legal forms, where simple sleeping partnership companies formed (12.8%) of the companies of limited responsibility (6.8%) then joint-stock companies (4.3%) for each of them; there are (13) common companies of limited responsibility, and (5) common shareholding companies. The thing which indicate the existence of factual and self reasons that limit the establishment of shareholding companies, the most important of which is (Damascus Securities Exchange) . Such markets are the basic markets necessary for Funds companies, in addition to the time taken to establish such companies. And the most important is the self factor of the investor, who prefers to form individual or family company to administrate his money, or to evade paying the stamp fee. If we discuss the rates of investment cost distribution we shall find that (33%) at share holding companies, and (19.8) at individual establishments, followed by companies of limited responsibility (30.5%). In addition, there are ten holding companies with total capital of SP /292445/ millions, that equals to USD /5848.9/ millions, the last of which The Syrian –Qatari Holding Co. USD 250 Millions.

Table No. (52): Holding Companies, licensed by Investment decree 8, with their Capitals During the Period ( 1991-2008)

Holding Company Capital ( SP Million) Equivalent of USD $ (Million) 1. Syrian Qatari Investment Co. 250000 5000 2. Al-Zaem Holding Co. 1000 20 3. Al-Ofouq For Investments Holding 1250 25 4. Construction Holding Company 1000 20 5. Sham Holding Company 18025 360.5 6. Syria Holding Company 4000 80 7. Kuwaiti Holding Company 10000 200 8. Orient Investment Fund Holding Company

4000 80

9. Castle Invest Holding Company 1000 20 10. Construction Material Holding Company

2170 43.4

Total 292445 5848.9 Source: SIA’s Database.

Figure(10) Distribution of of Investment Projects as per Legal Form

shareholding

joint shareholding

Joint Limited Liability

Limited Liability

Joint

Individual

Simple

Recommendation


51

Tenth: Estimated job Opportunities of Investment Projects: The occurrence of job opportunities will remain the main important factor, desired by countries attracting investment projects, and it is the thing which looked after by the government, stating that the specified numbers for obtaining the coverage of investment encouraging decree is far less than real numbers, due to the fact that project owners want to evade more taxes, so they do not register all employees in Social Insurance; the thing which Law No. /8/ for the year 2007 for encouraging investment, tried to evade. When it offered additional tax deduction privileges to the project which has all its employees registered in social insurance. It’s also well known that the direct employment opportunity creates around three to five indirect job opportunities. Job opportunities supplied by investment projects, licensed as per investment decree, are estimated during the period (1991-2008) to be (207661) job opportunity, of which (23235) opportunity expected from projects in 2008, that are actually verified through the executed projects, about (105465), direct job opportunity during the period (1991-2008) some of which in the industrial sector and related sectors (66841) and (35018) opportunity at transport projects, (3608) job opportunity in the agricultural sector. Noting that the included projects in the last two years, are still in the establishment stage.

Figure shows the distribution of work opportunities, of included Projects during the period ( 2001-2008)

Distribution of Job Opportunities of Licensed Projects 2001-2008

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

20012002200320042005200620072008

2001 2002 2003 2004 2005 2006 2007 2008

Source: SIA’s Database. Syria entertains a privilege of wage by hour rate, the following figure shows the wage by hour rate in Syria, compared with other chosen countries7. Syria has the main adobe, since it has a considerable number of authentic scientists and engineers that could be depended upon in importing and resettlement of modern technologies.

7 ess, report for raising competitive abilities of Cotton Wear Source: The Project of Supporting Competitive Preparedn

P.36


52

0

5

10

15

20

25

Syria Egypt Turkey Brazil Italy Korea USA

Figur(12)Wages/Hour for Selected Countries for 2003(American Cent)

Eleventh: Bulk of Imported Machineries & Equipment for Investment Projects: The value of machineries and equipment imported for licensed projects during the period (1991-2008) are estimated to be SP ( 1027.8) milliard, out of which SP (454.5) milliard 2008, actually executed from them SP (128) milliard, in industry, and SP (11.5) milliard in other sectors, that makes SP (207.5) milliard, i.e., the execution rate reached (31.3%). The thing which indicate the bulk of technologies, machineries, and equipment, imported, that are entered especially for Syrian Industry, in order to make it cope with modern world technologies, which is a positive aspect provided by the Investment Law. In addition, the value of means of transport, imported especially for transport projects, specifying that all imported machineries and equipment are new and not renovated. Twelfth: Bulk of Investment Costs of Investment Projects: Investment costs of investment projects, included in Investment Law No. /10/ for 1991 and amendments, and decree Nr. /8/ for the year 2007, during the period (1991-2008) to about SP (1607.9) milliard out of which SP (1280.8) milliard in foreign currency. Whereas the share of 2008 of this cost reached SP (537.4) milliard i.e., (33.42%) of the total of investment total, for licensed projects since the release of investment Law.

Figure(13) Distribution of Investment Costs of licensed Projects as per Investment Law accordiong to Years(Million SP)

537

.4

144

.8

441

.2

179

.5

87

24.2

43.7

27

0

100

200

300

400

500

600

2001 2002 2003 2004 2005 2006 2007 2008


53

Thirteenth: Extension of Executed Projects: Already executed projects recur to expanding their production capacities, by adding new production lines, which increases their investment costs, value of machineries and number of employees. The number of existing projects that doubled their production capacities, and investment costs during the year 2007 over /64/ industrial projects, with amended investment costs reaching SP (17.9) milliard out of which for example (Al-Sweidi Cable Company, French Bell Fromagerie for production of cheese, and a great number of foodstuff, textile, metallurgical …etc., industries. In addition to (14) transport projects with amended investment costs reaching SP (400) Millions.


54

Chapter Four: Actual Status of Investment in Other Sectors:

First – Tourism Sector: Tourist investment developed in two main fields, one is the investments resulting from tourist establishments( hotels, restaurants),and the second is tourist investments under construction all due to tourist investment markets, such as preparation of land which is not occupied, and economically feasible. In addition to adopting new contracting formulations, and follow up of new style in investment marketing, improvement of legislative environment, securing the required financing and infrastructure, and simplifying procedures. 1. Tourist Investment: current investments (under service) reached and the future investments (under construction) at the end of 2008 reached approx., SP /417.052/ milliard, where it reached SP /147.651/ milliard till the year 2004, i.e., in an average annual growth of 29.64%, whereas the value of investments of tourist establishments, that are already in service SP /198.388/ milliard, at the end of 2008, versus SP /143.409/ milliard at the end of 2004, with annual growth rate of (8.45%). Also under-construction investments reached at the end of 2008 about SP /218.664/ milliard, versus SP /4.242/ milliard at the end of the year 2004, with annual growth rate of (167.95%).

Table No. (53): Tourist Investment Indicators During the Period ( 2004-2008)

Statement Till 2004 Till2005 Till 2006 Till 2007 Till 2008 Average Annual Growth

Total Investments SP milliard

147.651 178.374 287.169 355.374 417.052 %29.64+

Investments in Services SP milliard

143.409 166.201 186.168 192.952 198.388 % 8.45+

Under Execution

Investments SP milliard

4.242 12.173 101.001 162.422 218.664 % 167.95+

Source: Ministry of Tourism / MOT/ * Annual Tourist Investment Flow of under-construction Projects increased to SP /1.4/ milliard in the year 2005, and to SP /52.8/ milliard in the year 2008, with a growth rate of +235% between the years 2005, 2008, also on the other hand the flow is expected to be SP /68.830/ milliard during 2009.

Table No.(54): Flow of Executed Tourist Investment During the Period ( 2005-2008 )

Yrs. Exec. 2005

Exec. 2006

Exec. 2007

Exec. 2008

Expected 2009

Growth Rate 2005/2008

Annually executed Investments SP milliard

1.413 4.057 33.666 52.753 68.830 +235%

Source: MOT


55

A. Projects already in service: Bulk of investments put in service until 2005 reached SP /166/ milliard and in 2006 entered service /567/ establishments with an investment sum bulk of SP/20/ milliard volume of investment put in service, which was executed in 2008 the amount of SP/5436/million with inclusion capacity of (93) establishment with (1508) beds and (9578) chairs, so that the total during this period would be (3131) establishment, with a capacity of (84585) beds and (299958) chairs, and a cost reaching SP (198.3) milliard, as specified in the following table:

Table No. (55) : Development of In-service Projects ( 2005-2008) SP Million.

Statement No. Of Establishments

Capacity Tourist Invest. ( SR Millions) Beds Nos. Chairs Nos.

