The Premier, President of the Higher Investment Council,
Pursuant to provisions of Article 38, Law No. 10 issued on 4 May 1991,
Legislative Decree No.7 issued on 3 May 2000,
Recommendation of the Economic Committee, in its session No. 53 held on 12 September 2001,
The decision of the Higher Investment Council in its session No.1 held on 1 February 2001, issues the following Executive Instructions:

Definitions

Article1

The following terms shall have the meaning shown against each of them:

Beneficiaries From Law Provisions

Article2

Beneficiaries from the provisions of the Investment Law are economic and social development projects approved by the Council, established with a local or foreign capital or both of them by natural or legal persons shown hereunder:

1.        Syrian Arab nationals residing in the Syrian Arab Republic or those of same category.

2.        Expatriate Syrian Arab nationals whether those retaining their original nationality or holding the nationality of a foreign country.

3.        Citizens of Arab and foreign countries.

4.        Legal persons licensed by the Council to launch projects under the provisions of Investment Law.

Fields of Investment

Article3

Economic and social development projects stipulated in article three of this Law mean those projects initiated under its provisions in the following fields:

1.        Agricultural projects whether plantation or animal ones or those subsequent or complementary thereto of works or activities as the construction of protected houses, refrigeration stores, installations for the sorting, packing and packaging of fruits and vegetables (whether those items are products or non-products of the project).

2.        Projects for the manufacturing of agricultural products (plants or animals).

3.        Industrial projects allowable to be established by the private and joint sectors.

4.        Transport projects.

5.        Projects approved by the Council in fields other than those mentioned above.

Principles and controls accredited by the Council in the issue of its approval to

cover the projects under Investment Law

Article4

The Council shall decide the approval of covering the project under the Investment Law in light of the following considerations:

·         Project's consistency with the objectives of the State development plan.

·         The extent of its utilization of the available local resources, its contribution to the development of the national product and increase of job opportunities.

·         Its capabilities in field of increasing exports and rationalization of imports.

·         Its utilization of machinery and modern technologies appropriate for the needs of national economy.

·         Value of its fixed assets employed (machinery, tools, appliances, equipment, non-tourist transport means and all production means imported in a final non-temporary manner) to be used exclusively in the project must not be less than ten million S.P. or its equivalent in a foreign currency evaluated at the current exchange rate in neighboring countries according to the foreign exchange rates bulletin issued by the Commercial Bank of Syria. The cabinet shall have the right to amend stated minimum by a decision issued by the Premier.

It must be observed that the machinery, tools, appliances, sets, equipment, non-tourist transport means and all production means imported for the established projects under the Investment Law must be new, not second hand or renovated. Exempted from this is the public sector's contribution and its institutions which may be in cash or in kind in consideration of real estates, appliances, equipment or new, or second hand, machinery

Higher Council For Investment

Article5

Council's Meetings:

A.       The Council shall hold its meetings regularly once every two months at least upon a call from its president.

B.       Call for the meeting shall be addressed at least three days prior to the defined date. Agenda of the meeting, papers and documents of the topics of discussion shall be attached to the call.

C.       The Council meeting shall be legal in presence of the majority of members. Decisions shall be taken by majority of present members who have the voting right. When votes are equal, session President shall have the casting vote.

Article6

A.       The Council shall have right to form committees from its members to study certain topics or issues and give opinion on them to the Council. These committees may seek the assistance of experts and technical people they deem from the various state ministries and institutions and from private or joint sectors.

B.       The Council president shall invite those specialists and persons concerned to attended the council meetings in matters relevant to the topics presented to the Council without their having the voting right.

Article7

Council's Authorities:

The Council, as the higher reference for investment, shall undertake the following within the scope of its authorities:

A.       Look into requests submitted thereto by the Office to establish the project according to the form prepared by the competent authorities with all required documents namely the economic feasibility study.

o        The Council shall take its decision within thirty days as of the date of its submission from the competent body. Ministries, other concerned bodies and the concerned party shall be notified of the taken decision.

o        In case of approval, the council's decision shall particularly contain the following information:
Name of beneficiary - legal form of the project - project capital - objectives, type of production and production capacity - implementation period - investment costs - its foreign financing resources.
In case of refusal, the council decision shall be justified. However, the Council may reconsider in this case the investor's application where the concerned person submits new facts or a justification for the establishment of the project.

B.       Issue licenses for the institution of joint companies, stock companies and limited liability companies covered under paragraph A, article 6 of the Investment Law by a decision from the Premier, define the share percentage of the countries in the project capitals that take the form of joint companies (stock or limited liability), type of this contribution whether in kind, in cash or both of them.

C.       1. Approve drafts of the joint and holding companies articles of association set by founders in light of the provisions of paragraph "b" amended, Article 19 of the Investment Law in preparation for their issue by a decision from the Premier.
2. Look into the requests for applying the provision of amended paragraph "b" of Article 19 mentioned above to stock, limited liability companies rather than the joint ones established, or that will be established according to the Investment Law terms to implement projects licensed according thereto in light of their importance in terms of their projects objectives. Volume of capital or nationality of their founders and take the appropriate decision in this concern.

