7/29/2019 Investment Environment of SYRIA

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International Business: Investment Environment of SYRIASubmitted to: Dr. Archana PillaiSubmitter by: Harshal Gandhi

Nishant Rama Rao

Sr.

No.

Particular Detail

1

Free Trade

Agreement

/ Most

Favored

Nation

Syria had developed regional FTA & MFN agreement, which have been largely suspended as trading partners seek toexpress disapproval of the Syrian regimes violence against protesters

GAFTA-Greater Arab Free Trade Agreement - January 2005 - customs duties were eliminated between Syria and allother members of GAFTA (17 Countries)

TurkeyJanuary 2007 - compromised by retaliatory steps by both parties, given Turkeys reaction to the Asad regimesviolent response to the demonstrations

Syria is a signatory to free trade agreements with Jordan, India, Belarus, and Slovakia.In 2004 Syria and the EU initialed an Association Agreement; the ratification process had not been finalized as of March

2011, and the EU withdrew its offer following the regimes crackdown on opposition and imposition of EU sanctions.

2

Domestic

Laws

related to

Trade &

Foreign

Investment

Syria has profoundly changed its legislative and legal base in order to attract foreign investment.The country has set up 8 free zones which allow different production activities and services in the industrial zones.

GOFZ (General Organization of Free Zone) has approved 4 more such plans

The government has also favored the development of industrial cities. It has created four new towns where an industrialcomplex is back to back with a residential area. These centers are intended to occupy the space between ancient andtraditional urban areas.

Major amendments made in 1975Investment Law No 10

The exemption from duties and taxes on the import of a business's requirements in setting up and running the projectTax relief on the operations of joint stock companies for a period of 7 years, other companies up to 5 yearsThe right to open an account in foreign currency at the Commercial Bank of SyriaThe right to transfer in foreign currency out of Syria the net capital initially invested in the projectThe annual transfer of profits and revenues in foreign currencyThe transfer abroad, in foreign currency, of 50% of expatriate workers' earnings and 100% of any compensation awarded

at the end of their servicesProblems with the law

limited periods of tax exemptionProject Differentiation: The offering of identical incentives to all types of projectsGeographical Differentiation: Same incentives everywhere so 56% of the projects are based on Damascus regionLimited period of tax exemption

7/29/2019 Investment Environment of SYRIA

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3FDI &

Drawbacks

Syria is committed to gradually opening its economy, moving from a closed and centralized economy to a modelapproximating market economy.

In a particularly difficult regional context, the country is trying to set up the mechanism of a market economy in order toregain the trust of foreign investors.

The Syrian economic-legal corpus has undergone extensive changes over the past decade.Structural reforms such as the renovation of the Commercial Code (2007), the Maritime Code (2008), the Finance Act

(2004) or the Banking Act of 2004 helped to phase out the model of planned economy, which has been in force overdecades.

No clear policy about the limit of the FDI is foundDrawbacks

The absence of any refinancing instrument for Syrian banks and the explosion of credit in the private sectorA tax avoidance that is very difficult to repress and that undermines income and fiscal reforms;The lack of diversification in investments, especially targeting the real estate sector (high quality residences, hotel

complexes or shopping centers).

FDI drastically declined after massive unrest

4Trade

Statistics

Syria claimed a boom in non-oil exports prior to mid-2011, but its trade numbers are notoriously inaccurate and out-of-dateNot highly dependent on one country to which it exports. (Iraq-18.85%, Germany-12.26%, Lebanon-9.69%, Italy-8.87%,

France-7.58%)Highly dependent on crude oil (30.33%) for export so it is riskier as their production is getting lower every yearImport product range is highly distributed

5

globalEDG

E Blog:

Illegal

Internation

al Trade inAntiquities

(the only

blog about

Syria on

the site)

The blog talks about how antiques of Syria are contributing hugely to the illegal trafficking of antiques in internationalmarkets. Artifacts are stolen & sold in international market for monetary gain, preservation of heritage has been verydifficult due to mismanagement, inefficiency of the central government to preserve them, due to ongoing conflict, Syriahas experienced devastation of several ancient sites, and many ancient sites are either littered or have bullet shells

because of bomb raids and many reasons.2 major questions raised in the blog are how will future generation ever come to know what really existed? And Since,

most frequent evidence presented in property/land rights in international courts are ancient facts, it should begovernments best interest to protect indigenous ruins, which government is lacking; why?

The government should take best interest in protecting antiques & hence some laws should be introduced which willhelp in saving antiques & bring down illegal trafficking of antiques in international market for monetary gain.

References:http://globaledge.msu.edu/countries/syriahttp://www.globaltrade.net/international-trade-import-exports/m/c/Syria.htmlhttp://globaledge.msu.edu/blog/post/1498/illegal-international-trade-in-antiquities

http://globaledge.msu.edu/blog/post/1498/illegal-international-trade-in-antiquitieshttp://globaledge.msu.edu/blog/post/1498/illegal-international-trade-in-antiquitieshttp://globaledge.msu.edu/blog/post/1498/illegal-international-trade-in-antiquitieshttp://globaledge.msu.edu/blog/post/1498/illegal-international-trade-in-antiquitieshttp://globaledge.msu.edu/blog/post/1498/illegal-international-trade-in-antiquitieshttp://globaledge.msu.edu/blog/post/1498/illegal-international-trade-in-antiquitieshttp://globaledge.msu.edu/countries/syriahttp://globaledge.msu.edu/countries/syriahttp://www.globaltrade.net/international-trade-import-exports/m/c/Syria.htmlhttp://www.globaltrade.net/international-trade-import-exports/m/c/Syria.htmlhttp://globaledge.msu.edu/blog/post/1498/illegal-international-trade-in-antiquitieshttp://globaledge.msu.edu/blog/post/1498/illegal-international-trade-in-antiquitieshttp://globaledge.msu.edu/blog/post/1498/illegal-international-trade-in-antiquitieshttp://www.globaltrade.net/international-trade-import-exports/m/c/Syria.htmlhttp://globaledge.msu.edu/countries/syriahttp://globaledge.msu.edu/blog/post/1498/illegal-international-trade-in-antiquitieshttp://globaledge.msu.edu/blog/post/1498/illegal-international-trade-in-antiquitieshttp://globaledge.msu.edu/blog/post/1498/illegal-international-trade-in-antiquitieshttp://globaledge.msu.edu/blog/post/1498/illegal-international-trade-in-antiquitieshttp://globaledge.msu.edu/blog/post/1498/illegal-international-trade-in-antiquitieshttp://globaledge.msu.edu/blog/post/1498/illegal-international-trade-in-antiquities