Hotels 2005

566 43262 64893 118970 Restaurants 1780 0 157436 47231

Total 2346 43262 222329 166201 Hotels

2006 56 2261 3134 8488

Restaurants 511 0 46089 11603 Total 567 2261 49223 20091 Hotels

2007 29 1554 3403 3475

Restaurants 115 0 15425 3306 Total 144 1554 18828 6781 Hotels

2008 19 1508 260 3497

Restaurants 74 0 9318 1939 Total 93 1508 9578 5436

Grand Total 3131 84585 299958 198388 Source: MOT B. Projects under Construction: Under-construction tourist projects, that obtained construction licenses in 2004, prior to basis year, which were supposed be put in service as from the beginning of 2007 the amount of SP /4240/ Millions, and investment bulk in 2005, which were supposed be put in service as from 2008 the amount of SP 7933 Millions, and investment of 2006, which were supposed to be put in service in 2009 the amount of SP /88828/ million, and the bulk of investments in 2007 which were supposed to be put in service in 2010, the amount of SP /61421/ millions, investments of 2008 which shall be put in service in 2011 with 56242 Million SP as follows:

Table No. (56): Development of Under-Construction Projects During the Period ( 2004-2008)

years

Restaurants Hotels Total No. of Establishments

Investment Value ( SP Million)

No. of Establishments

Investment Value (SP Million)

No. of Establishments

Investment Value (SP Million)

2004 20 820 19 3417 39 4240 2005 28 2491 18 5439 46 7933 2006 69 5943 82 83362 151 88828 2007 47 5034 59 56468 106 61421 2008 32 52847 70 3395 102 56242

Source: MOT.


56

0

20000

40000

60000

80000

100000

120000

Up till 2004 Up till 2005 Up Till 2006 Up till 2007 Up till 2008

Figur(14) Increase of Hotels Beds in Service and in Establishments UnderاConstruction 2004-2008

0

100000

200000

300000

400000

500000

600000

Up till 2004 Up till 2005 Up till 2006 Up till 2007 Up till 2008

Figure (15) Increase of Feeding Chairs in Tourist Establishments in service and Under Construction

C. Geographic Distribution of Tourist Investments: * Tourist investments of current establishments, concentrated in six governorates (Damascus,

Damascus Suburb, Aleppo, Homs, Lattakia, and Tartous) in a rate of 87.6% and the rest of governorates (Daraa, Sweida, Deir Ezour, Raqqa, Hasaka, Idleb, Hama, Quneitra) with the rate of 13.4%.

* The Geographic distribution of under-construction future projects indicate an increase in the number of Investors desiring to invest in the governorate of Damascus Suburb, where its share increased for the already in-service projects from 20% to 30.17%, of total future investments under construction. This is applied also to Tartous governorate, where its share of current investments ( put in service) from 7.71% to 19.23%, whereas the rate of investments decreased in Damascus Governorate, because there is not enough land to meet the demand of investment; therefore, the demand transferred to Damascus Suburb Governorate. Where the rate of investments remained fixed for Damascus & Damascus Suburb, for investments in service and under construction (48.6% , 48.8) consecutively Damascus and Damascus Suburb region remain the most attractive province for new investments (48.86%) versus the increase of investment in Coastal region to (31.64%) of the total future investments (under construction) on the country’s level. Whereas Aleppo and Lattakia maintained the same rates of the in-service and under-construction .

Table No. ( 57): Geographic Distribution of Tourist Investment According to Establishments. Tourist

Investments Damascus Damascus suburb Lattakia Tartous Aleppo Homs Total Other

governorates Under

Construction % 18.68 % 30.17 %12.41 %19.23 % 10 %4.8 %95.29 %4.71

In Service %28.6 % 20 % 13.76 % 7.71 % 11 %6.5 % 87.6 % 13.4


57

2. Job Opportunities: Job opportunities realized by in-service tourist establishments (150.023) thousand, at the end of 2008, versus (106.645) thousand job opportunity in 2003, in an average annual rate of (+ 7%), as for realized job opportunities in building sector as a result of new tourist projects, they reached in 2008, about 35.151 thousands job opportunities, versus /942/ job opportunities in the year 2005, in the average rate of +3.2%.

Table No. (58): Increase of Job Opportunity As a Result of Tourist Investment During The Period ( 2003-2008)

Job Opportunities In 2003 In 2004 In 2005 In 2006 In 2007 In 2008

Direct Opportunities 106645 111434 126424 139048 145324 150023 Ann., Opportunities

Building Sector 0 0 942 2704 22444 35151

Table No. (59): Development of Accumulated Investments, According to

Form of Ownership During the period 2000-2008

years

Hotel Activity Restaurant Activity Total

Public Sector

Total Private Sector

Total Hotel

Invest.

Total Rest.,

Invest., Total Public

Sector (value)

Private Sector value

Public Sector (value)

Private Sector value

2000 11029 67652 2166 30343 13195 97995 78681 32509 111190 2001 11029 68407 2166 31683 13195 100090 79436 33849 113285 2002 11029 70053 2166 33134 13195 103187 81082 35300 116382 2003 11029 78506 2166 43638 13195 122144 89535 45804 135339 2004 11029 80937 2166 49240 13195 130177 91966 51406 143372 2005 11029 88474 2166 64533 13195 153007 99503 66699 166202 2006 11029 93674 2166 79300 13195 172974 104703 81466 186169 2007 11029 97149 2166 82606 13195 179755 108178 84772 192950 2008 11029 100646 2166 84545 13192 185191 111675 86711 198386

Source: MOT.

0

50000

100000

150000

200000

2000 2001 2002 2003 2004 2005 2006 2007 2008

Figure (16) Development of Accumulating Investments


58

Table No. (60): The Establishments under operation, according To region Regions Governorates Capacity Tourist

Investment ( SP Million)

Rate of Investments Nos. Beds Nos. Chairs

Damascus & Damascus

suburb Governorate

Damascus 15093 75215 56791 28.63 Damascus

suburb 8845 67469 39605 19.96

Total 23938 142684 96396 48.59 Southern Region

Daraa 505 4240 2411 1.22 Swaida 20 2590 777 0.39

Qunaitra 25 640 235 0.12 Total 550 7470 3423 1.73

Coastal Region

Lattakia 7083 39169 27301 13.76 Tartous 2986 28799 15297 7.71

Total 10069 67968 42598 21.47 Middle Region

Homs 3856 14768 12900 6.50 Hama 1027 11216 5704 2.88 Total 4883 25984 18604 9.38

Northern Region

Aleppo 5716 29213 21937 11.06 Idleb 392 6428 2769 1.40 Total 6108 35641 24706 12.45

Eastern Region

Deir Ezour 1733 6170 5837 2.94 Hasaka 990 8813 4574 2.31 Raqqa 314 5228 2250 1.13 total 3037 20211 12661 6.38

Total 48585 299958 198388 100 Source: M.O.T. Table No. (61): Under-Construction Establishments according to Regions and Governorates

During the Year 2008

Regions Governorates Capacity Tourist

Investments, ( SP Million)

Rate of Investments No. Beds No. Chairs

Damascus & Damascus

suburb governorate

Damascus 5323 9222 40850 18.68 Damascus

suburb 16133 43348 65961 30.17

Total 21456 52570 106811 48.85

Southern Reg.,

Daraa 563 3008 1053 0.48 Swaida 805 7646 1870 0.86

Qunaitra 0 0 0 0 Total 1368 10654 2923 1.34

Coastal Region Lattakia 7993 33792 27145 12.41 Tartous 10430 29983 42049 19.23 Total 18423 63775 69193 31.64

Middle Region Homs 4092 17507 10491 4.80 Hama 358 8352 1815 0.83 Total 4450 25859 12307 5.63

Northern Region

Aleppo 4978 31717 21967 10.05 Idleb 16 3050 676 0.31 Total 4994 43767 22643 10.36

Eastern Region

Deir Ezour 230 510 636 0.29 Hasakah 652 10317 2508 1.15 Raqqa 607 6731 1643 0.75 total 1489 17558 4787 2.19

Total 52180 205183 218664 100 Source: MOT


59

Second: Financial & Educational Sector: 1- Private Banks: The monetary authority continued directing its policy towards achieving financial stability, and a fixed exchange rate. Imports financing operations through the banking system, have expanded, and the Syrian Pound got separated from being attached to the USD Dollar, and had been attached to the Private Drawing Rights Unit, the thing which provides more stability to the Syrian Pound’s exchange rate. Nowadays the number of banks operating in Syria reached /20/ banks, of which six public banks, and fourteen private banks, among them three Islamic banks. All these banks have commenced operations in Syria, and established branches in the governorates. Moreover, licenses has been issued to some financial exchange establishments, and some of them began operating already; thus, the banking system witnessed a positive growth in the last two years, in conformity with the general economic situation. The assets, customer deposits, and loans to private sector, were increased, in addition to the increase of foreign deposits. The capitals increased by three doubles according to statistics of The Syrian Central Bank. The adoption of stimulus behavior attracted more investors to the market. Following is a list of banks already operating in Syria:

Table No. (62): Bulk of investments, and the rate of foreign investment, and number of branches in the traditional licensed banks.