D.       Approve the assessment of the project foreign finance prepared by Investment Office in coordination with the two Ministries of Economy & Foreign Trade and Finance.

E.        1. License the Arab and foreign investor to own and lease land and real estates necessary for the establishment of investment projects thereon or expand them within the areas and leasing period proposed by the concerned body in light of the project objectives and its actual needs.
2. Permit investors of Syrian Arab nationals and other citizens of Arab and foreign countries to exceed the ownership ceiling specified in the laws and rules in force including Agricultural Reclamation Law No. 161 for 1958 where objectives and purposes of the project require so within the limits proposed by the concerned body.
3. In case the project is cancelled, liquidated or sold to others, the investor shall have to:

A.     Subject to the right of Syrian Arab investor to maintain ownership of the whole land and real estate of the investment project, he shall have to cede the excess property to other Syrian Arab citizens within a period not exceeding two years as of the date of the Council's decision canceling the project. In case he desires to cede his ownership of the whole lands of the project or part thereof to non-Syrians for the establishment of an investment project thereon under the observed provisions of investment encouragement, he shall have to obtain a prior approval from the Council.

B.     Upon the project cancellation or its final liquidation, the Arab or foreign investor shall have to cede to others, within a period that does not exceed two years as of the cancellation or liquidation date, the whole ownership of the buildings and lands of the project. It is conditional that he obtains the prior approval of the council where the waiver is for the interest of a non-Syrian person.

4. In case the investor does not abide by the waiver of lands and real estates as stated in items a-b of this paragraph, ownership of these lands and real estates shall revolve to State Properties Department in lieu of a cash amount to be determined according to the observed laws and regulations.

F.        Approve the applications for the waiver, merger or transfer of the ownership of projects covered under the Investment Law provisions.
d. Decide on the waiver applications for same of the project imports either through sale in the local market, export to foreign markets or utilization in purposes other than the project's pursuant to the provisions of Article 12 of the Investment Law.

G.       1-Allow the expatriate Syrian investors and citizens of Arab and foreign countries, after the elapse of five years of investment to transfer the value of their net shares in the project in foreign currency abroad on basis of the net project's value on date of waiver provided that they clear their financial obligations with the concerned bodies.
2- Investors, in the case stated in paragraph 1 stated above, shall be totally responsible for the procurement of the amount to be transferred abroad through the Commercial Bank of Syria, whether this amount is among the returns of the project in foreign currency deposited at the project account deposited with said bank or through the foreign currency generated from the sale of his share or project in foreign currency to an Arab, foreign or a Syrian expatriate investor, provided that the amount of the share project sold is transferred from abroad duly through the Commercial Bank of Syria for this purpose restrictively. The amount required to be transferred abroad may be procured when the concerned person purchases the export generated foreign currency from the exporters' accounts opened with Commercial Bank of Syria.
3- Amount is specified through coordination and cooperation between Ministry of Finance, Central Bank of Syria, Commercial Bank of Syria and the investor on basis of the project documents, papers, financial books and records kept by the concerned person.

H.       Approve the retransfer of the foreign money, on same date of its receipt after the elapse of six months if circumstances beyond the control of the investor prevent the investment thereof up to the discretion of the investor. This shall cover also the approval, in certain cases, of its transfer abroad without observation to said period.

I.          Cancel the coverage decision if the entrepreneur, within one year as of the date of notification of the license decision, does not take serious direct measures of implementation. Unless he presents causes justifying that, delay acceptable to the Council to extend the implementation period. In all cases, signature of implementation contracts according to the traditional followed norms is considered as serious direct commencement actions.

J.        Decide on increasing the tax exemption period stipulated in paragraphs A & B, article 13 of Investment Law for the new projects licensed by the Council according to the provisions of the amended Article 15 of Investment Law in the manner shown in Article 21 of these instructions.

K.       Suspend the validity of exemptions, privileges or facilities granted to the project wholly or partially in case entrepreneur fails to carry out all or some duties accruing on him pursuant to the provisions of article 28 of Investment Law relevant to keeping records, books, accounts and providing the Council or the concerned body with information and data when the entrepreneur rectifies these violations. The suspension period shall be considered part of the exemption period granted to the project.

L.        Look into the application for the extension of the project's foundation period licensed under the Investment Law provisions for one additional period or consecutive periods as per the amended Article 14 of the law and take appropriate decision on basis of the review of the Investment Office prepared by same office in light of the opinion of concerned bodies.

M.       Look into suspending the project's benefiting from the exemptions, facilities and privileges stipulated in Investment Law wholly, partially, permanently or temporarily when the materials, machinery, tools, equipment, work vehicles, buses and microbuses meant for the project construction, expansion or development are used for purposes other than the project's or waived without the Council's approval, or, in general, upon the violation of the license conditions. In this case, the violating party shall have to pay the fees and customs penalties according to the observed customs laws and regulations.