Traditional Private Banks

Name of the Bank Date of Operation

Capital (SP

Million)

Foreign Currency

Rate

Branches Nos. Employees

Bemo Saudi –French Bank

4/1/2004 2500 49 % 23 490

Bank of Syria and Overseas

7/1/2004 3000 49 % 17 326

International Bank for Trade & Finance 3/4/2004 3000 49 % 20 325

Audi Bank Syria 15/9/2005 2500 49 % 20 401 Arab Bank Syria 2/1/2006 3000 49 % 14 273

Byblos Bank Syria 5/12/2005 2000 49 % 7 243 Syria & Gulf Bank 13/6/2007 3000 49 % 4 100 France Bank Syria 15/1/2009 1750 49 % 2 63 Jordan Bank Syria 25/11/2002 1500 49 % 1 76

Al-Sharq Bank - 2500 49 % - - Qatar National Bank

Syria - 5000 49 % - -

Total - 29750 49 % 108 2297 Source: Syrian Central Bank’s statements.

Table NO. (63): Licensed Private Islamic Banks During (2006-2008) At Governmental Authority

Bank Name Capital SP Million

Foreign Currency

Date of Commencement

Branches

Employees

Syria International Islamic Bank

5000 49% 15/9/2007 7 218

Al-Sham Bank 5000 49% 27/8/2007 3 84 Al-Baraka Bank 5000 49% - - -

The Syrian Commission on Financial Markets and Securities is the regulating authority of financial sector in Syria, and has all powers to achieve its objectives of regulating and development of


60

financial markets, in a just way that maintain and ensure safe financial dealings in Syria, to lessen or prohibit dangers accompanying financial transactions, and to encourage saving methods in a way that serve the national economy. Supervised by the commission are the following entities:

1) Companies issuing financial securities. 2) Financial & brokerage licensed companies. 3) Investment banks and licensed Investment Funds. 4) Securities markets. 5) Licensed Companies & Adopted Bureaus of Financial Auditing

The Commission is the entity which is responsible for issuing all instructions and performing all duties to achieve its objectives, it could for this purpose, divulge the information relating to financial securities in addition to regulating and controlling financial deeds and dealing with them. q Operating companies (that has set forth some of their shares for public subscription) fifty-two

companies, with estimated total capitals of SP/67.7/ millard, noting that this number could increase greatly in the near future, after the issuing of companies’ Law No. (3) for the year 2008 and decree Nr. (61) for 2008, which encouraged companies to convert to shareholding companies, through endowing them some spurs, also the number of shareholding companies that were established during the year 2008, (5) companies, only four of them were subscribed for their shares, also there were some other companies that applied for issuing shares for them, and are still completing their required procedures. Financial issuances during the period of the commission since the end of 2006 and until the end of 2008, were sixteen issuance. Total of share value set forth for public subscription SP/14.646/ milliard, and the total capitals of these companies reached SP/31.125/ milliard.

q The rates set forth for public subscription by shareholding companies established during the last two years differed, so that the rate reached 51% of the capital, whereas the lowest rate was 15%, also the rates of covering the shares, set forth for subscription, by shareholding companies, where the highest rate was 18%.

As for what is related to Investment Funds, there is no investment funds in Syria up till now, bearing in mind that commission had previously prepared the regulation for investment funds. Following the issuance of decree No./55/ for the year 2006 for the establishment of Damascus Securities Exchange, there has been an integrated system of work for the Syrian Commission on Finance Markets and Securities, so that to set forth an effective sound financial sector. 2- Insurance: Insurance Supervisory Commission has been established in order to set a regulatory frame for the local insurance market, with all its activities. And to define the administrative standards, and prerequisites to ensure quality control & assurance, to protect dealers, and investors in this sector. There are now fourteen insurance companies, besides the governmental Syrian Insurance Organization, four of them are Islamic Insurance Establishments (Joint).

Table No. (64): Private Insurance Companies In Syria,

And Foreign Shares in them till the end of 2007

Company Capital SP Million Foreign Shares SP Million Foreign Shares %

United Insurance Co. 850 255 30% Arab Syrian Insurance Co. 1000 600 60%

National Insurance Co. 850 272 32% Intl., Syrian ( Arob) Co. 1000 340 34%

Arabian – Syrian Insurance Co. 1050 535 50.95% Syrian – Kuwaiti Insurance Co. 850 424 49.9%


61

Arab Orient Insurance Co. 850 340 40% Syrian Trust Insurance Co. 850 833 98%

Al-Aqila Joint Insurance Co. 2000 740 37% Cooperative Union For

Insurance 1000 400 40%

Nour For Joint Insurance 1500 501 33.4% Adeer Insurance Co. 1250 700 56%

Syrian Islamic Insurance Co. 1000 540 54% Aaman Joint Insurance Co. 1300 637 49%

Total 15350 7117 46.36% Source: Insurance Supervisory Commission 3. Financial Services & Brokerage: The Syrian Commission on Financial Markets and Securities continued receiving licensing applications, submitted to it by the entities that desire to establish financial services and brokerage companies, the results were until the end of 2008, as follows: q Three companies got the commencement order, they are shareholding companies with capital

SP /670/ millions, and their activities included administration, issuance, consultancies, financial brokerage and investment administration.

q Four companies got final licenses; they are limited companies, capital SP/260/ Millions. q Thirty-one companies got preliminary license, their capitals SP/4.660/ milliard. 4. Free Zones: Statements of The General Organization For Free Zones, indicate that the number of free zones in Syria reached (8) zones, in addition to the free zone in Hisia – under establishment- total of investments in the eight free zones reached in 2000 about $ 514, millions, and increased to reach in 2008 $ 777 millions, during that period employees in free zones reached in 2008, ( 8959), and the number of foreign investing companies (86) companies, number of establishments developed to (610) in 2000 to reach (1215) establishment in 2008.

Table No. (65): Financial Indicators in The General Organization of Free Zones During the Period 2000-2008

Years Till 2000

Till 2001

Till 2002

Till 2003

Till 2004

Till 2005

Till 2006

Till 2007

Till 2008

Returns (SP millions) 426 498 607 560 705 786 925 1077 1034

Goods Movement

In/Out (Trade Exchange) SP

milliard

44 70 88 104 125 158 206 230 240

Investment Capital in Free

Zones ($ million)

514 524 535 546 557 627 653 706 777

No. of Invested Enterprises 610 630 654 678 712 786 932 1009 1215

No.of employees in

Invested Establishments

8943 9392 15000 15700 16800 18000 22000 9455 8959

Foreign Investment Companies

- - 32 41 52 58 62 63 86

Source: General Organization For Free Zones Database.


62

Table No. (66): Bulk of Foreign Investments at The General Organization For Free Zones / GOFZ/, 2008

Branch Nos. of Projects, According to Activity Capital ( $ thousand) Trade Indus., Banking Service total

Lattakia 2 1 0 0 3 1783 Port 1 0 0 0 1 1500

Airport 3 0 0 0 3 285 Tartous 11 1 0 0 12 61991.7

Adra 6 8 0 0 14 60092 Aleppo 5 0 0 0 5 3804

Damascus 18 7 7 5 37 156973 Al-Yaroubia 11 0 0 0 11 2300

Total 57 17 7 5 86 288728.7 Source: GOFZ’s database

0

200

400

600

800

1000

1200

1400

2000

2001

2002

2003

2004

2005

2006

2007

2008

Figure (17) Development of Invested Capital Volume and Number of Establishments in Free Zones as per Years

5. Higher Education: Established private universities reached (20) universities, of them 14 has been opened. With total capitals SP/ 7652.5/ Millions, in which the foreign capital 35%, and the ministry of Higher Education, carries out continuous follow up of the private universities, to verify their application of the legislative decree Nr. /36/ for the year 2001 and its executive instructions and the scientific endorsements.

Table No. (67): Total Development of Number of Students at Private Universities in Syria 2006-2008

Yrs. 2006 2007 2008 Average Growth Rate

Total of Students 7029 11007 16717 %54.2


63

Chapter Five Foreign Direct Investment ( FDI )8

Foreign investment forms one of the main economic bases for modern times, because it necessarily upholds an important and risky role in the process of economic and social development in countries of the world, as it is a main channel, through which capital flows, along with scientific and technical expertise. Therefore countries of the world and international society regulates the investment process (Non-national), and to decide the insurances for it, since it is related to circulation movement of capitals and investment thereof, internally and abroad9. It is also considered a tributary for main resources that support the national powers, to which the tenth development plan heads toward magnifying its role under the available limited local resources. In addition to the fact that it is an important tool to fasten the industrialization processes and development of tourist, services, and infrastructure sectors, and transference of developed technology and administrative skills, and the discovery of foreign markets for Syrian products. And with an objective to make Syria the harbor of foreign investment, the plan takes into consideration the necessity to design and avails programs of competitive powers, with similar countries in the region. a. Net FDI :

Table No.(68): Net FDI to Syria During the Period 2000-2008, $ Million Yrs. 2000 2001 2002 2003 2004 2005 2006 2007 2008

Net FDI Flow 270 110 115 160 275 508 613 898 1187 Source: statements of Syrian Central Bank ( 2008, estimated)

2000 2002 2003 2004 2005 2006 2007 2008

270 115160

275

1187

898613508

0

200

400

600

800

1000

1200 Figure(18)FDI Net Flow (million USD)

b. FDI Licensed Projects: According to statements FDI is still growing where the number of Foreign Investments or those including Arab or Foreign Partners, included in the stipulations of Investment Law Encouraging

8 Payment balance indicator issued by IMF in its 5th copy, 1993, identifies FDI, that it is an investment that reflects a long term relation and perpetual interest of an entity inside another economy, other than that of the Investor. The direct objective of the investor is to practice kind of influence on the administration of the resident establishment in the other economy, the rate of 10% or more of ownership rights ( normal shares or votes power in the establishment) . In order to describe an investment as FDI . 9 FDI, hindrances and legal guarantees issued by Arab Unity Center , Dr. Duraid Mahd., Alsamraee


64

during the period of (1991-2008), to 234 projects with a total investment costs of SP/692.7/ milliard i.e., (43%) of total costs for licensed projects. Participating countries in investments in Syria reached /38/ countries, Turkish Investors maintained the pioneering stand in foreign investments (28) projects; Iraqi Investors pioneered the Arab countries (34) projects, followed by Kuwaiti Investors (25) projects, then Lebanese (23) projects, and Saudi Investors (21) projects. This is ascribed to the facilitation and improvement of systems and procedures relating to investment process, with the support of investment efforts, creating an internal and external relations network, by Syrian government and businessmen, with an objective of attracting investors, and the return of Syrian Expatriates Capitals. The annual report about the investment climate in Arab countries for 2005, issued by Arab Organization For Investment Insurance /AOII/,shows that eight Arab countries have witnessed rise in their shares of FDI flows, sixth was Syria which attracted USD$ /2.7/ milliard, and 9.9% of total foreign investments coming into Arab countries. Table No. (69): FDI included in Investment decree 8 according to years and economic activity,

and bulk of investment costs, number of employees during the period ( 1991-2008)

years

Nos. of Included Projects According to Economic Activity Total

Invest., Costs (SP

Million)

Job Opportunities

Industry Agriculture Transport Others

1991-1995 7 2 1 0 10 3156.8 956 1996-2000 17 1 2 2 7 1310.1 321

2001 8 4 2 0 14 3090.5 1316 2002 9 0 2 1 12 18437.5 2936 2003 3 1 1 2 7 3882.6 1807 2004 10 0 4 1 15 24049.2 2015 2005 10 2 7 5 24 98632.7 11462 2006 33 6 21 3 63 132316.6 6542 2007 17 1 5 1 24 10579.6 4184 2008 32 2 6 2 42 393033.2 7859 total 146 19 51 17 233 692796.8 40543 Total

Licensed Projects

1467 176 1760 34 3437 1607900 207661

FDI % 9.9 10.8 2.9 50 6.7 43 19.5 Source: SIA’s Database

Figure (19) Development of Investment Projects during 1991-2008

2008

2007

20062005

2004

20032002

20011996-20001991-1995


65

Table No. (70): FDI projects covered by Investment decree 8

for countries ( Arab) according to economic activity Bulk of Investment Costs

during (1991-2008) compared by 2007

State Period ( 1991-2007) In 2008 Economic Activity Total Costs (SP

Million) Economic Activity Total Costs (SP

Million) Industry Transport Agriculture Other Industry Transport Agriculture Other Iraq 14 17 3 0 34 15703.7 2 3 1 0 6 1757.7

Kuwait 19 2 3 1 25 52309.9 6 1 0 0 7 3318.3 Lebanon 16 4 3 0 23 3995.2 2 0 0 0 2 344.6

KSA 16 4 1 0 21 84152.6 3 0 1 0 4 18820.2 Jordan 8 6 0 0 14 2887.2 1 0 0 0 1 191.7 UAE 4 0 0 3 7 41208.5 2 0 0 0 2 9860.2 Egypt 2 1 0 3 6 10870 1 0 0 0 1 9907.5

Palestine 3 2 0 0 5 1177.4 1 0 0 0 1 113.4 Algeria 2 0 0 0 2 204.6 0 0 0 0 0 0 Bahrain 2 0 0 0 2 27299.4 1 0 0 0 1 27179 Qatar 2 0 0 1 3 473.9 2 0 0 0 2 143.6 Libya 0 0 1 0 1 56.7 0 0 0 0 0 0 Yemen 1 0 0 0 1 37.5 0 0 0 0 0 0

Morocco 0 0 1 0 1 241.3 0 0 0 0 0 0 Total 89 36 12 8 145 240617.9 21 4 2 0 27 71636.2

Source: SIA’s Database. Table No. (71): FDI Projects Licensed by decree 8

for foreign countries according to economic activity and Bulk of investment costs

during 1991-2008, compared by 2008

state

Period ( 1991-2008) In 2008 Economic Activity

Total Costs (SP

Million)

Economic Activity Total

Costs (SP

Million) Industry Transport Agriculture Others Industry Transport Agriculture Others

Turkey 19 5 3 1 28 23008.3 7 0 0 0 7 3979.5

Germany 9 0 0 2 11 342226.7 1 0 0 1 2 315148.0

Iran 5 0 0 3 8 25607.3

Russia 2 0 2 1 5 1650.9

Switzerland 2 1 1 0 4 2202.3

Cyprus 2 1 0 0 3 650.9 Britain 2 1 0 0 3 15026.0 France 3 0 0 0 3 2974.1 Korea 3 0 0 0 3 735.9 1 0 0 0 1 241.9 USA 1 2 0 0 3 872.5 1 0 0 0 1 391.2

China 2 0 0 0 2 5038.9 Italy 0 1 0 0 1 64.3

Sweden 0 1 0 0 1 49.0 Uzbekistan 1 0 0 0 1 60.8

Belgium 0 1 0 0 1 23.8 Austria 1 1 0 0 2 765.5 0 1 0 0 1 116.2 Holland 0 0 0 1 1 68.1 Canada 2 0 0 0 2 412.7 1 0 0 0 1 318.7 Pakistan 1 0 0 0 1 156.4

India 0 0 0 1 1 2437.9 Spain 0 0 1 0 1 105.6

Cypriot Egyptian 1 0 0 0 1 26840.0

Syrian-Ukraine - - - 1 1 1075.0 0 0 0 1 1 1075.0

Brazil 0 1 0 0 1 126.5 0 0 0 1 1 126.5 Saudi –Korean 1 - - - 1 240.8

Total 57 15 6 5 89 452420.0 11 2 0 2 15 321397.0 Source: SIA’s Database


66

Table No. (72): Total FDI Projects Licensed as per decree 8 according to economic activity And bulk of investment costs during (1991-2008) compared by 2008

state

Period ( 1991-2008) In 2008 Economic Activity

Total Costs (SP

Million)

Economic Activity Total

Costs (SP

Million) Industry Transport Agriculture Others Industry Transport Agriculture Others

Gulf States 38 6 4 4 52 184991.6 11 1 1 0 13 56783.4

Other Arab

Countries 45 30 8 3 86 34799.1 6 3 1 0 10 11940.6

Total Arab

Countries 83 36 12 7 138 219790.7 17 4 2 0 23 68724

Foreign Countries 57 15 7 10 89 452420 11 2 0 2 15 321397

Total 140 51 19 17 227 672210.7 28 6 2 2 38 390121

Source: SIA’s Database C. Executed Foreign Investment Projects: Syria witnessed big foreign investments during the last three years, Iranian Investments are estimated as $ /60/ millions, also Turkish investments surpassed $ /50/ millions, in various sectors.

Table No. (73): FDI Executed & Under-Construction Projects during the Period ( 2004-2008) $ millions.

Sector FDI

executed 2004

FDI executed

2005

FDI executed

2006

FDI executed

2007

FDI executed 2008 *

Oil Sector Investments 175 100 111 97 415 Tourist Sector Investments 60 300 225 385 490

Investments of decree 8 13 55 77 100 250 Insurance Sector

Investment 0 0 93 50 23

Licensed Private & Islamic Banks 45 45 64 130 28

Increased Capitals for Some Private Banks 0 0 30 30 22

Other Sectors’ Investments 45 83 59 265 54 Total 320 583 659 1242 1282

Source: Balance of Payments, Syrian Central Bank * Preliminary Statements

Table No. (74): FDI Executed & Under-Construction Projects during the Period ( 1991-2007)

No. of Executed

Projects Execution

Rate Investment Costs SP

Millions No. Work

Opportunities 117 52% 93489 14595



67

Chapter Six Suggestions & Recommendations, and Extracted Results

1) To continue improving investment climate and to complete the legislative system in this context, especially in settlement of disputes, in the field of trade and investment.

2) Supporting services propping investment, especially in the field of infrastructure such as : transport, communications, electricity and power.

3) Provide sufficient financing for feasibility studies, and before feasibility studies, for common Arab projects. Supporting establishment of common companies by providing finance sources for them on commercial bases.

4) To establish an Arab organization for finance ( AFC) to finance the private sector. 5) Marketing & Promotion for available investment opportunities: “The dollar which is spent on promotion & marketing gives better revenues than that is spent as

support or presented through tax impetus10.” 6) To join the International Union For Encouraging Investment ( WAIPA) where there are

currently 174 entity for supporting investment in developing countries, and developed countries as well, and they are members in this Union, which works as a forum to exchange expertise and practices.

7) Activating qualitative training on the methods and tools of investment encouraging: Human resources represent in the working investment the most important factor in succeeding

their works, they represent the front line in carrying out the policy of investment encouraging and in receiving investors and responding to their inquiries, there is also a great and urgent need for capacity building in the field of essential positions to encourage and market investment, depending on the professional skills in the field of works.

In order to form strategies and local tools for encouraging investment as per international standards, Syria needs a wide range operation to build capacities, of supporting programs ( EU- ANIMA – WAIPA, FIAS , UNDP, UNIDO, UNCTAD ). The importance of connecting those programs with certain objectives, well defined and subject to a follow-up mechanism, which will be part of its structure, thus the accumulated block resulting from these programs, concentrated on partial level, leads to the desired move within such a partial level, Syrian private sector could participate in this matter as a proof of its social responsibility, by offering proper support to Syrian Investment Agency SIA) in the field of consultancy services, and information & promotion, and market information and logistic matters, and consultancies…etc.

8) Active participation in regional programs: There is urgent need for Syria to strengthen its participation in the regional and international programs, such as the program of : OECD.ANIMA …etc., since the kind of communications and participations in typical practices, accumulated by these programs, is a quite valuable matter for speedy development of Syrian specialists.

Business Climate Aspects of Weakness: ý There are some administrative obstacles that are still suffered by investors to obtain

administrative licenses, which is caused by numerous procedures, relating to business before the investor and the existing circles of routine, which began to decrease gradually, the thing which increases costs, and consumes more time,

ý Weak financing of the industrial projects, for the financing which is presented by the specialized governmental banks requires additional exhausting conditions and guarantees, yet the private banks; their vigilance in this connection is still limited.

10 Professor Wells 2003


68

ý Weak registration mechanism in the social insurance for employees in general investment projects, to avoid evasion of investors from registration of their employees in the Social Insurance Organization or not telling their true wages. By organizing the work market in a better manner to get use of the capabilities of human resources, available, in order to control unemployment, and to make quick revision of Labor Law. As a result, Syria has followed a new track in thinking and coping with international practices, in the field of encouraging investment, and building an image showing the privileges of its position among those competing for attracting FDI, and here comes the importance of developing all promotion marketing materials. By releasing Syrian Investment Agency, there is a need to support currently available capacities .It is useful in this concern, to state the following points:

ý To empower the new investment agency to perform an integrated strategy ( connected to

national priorities, and owns a degree of sufficient flexibility to cope with changes according to requirements) its success depends on the gathering efforts of various governmental bodies, and civil organizations; there must be due cooperation between them to succeed its marketing plan, and to serve the one stop-shop ; in addition to continuous concentrated training, including the attendance of international activities.


69

Conclusion: This year’s report takes us to the fact that Syria today, is an important gate for investment, where it witnessed in recent years a qualitative move; we do not claim that we have a perfect investment environment ,as we have still big missions, required for enhancing investment environment ,relating to treatment of other aspects, that are still important and parallel ones such as: The regulatory, legal, and judicial structure, and to continue the administrative reform process, and simplifying the regulatory statutes, controlling bureaucracy, the thing which we are embarking on and which forms our orientation, in the coming stage, so that the progress attained by investment, shall not lose effect gradually. We are aware that any strategy for development depends on clear vision and continuous efforts. Thus the realization of our aspirations to increase investments, and to guarantee continuity of such increase to achieve economic development, motivates us to give the investment environment the ultimate care through enhancing all procedures that achieve this, and to follow up what has not been achieved. Investment occupies a distinguished position and attention in Tenth Five-Years Plan, with which the country’s development orientations are built ,and the bulk and rate of growth, that are aspired on the national level, or on the level of the economic activities. This interest reflects the seriousness of the society in rationalizing employment of its money whether of government or private, in order to increase the productive capabilities, and to absorb more unemployment, preparing proper channels for foreign funds in order to make them participate in pushing the local economy forward, through development & innovation process, led by The President of The Syrian Arab Republic HE Bashar Al-Assad. The noticed development which is observed by investment indicators for 2002, in the various sectors, whether with regard to number of projects or bulk of their investment costs, or job opportunities, that they make, in addition to the flow of FDI, all confirms the fact that the step taken by The Supreme Council For Investment, through its decisions and recommendations, such as the empowerments endowed to the Board of Directors of the SIA, helped to a far extent in simplification of procedures and to enhance the investment climate in Syria. We in The Syrian Investment Agency SIA, are more diligent today, than any other day in the past, to uphold our economy and to carry it forward towards our development objectives in what achieves the wealth to the country and the dignity of the citizens.


70

Appendix Table No. (75) Main Investors List for projects executed according to decree 8

their investment costs exceed Sp 0.5 milliard

No. Owner of the Project Objective Location Invest., Costs (SP Millions) Employees

1 National Sugar Co.

Refining Raw Sugar &

Extraction of White sugar

/Molas/

Homs 14866 2312

2 Imad Nouri Hmaishu & Partners

Reinforcement Steel Bars Lattakia 10334 100

3 Ahmed Ahmed Al-Swaidi

& Badee Al-Droubi & Partners

Cables Manufacture

Damascus suburb 5639 500

4 General Organization for Engineering Industries &

Iran Khoudrou

Assembling and

Manufacturing of cars


5 Mhd. Sulaiman Tlas,

Farzat & Patners

Hydrogenation of sunflower, cotton seeds and Soya oils

Homs 2689 100

6 Siba Iranian Co., &

Hmaishu Trading Co.

Assembling and

Manufacturing of cars

Homs 2427 606

7 Nael Daleel s/o Ahmed

Curtains and furniture Textile

Production

Aleppo 2247 46

8 Hama Chamber of Commerce & Industry

Oil, Milk Products Hama 2233 370

9 Fromagerie Bel M & Soupaic Co. MMM

French Co.

Processed Cheese (La Vache qui Rit,Regal

Pecon,Kiri)


10 Amir Asbet Sanjian Jewelry Raqqa 2136 35

11 Bassam Olabi Cotton & mixed yarns Aleppo 1967 126

12 Nestle Switzerland Milk products Damascus suburb 1804 118

13 Waseem Al-Ikhwan

& Rasha Hosami Plastic & PVC

pipes Homs 1758 135

14 Issam Anbouba Oil & Fodder, and Soap Homs 1753 254

15 Mhd. Labib Al-Ikhwan

Bags for Packing

Agricultural Products

Homs 1573 338


71

16 Ali Mhd. Ismael Juice Lattekia 1392 453

17 Bassam Olabi & Partner

Textile, Curtains & Clothes of cotton &

mixed yarn

Aleppo 1301 182

18 Mouhammad Mazen Daaboul Plastic Sheets Damascus

suburb 1265 50

19 Saeb Nahas & Partners Human Medicaments


20 Mouhammad Samer Al Aqad & Partners

Carbonated Water Packing

and drinks


21 Mouhammad &

Mawafak, Mhd., Momtaz Daaboul & Partners

Preparation of Aluminum & Steel sheets


22 Mhd. Mahran Al Baloshi Napkins Daraa 1039 45 23 Ali Ismael & Partners Juice Lattakia 930.6 157

24 Sabagh and Sharabati Ltd. ( Nour) Textile Aleppo 917.5 538

25 Tahseen Almabrouk AlAbd AlRazaq ( Saudi)

Iron bars and metal sections Lattakia 914.5 124

26 Mouhammad Sheikh Omar & Partners

Blended yarns polyester,

viscose Yarns Aleppo 8731 200

27 Issam s/o Kheir allah

Anbouba Soya, suflower

oils, butter Homs 868.3 113

28 Tarabishi & Bizra Pipes of Profiles

Aluminum

Damascus suburb 849.9 300

29 Issam Anbouba & Partners Bricks Homs 815.7 92

30 Wael Al Noqari Acrylic yarn Aleppo 788.1 168 31 Moustafa Oghlu (Turkish) Acrylic Yarn Aleppo 745.5 48

32 Mouhammad Maamoun and Mazen Al Malt

Metal Sections Cable holders


33 Balancia Trading Shareholding Co. Textile Aleppo 704.9 200

34 Khaldoun AlAkk Polyethelene Pipes Aleppo 688.1 150

35 Mouhammad Aref

Almahayni & Partners Irrigation

Equipment Damascus

suburb 686.0 200

36 Adham Mhd. Mahameed CDROM Daraa 685.2 125 37 Ibrahim Kurdi Oil & Ghee Hama 679.6 78

38 Mahmoud Mhd. Zoubi &

Partner

Human Medicine and

Vegetarian


39 Walid Tabaa & Partners

(German & Arab) Polyester Damascus suburb 674.1 318

40 Mahmoud Shabariq &

Brothers Ind., Yarn Idleb 660.3 78

41 Mhd. Aljarah Aluminum Damascus 658.6 200


72

suburb 42 Mostafa Mosli Kurdi Oil Hama 658.1 65

43 Vimpex Austrian co. Rehabilitation

Paper Machines

Deir Ezour 649.2 73

44 Jamal Eddin Qambaria

&Hassan Al Dibs Sanitary tissues

from paper Damascus

suburb 633.970 100

45 Abdul Aziz Dandal Ind. Textile Raqqa 627.9 38

46 Bakri Farwati Macaroni & Alcohol Aleppo 627.2 335

47 Khaled Olabi Polyester Yarn Aleppo 620.3 99

48 Mohamed Badr & Ryad Toama & Partners

Glycerin & Soap


49 Mhd. Alsheikh Taha & Partners

Colored fossilized glass Aleppo 613.0 90

50 Monir Nahas s/o Mostafa

& Partners Polyster Yarn Aleppo 609.4 125

51 Nizar Al Asaad & Habib

Baitnjani &Partners Oil, Ghee Tartous 594.6 146

52 Hassan Hasan Hajjar &

Partners Acrylic Yarn Damascus suburb 587.8 327

53 Yousef Aswad & Partners

Pipes & reservoirs

tempered by fiberglass

Aleppo 585.1 66

54 Hani Kamil Azoz Formica and fibers Panels Aleppo 567.8 125

55 Al Matin & Al Khorafi Kuwaiti Co. Plastic P.E.T. Homs 547.9 60

56 Shiraz Yirwant Tafnakji Reinforced Steel Aleppo 537.8 200

57 Shihada Salah Eddin Juice Swaida 530.0 63 58 Abdulla Jarbou Polyester Yarn Aleppo 508.4 61 59

Naela Karbouj Synthetic Yarn

and ginned cotton

Aleppo 507.4 44

60 Mostafa AlFakhouri

Chicken production and

pgf Hama 503.7 114

61 Haitham Soubhi Joud Household Appliances Lattakia 503.5 140

62 Monzer Haj Maf Cartoon Boxes Damascus suburb 502.1 49

63 Wahib Kamil Maree & Partner Iron bars Tartous 500.3 107


73

Table No. (76) Arab & Intl., Pacts still valid Arab Pacts For Investment

Pact, Law Endorsement Date Unified Pact to Invest Arab Capitals in Arab Countries. 27 22/7/1986

Pact, Legislative decree Endorsement Date

Encouragement of investment and transference of capitals 44 25/7/2004

Pact for dispute settlement in Arab countries 43 20/7/2004

State Signature Date Endorsement Date Concluding Date

Kuwait 16/8/2001 Law No.12 on 26/2/2002 Became valid as from 23/3/2004

Bahrain 20/9/2000 Legislative decree No.4 on 1/4/2001

Valid from 18/12/2001

UAE 26/11/97 Law No. 14 on 4/8/1998 Valid from 10/1/2001 Qatar 24/10/2003 Law No. 7 on 1/4/2004 Valid from 27/4/2006 Oman 14/9/2005 Law No. 23 on 24/4/2006 Valid from 1/6/2006

Jordan 10/8/2001 Legislative decree 12 on 9/2/2002

Became valid as from 11/5/2002

Yemen 9/10/1996 Law No. 18 on 4/8/1998 Valid from 22/7/2005

Lebanon 12/1/1997 Law No. 15 on 4/8/1998 Became valid from 15/9/1999

Iraq 29/8/2002 Endorsed Egypt 28/5/1997 Law No. 16 on 4/8/1998 Valid from 5/10/1998

Tunisia 23/1/2001 Law No. 11 on 26/2/2002 Valid from 12/3/2003

Algeria 14/9/1997 Legislative decree No.23 on 9/8/2000

Valid from 18/6/2002

Morocco 23/10/2001 Law No. 37 on 20/5/2002 Valid from 29/3/2003 Libya 2/8/1993 Law No. 7 on 26/5/1993 Valid from 7/10/1995 Sudan 7/1/2000 Legislative decree 3 on 1/4/2001 Valid from 1/9/2001

A. Investment Pacts: State Signature Date Endorsement Deed and Date Agreement Status

Senegal 14/11/1975 Decree No. 589 on 3/3/1976 Valid USA 9/8/1976 Decree No. 33 on 1/8/1977 Valid

Switzerland 22/6/1977 Decree No. 24 on 12/7/1978 Valid until renewal Germany 2/8/1977 Decree No. 34 on 11/9/1978 Valid

France 28/11/1977 Decree No. 30 on 31/7/1978 Valid Pakistan 25/4/1996 Law No. 5 on 2/7/1997 Valid from 4/11/1977

China 9/12/1996 Law No. 10 on 4/8/1998 Valid from 1/10/1999 Indonesia 27/6/1997 Law No.1 9 on 31/12/1997 Valid from 20/2/2000

Iran 5/2/1998 Decree No. 3 on 11/2/1998 Valid from 16/11/2005

Bella Russia 11/3/1998 Decree No. 8 on 4/8/1998 Valid from 1998

Bulgaria 21/5/2000 Decree No. 10 on 12/5/2001 Valid from 10/11/2001

Italy 20/2/2002 Decree No. 43 on 13/7/2002 Valid from 13/11/2003


74

Ukraine 21/4/2002 Decree No. 56 on 8/9/2003 Valid from 16/3/2003 Greece 23/2/2003 Decree No. 39 on 27/7/2003 Valid from 27/2/2004

Spain 20/10/2003 Decree No. 19 on 12/4/2004 Valid from 14/12/2004

Turkey 6/1/2004 Decree No. 40 on 1/7/2004 Valid from 3/1/2006 Russia 27/1/2005 Law No. 21 on 16/6/2005 Valid from 13/7/2008

Democratic Korea 14/5/2006 Law No. 51 on 5/12/2006 Valid from

20/12/2006 Federal Nigeria

10/12/2006 Law No. 14 on 17/6/2007 Under Procedures to be Valid

Tajikistan 10/2/2007 Decree No. 18 on 2/4/2008 Valid from 30/5/2008

Cyprus 10/6/2006 - Under Procedures to be Valid

India 18/6/2008 Decree No. 58 on 23/9/2008 Valid from 22/1/2009

Romania - Decree No. 61 on 28/9/2008 Under Procedures to be endorsed

Malaysia 9/1/2009 - Under Procedures to be endorsed

Czech Republic 20/11/2008 - Under Procedures to

be endorsed

Slovakia 18/2/2008 - Under Procedures to be endorsed

B. Trade Pacts:

State Signature Date Endorsement Deed & Date Status Sri Lanka 9/10/1966 Decree No. 29 on 19/10/1966 Valid Pakistan 11/8/1969 Decree No. 342 on 23/11/1969 Valid Tanzania 12/2/1974 Decree No. 166 on 15/3/1974 Valid from 10/8/1975 Indonesia 18/3/1976 Decree No. 1220 on 9/7/1977 Valid

India 20/4/1978 Decree No. 1570 on 4/12/1978 Valid from 5/3/1979 Guinea 22/1/1979 Decree No. 1209 on 23/1/1979 Valid Albania 17/6/1979 Decree No. 1252 on 8/2/1980 - Niger 26/6/1980 Decree No. 2661 on 22/12/1980 Valid

Democratic Korea 28/6/1982 Law No. 5 on 3/2/1983 Valid

Argentina 6/9/1989 Decree No. 127 on 8/11/1989 Valid from 21/6/1993 Chile 27/2/1990 Decree No. 12 on 24/5/1990 Valid from 21/4/1992

Turkmenistan 21/3/1992 - - Azerbaijan 28/3/1992 Decree No. 10 on 11/7/1992 Valid Armenia 30/3/1992 Decree No. 7 on 11/7/1992 Valid

Vietnam 12/5/1994 Decree No. 12 on 27/6/1994 Valid from 26/10/1994

Pakistan 25/4/1996 Decree No. 172 on 15/6/1997 Valid Iran 21/8/1996 Decree No. 241 on 10/11/1997 Valid from 10/4/2002

Cuba 28/10/1998 Decree on 19/10/2000 Valid Tajikistan 29/3/1992 Decree No. 11 on 11/7/1992 Valid from 16/9/1993 Ukraine 21/4/2002 Decree No. 56 on 8/9/2003 Valid from 16/3/2003 Malaysia 18/8/2003 Decree No. 49 on 15/8/2004 Valid from 15/8/2004

Source: MOE&T * EU countries have trade pact in 1977


75

C. Economic Commercial & Technical Cooperation Pacts

State Signature Date Endorsement Deed Status Russia 15/4/1993 Law No. 11 on 22/6/1993 Valid from 13/7/1993

Armenia 30/4/1995 Decree No. 177 on 15/6/2002 Valid Bella Russia 11/3/1998 Decree No. 8 on 4/8/1998 Valid from 1998

Cuba 28/10/1998 Decree No. 142 on 9/5/2002 valid

China 11/1/2001 Decree No. 40 on 26/8/2001 Valid from 18/10/2001

Ukraine 21/4/2002 Decree No. 8 on 25/1/2003 Valid from 16/3/2003 Venezuela 11/1/2007 Decree No. 2 on 11/2/2007 Under amendment

Federal Nigeria

10/12/2006 Law No. 14 on 17/6/2007 Under completing validity

D. General Table of Pacts Under Study and Negotiations:

State Subject Remarks South Africa Mutual protection of investments

South Africa Economuc commercial Technical Cooperation Pact

Senegal Mutual protection of investments With Senegal for reply Guyana Trade Agreement Project Under discussion Brunei Mutual protection of investments Brunei for reply Finland Mutual protection of investments With Finland for Reply Belgium Mutual protection of investments Singed with Initials Austria Mutual protection of investments Final form agreed Japan Mutual protection of investments With Japanese side for reply

Albania Mutual protection of investments Albanian side had the two projects of the two pact

Kazakhstan Mutual protection of investments Waiting Kazakhstan reply Granada Trade Agreement Project With Granada for reply Sweden Mutual protection of investments Sweden will reply Norway Mutual protection of investments Norway for Reply Croatia Mutual protection of investments Croatia for reply

Denmark Mutual protection of investments Under study Cuba Mutual protection of investments Under study

Georgia Mutual protection of investments Under study Lithuania Mutual protection of investments Under study

Bosnia Mutual protection of investments Bosnia will reply Turkmenistan Mutual protection of investments Turkmenistan will reply

Holland Mutual protection of investments Holland will reply Vietnam Mutual protection of investments Vietnam will reply Hungary Economic Cooperation Project Signed by initials

Bulgaria Economic Cooperation Project Under achieving the final form

Source: MOE& Trade. E. Free Trade & Preference Pacts:

- Partnership Pact establishing for a Free Zone signed with Turkey on 22/12/2004 in Damascus , endorsed under decree No. 37 on 4/5/2005 became valid from 1/1/2007.

- Preference pact signed with Iran on 23/2/2006 in Damascus endorsed under decree No. 13 on 3/11/2008


76

- Partnership Pact, establishing for a free trade zone with the EU, has been singed by Initials, on 19/10/2004. and the revised edition has been signed in Damascus on 14/12/2008.

- There is a suggestion to sign a preference agreement with Pakistan. - There is a suggestion to sign a free trade agreement with Ukraine. - Announcement of good intentions has been signed with Kazakhstan on 14/8/2008.

Protocol Investment Cooperation Signed Between SIA and Other Countries

Country Signing Party Signature Date Syria Other Country

Tunisia Ministry of Economy and Trade Foreign Investment Promotion Agency 23/1/2001

Jordan Syrian Investment Agency/ SIA/ Jordan Investment Board 29/6/2006 Libya Ministry of Commerce and Trade Investment Promotion Agency 10/5/2007 Egypt Ministry of Commerce and Trade Ministry of Trade & Industry 14/12/2006

Malaysia Syria’s Ambassador to Malaysia Malaysian Industrial Development Authority 3/6/2007

Kuwait Syrian Investment Agency / SIA/ The Arab Investment &Export credit corporation 12/2/2007

Sudan Ministry of Commerce and Trade Investment Authority 31/5/2001

Kuwait Syrian Investment Agency/ SIA/ The Arab Investment & Export Credit Guarantee Corporation 18/2/2008

KSA Syrian Investment Agency/ SIA/ The Islamic Corporation for the Insurance of Investment and Export Credit

16/11/2008

Cyprus Syrian Investment Agency / SIA/ Cypriot Investment Promotion Agency 9/6/2008



77

List of Addresses Of Main Governmental Entities & Ministries

Syrian Prime Ministry Damascus – Kafar Sousseh

Tel. : 2/1/2226000 Fax : 2237842

www.youropinion.gov.net

Syrian Investment Agency Tel. : 2062

Tel. : + 963114412039 Fax : + 963114428124

E-mail: [email protected] Investment Chart Site:

www.syriainvestmentmap.org SIA Site: www.investinsyria.org

Ministry of Industry

Damascus – Maysaloun Str. P.O.Box: 12835 Tel. : 2231834 – 2231845

Fax : 2231097 Ministry’s Site: www.syrianindustry.org

Ministry of Information Damascus – Meza Autostrade – Dar Al Baath

Tel. : 6624220 / 6624217 Fax : 6665166

Website: www.moi.gov.sy

Ministry of Foreign Affairs Damascus : Muhajreen – Shoura

Tel. : 3331200/1/2/3 Fax : 3327620

Email [email protected]

Ministry of Interior Damascus : Marja

Tel. : 2220101 / 2220102 Fax : 2223428

E-mail: [email protected]

Ministry of Electricity Damascus : Quatli Str.,P.O.Box (4900)

Tel. : 2119934 / 6/ 5 Fax : 2227736


Ministry of Petroleum & Mineral Resources Damascus : Adawi – P.O.Box ( 40 )

Tel. : 4445610-4455972 Fax : 4457786

Website: www.moepmr-sy.org E-mail: [email protected]

Ministry of Economy & Trade

Damascus - Maysaloun Str. Tel. : 2213513 / 5/ 4

Fax : 2225695 Website: www.syrecon.org E-mail: [email protected]

Ministry of Social Affairs & Labor Damascus : Yousif Al-Azma

Tel. : 2225948 - 2210355 Fax : 2247499

Ministry of Agriculture & Agrarian Reform Damascus : Hijaz Square – Jabri Str.

Tel. : 2213613 / 4 Fax : 2244078

Website: http: www.syrianagriculture.org E-mail: [email protected]

Ministry of Touirism Damascus – Quwatli Str. Tel. : 2237940 / 2210122

Fax : 2242646 Website: www.syriatourism.org E-mail: [email protected]

Ministry of Transport Damascus : Abu Rummana.

Tel. : 5447101 / 5440078 Fax : 5426477

Website: www.min-trans.net E-mail: [email protected]

Ministry of Housing & Facilities Damascus – Yousef Al-Azma Square.

Tel. : 2217570 / 1/ 2 Fax : 221757


Ministry of Finance Damascus : Al-Tahreer – P.O.Box: (13136)

Tel. : 2211300 / 2216300 / 2 /3

Syrian Chambers of Commerce Federation Damascus – Mosa Bin Nusair Str.

Tel. : 3311504 / 3337344+

http://www.youropinion.gov.net/

mailto:[email protected]

http://www.syriainvestmentmap.org/

http://www.investinsyria.org/

http://www.syrianindustry/








78

Fax : 2224701 E-mail: [email protected]

Fax : 3331127+ E-mail: [email protected]

Website: www.fedcommsyr.org Ministry of Local Administration

Damascus : Al-Mohafaza Square.

Tel. : 2317854 - 2317911 Fax : 2316921

Website: www.mlae-sy.org

Adra Industrial City Damascus Suburb: Adra Tel. : 5850018 - 5850024

Website: www.aic.org

Hisia Industrial City Homs – Hisia

Tel. : +96331536000718 Fax: 5360003

Website: www.ic-homs.sy E-mail: [email protected]

Sheikh Najar Industrial City Aleppo – Sheikh Najar

Tel. : 476901-+963214769011 Fax: 2272479

Website: www.aic.org.sy E-mail: [email protected]

Syrian Central Bank Damascus – Saba Bahrat Square

Tel. : 2212642 – 2216802 Fax : 2248329


Central Statistics Bureau Damascus – Abu Rummana – Abdul Malek

Bin Marwan Str. Tel. : 3335830 Fax: 3322292

State Planning Commission Damascus – Bin Al Nafis Tel.: 5161024 – 5161035

Fax : 5161011 Website: www.planning.gov.sy

UNDP Damascus – Mezza – Western Villas

Tel. : 00963116129811 Fax: 096311611451

Website: www.undp.org



http://www.mlae-sy.org/

http://www.aic.org/

http://www.ic-homs.sy/



http://www.planning.gov.sy/

http://www.undp.org/


79

Guide of The Most Important Syrian Electronic Websites

Syrian Investment Agency / SIA / www.investinsyria.org Ministry of Irrigation www.irrigation-sy.com Ministry of Industry www.syrianindustry.org

Ministry of Agriculture www.syrian-agriculture.org Ministry of Interior www.civilaffair-moi.gov.sy-sy.org

Ministry of Expatriates www.ministryofexpatriates.gov.sy Ministry of Tourism www.syriatourism.org Ministry of Culture www.culture-sy.org

Ministry of Education www.syrianeducation.org Ministry of Oil & Mineral Resources www.mopmr-sy.org

Ministry of Transport www.min-trans.net Ministry of Information www.moi.gov.sy

Ministry of Communications & Tech., www.moct.gov.sy Ministry of Health www.moh.gov.sy

Ministry of Finance www.syriafinance.org Syrian Chambers of Commerce Federation www.fedcommsyr.org

Damascus Chamber of Commerce www.dcc-sy.com Damascus Chamber of Commerce www.dci-syria.org

Aleppo Chamber of Commerce www.aleppochamber.com Lattakia Chamber of Commerce www.chamberlattakia.com

Aleppo Chamber of Industry www.aleppo-coi.org Homs Chamber of Commerce & Industry www.homschamber.org Daraa Chamber of Commerce & Industry www.daraacci.org

Central Bank www.banquecentrale.gov.sy Real Estate Bank www.realestatebank-sy.com Commercial Bank www.cbs-bank.com

Syrian Petroleum Company ( SPC) www.spc-sy.com Syrian Oil Products Storage & Distribution Co. www.mahrukat.gov.sy

General Housing Est. www.ghe-syria.com General Company For Tartous Port www.tartousport.com

http://www.investinsyria.org/

http://www.irrigation-sy.com/

http://www.syrianindustry.org/

http://www.syrian-agriculture.org/

http://www.civilaffair-moi.gov.sy-sy.org/

http://www.syriatourism.org/

http://www.culture-sy.org/

http://www.syrianeducation.org/

http://www.mopmr-sy.org/

http://www.min-trans.net/

http://www.moct.gov.sy/

http://www.moh.gov.sy/

http://www.syriafinance.org/

http://www.fedcommsyr.org/

http://www.dcc-sy.com/

http://www.dci-syria.org/

http://www.aleppochamber.com/

http://www.chamberlattakia.com/

http://www.aleppo-coi.org/

http://www.homschamber.org/

http://www.daraacci.org/

http://www.banquecentrale.gov.sy/

http://www.realestatebank-sy.com/

http://www.cbs-bank.com/

http://www.spc-sy.com/

http://www.mahrukat.gov.sy/

http://www.ghe-syria.com/

http://www.tartousport.com/


80

General Indications For Syrian Arab Republic Indicator 2005 2006 2007 2008 Inhabitants ( Millions) 18356 18941 19.405 19880 Gross Domestic Product ( GDP) / fixed prices (SP Millions)

1151462 1211339 1288001 1378321

Average Per Capita (P.C) fixed prices ( SP) 62729 63973 66374 69332 GDP , current prices ( SP Millions) 1493766 1698480 2019810 2268237 Average P.C., current prices ( SP) 81378 89672 104087 114096

Urban Inhabitants’ Rate ( %) 53.5 53.5 53.5 53.5 Average Inhabitants Growth % 2.45 2.45 2.45 2.45 Average Family Members ( individual) 5.5 5.4 5.3 5.2 Inhabitants’ Density ( inhabitant) 99 102 104 107

Area ( Km2 ) 185.180 Capital Damascus Number of Governorates 14 Formal Language Arabic National Currency Syrian Pound Regime Republican Weekly Holiday Friday + Saturday


81

Questions & Answers Regarding investment decree No.8 for the year 2007 • Is the Non-Syrian Investor allowed to own and rent lands and real estates required for erection

of his project? - Yes the non-Syrian nvestor allowed to own and rent lands and real estates required for erection

and expansion of his project even if the optimum area exceeds the allowed area in valid laws and regulations ( Item 2).

• Does the projects enjoy the effect of preventing confiscation, or abolishment of ownership, or limiting handling with land?

- Yes projects have the privilege of preventing confiscation, or abolishment of ownership, or limiting handling with land, unless the procedure is taken for public benefit, provided that prompt compensation is paid to the investor, equal to the current value, prior to detachment of ownership, in a transferable currency, as for foreign capital, with the maintaining of stipulations of the Law of Public Money Collection No. (341) for the year 1956. Confiscation of the project could never be carried out except with the force of a legal sentence ( Item 3 ).

• Could the Non-Syrian Investor obtain work and residence permits? - Yes, the non-Syrian investor can obtain work and residence permits for him and his family,

during the whole period of execution and operation of the project ( Item 4). • Can the Investor re-transfer his share of the project in a transferable currency outside Syria?

- Yes, the Investor can re-transfer his share of the project in a transferable currency outside Syria ( Item 5).

• Can the Investor transfer the revenues and profits entailed by foreign capital? - Yes, the Investor transfer the revenues and profits entailed by foreign capital outside the

country, and in a transferable currency. He also has the right to re-transfer the external money abroad, after elapse of /6/ months, as from entering the country, in case some difficulties, prevented him from investment, due to circumstances caused by force majure ; experts, technicians and employees of Arab or foreign citizenship, working in a project, are allowed to transfer ( 50%) of their net wages, salaries, and remunerations and (100%) of the end of service remuneration, outside the country in a transferable currency ( Item 5).

• Is it allowed to enter the private equipment, for fixation of project assets, and to take them abroad again?

- Yes, the Investor is allowed to enter the private equipment, for fixation of project assets, and to take them abroad again ( Item 5).

• Does the Investor have the right to insure his project? - Yes, the stipulations of international, mutual, and multi-party Pacts & Conventions relating to

investment, and guarantee of investment, valid in Syria, signed with other countries or with Arab and international organizations, are taken into consideration, and the Investor has full choice to insure his project, with any insurance company or organization, allowed and licensed to operate in Syria ( Item 6).

• How could disputes be settled in case they arise?

- Disputes relating to investment between the investor and the Syrian public entities and organizations shall be settled amicably. In case this proves impossible within the period of three months, as form submitting a written notice, for amicable settlement by one party of the dispute, anyone of the two parties will have the right to refer to one of the following measures:

1. Arbitration. 2. Specialized Syrian Court. 3. Arab investment court. 4. Investment guarantee and protection Pact, signed between Syria and the country of the

investor, or Arab region or state. All disputes will be looked after, by the specialized court as soon as possible. ( Item 7).


82

Investment Privileges & Impetus • What are the sectors and activities that get use of the privileges and guarantees of investment

decree? - The Sectors are:

1- Agricultural projects and land reclamation projects. 2- Industrial projects. 3- Transport projects. 4- Communications & Technology Projects. 5- Environmental Projects. 6- Utilities Projects. 7- Electrical Power & Petroleum, and Mineral Resources projects. 8- Any other projects, The Supreme Council For Investment would decide their inclusion as

per investment decree. ( Item 8). • Could the projects import their prerequisites?

- Yes the projects import all their prerequisites, without being restricted by the force of cessation, prevention or restriction of imports, and the direct import from country of origin, and currency legislations ( Item 9).

• What are the customs exemptions, that the project will get use of ? - Imported assets are exempted from customs charges ( machinery, equipment, and facilities

used in the production process, and the service means of transport, other than tourist ones) (Item 9).

• What are the developmental investment areas in Syria ? - Investment developmental areas defined in two: 1- The first developmental area, including the following governorates: ( Damascus –

Damascus suburb – Aleppo – Lattakia – Tartous – Homs – Hama) 2- The second developmental area, including the following governorates: ( Daraa – Swaida –

Qunaitra – Deir Ezour – Raqa – Hasakah – Idleb). 3- The minimum value of assets in the 1st., investment area SP /50 / Millions, and in the

2nd., area SP /30/ Millions. • What are the tax exemptions that the project will get use of ?

- The Projects as per decree 8 are endowed a dynamic tax exemption, for the whole life of the project; for the decree No. 8 for the year 2007 stipulated that for encouragement of investment, the included projects to be subject to according to Legislative decree No. /51/ for the year 2006 to dynamic income tax deduction.

* The highest tax rate in its highest chunks reaches to ( 28%) on net profits. * The shareholding companies that set forth their shares for public subscription, in a rate no less than ( 50%), its tax rate is ( 14%). As for the projects included in the Investment decree 8 the highest tax rate for them is ( 22%) and this rate is decreased according to the following bases:

Two degrees for industrial enterprises in the governorates of ( Raqa – Deir Ezour – Hasaka – Idleb – Swaida – Daraa – Qunaitra ).

One degree for industrial enerprises that use (25) employees and over, registered duly in the social insurance.

Two degrees for industrial enterprises using (75) employees, registered duly in social insurance. Three degrees for industrial installations using (150) employees, registered duly in Social Insurance. One degree for installations erected within Industrial Cities. Two degrees for licensed industrial projects under stipulations ofdecreeNo. /8/ for the year 2007, in

the two industrial cities of Hisia, Deir Ezour.


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Two degrees for projects of Power Generation Stations, Green Energy Projects, Fertilizers Factories.

Two degrees for the availability of one of the following bases: * Industrial projects depending in its production on local raw materials. * Industrial projects that save energy. * Industrial projects that use tools, means, machinery and equipment, that are friendly to environment, and prevents environmental pollution. * Industrial projects that export ( 50%) percent of their production.

Two degrees for licensed industrial projects under decree No. /8/ for the year 2007 in the eastern region, which include the governorates of ( Raqa, Deir Ezour, Hasaka ). • Do the Projects included in Law No. /10/ for 1991and amendments continue benefit from all

exemptions and privileges endowed to them ? - Yes the Projects included in Law No. /10/ for 1991and amendments continue benefit from all

exemptions and privileges endowed to them, until the end of exemption period ( Item 13).

third annual investment report for the year /2008/sia.gov.sy/userfiles/reports/sia_report...

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