N.       Decide on the applications submitted by the owners of existing installations and projects under other observed laws and regulations other than the Investment Law to benefit from some of the benefits and facilities stipulated in said law except for the exemption from taxes and fees. For this purpose, it is conditional that owners of installations and projects adhere to all duties stipulated in the Investment Law.
In all cases, the decision issued in this concern by the Council must state in details all privileges and facilities granted to the existing project, validity period, conditions and duties accruing on the concerned person.

O.       Commission relevant bodies to prepare economic and technical studies for a number of investment projects of priority to be ready and offered to investment houses and investors.

P.        Order the organization of seminars and meetings and invite for holding conferences locally and abroad to promote investment in the country and introduce its opportunities.

Q.       Look into the development and modernization of investment legislation in the country and approve the plan leading to the provision of the appropriate climate.

R.       Look into and decide on all matters and issues related to investment

Investment office

Article 8

Creation of the Office:

An office under the name of Investment Office reporting to the deputy premier for economic affairs shall be created and headed by a person with the rank of an assistant minister.

Article 9

The office shall comprise a number of staff of appropriate qualifications and scientific and practical experience particularly in the following fields:

·         Administrative and Legal affairs.

·         Financial affairs.

·         Economic affairs.

·         Technical affairs.

·         Public relations.

This is in addition to a number of assistant staff. The Premier shall issue a decision forming the office.

Article 10

Office Authorities:

The office, in field of its specialization, shall undertake the following tasks:

a.        Receive and register investment applications forwarded to the Council by the competent authorities, work on the completion of information and data relevant to each application in cooperation and coordination with all relevant different bodies, prepare a file for each application of which copies are distributed to the Council president and members three days at least prior to its meeting date.

b.        Record the invested money received from abroad in the form of foreign currency, in kind or moral rights after accrediting it in a special register. The office may issue, on basis of this record, a de facto registration certificate on each share of the invested capital. The office manager on his responsibility shall accredit this certificate.

c.        Receive complaints of investors, work on handling them and help investors at the concerned bodies to obtain different licenses necessary for their projects to establish the project, follow-up on their affairs relevant to the follow up of project implementation, forward proposals and viewpoints of investors to the Council in all mattes touching investment issues and project implementation.

d.        Record minutes and decisions of the Council and follow up on their implementation with the different competent authorities, keep records and entries necessary for the office task in the application on Investment Law in a way that guarantees good and sound execution. This includes also the collection, coordination and study of reports and data of projects, inter alia, budgets, profit and loss accounts and forwarding regular reports relevant thereto to the Council.

e.        Study drafts of articles of association of joint companies and companies of limited liability initiated under Investment Law, their amendment drafts and forward these prepared projects and studies to the Council to consider the approval thereof.

f.         Issue releases, booklets and statements on investment in the Syrian Arab Republic according to the directives of the Council in Arabic and foreign languages.

g.        Cooperate with the different public, private and joint bodies to organize information campaigns abroad among the communities of the expatriate Syrians, citizens of Arab and foreign countries to get them acquainted with the investment opportunities available in the Syrian Arab Republic under the Investment Law according to the directives of the Council in this respect.

h.        Evaluate the fund in coordination with the two Ministries of Economy & Foreign Trade and Finance.

i.          Approve the granting of the projects their entitlements of tourist transportation means pursuant to the Council’s decision No. (308/M.S) of 5 Aug. 1992 and its amendments.

j.          Approve granting the projects their entitlements of communication means of telephone, fax, and telex pursuant to the Council decision circulated in letter No. 33/1/33 of 15 Feb. 1992 and its decision circulated in letter No. 404/1/33 of 13 June 1994

k.        Study and handle the followings cases:

1.        Study the requests for the extension of project implementation periods according to the provisions of (A&B) of the amended Article 14 of the Investment Law, forward necessary recommendations to the Council to take the decision thereon with due observance to the provisions of Article 13 of said law.

2.        Study and grant approval of the applications to transfer the ownership of approved projects – wholly or partially – according to the provisions contained in the Investment Law and what the Council approves of in this respect.

3.        Study and handle the requests for the amendment of the legal form of projects.

4.        Study and handle the request to modify production capacity and objectives of projects that do not result into a modification in the costs of projects in light of probing the opinion and review of the competent ministry. Actions taken in this respect shall be issued by a decision from the premier – president of the Higher Council for Investment. The Office shall notify the concerned body of the actions taken.

l.          The office manager shall invite investment managers of the concerned ministries to regular meetings to follow up on the implementation of investment projects covered under the Investment Law and review what has been taken regarding each of them, exchange opinion on the manner of handling the issues of investors and forward all that requires a decision to the concerned ministers or the council according to the reporting body to decide whatever is necessary.
Other tasks entrusted thereto by the Council.

Article 11

Tasks of the Concerned Ministry

The concerned ministry, within its field of specialization, shall undertake the following:

First: Receive project license applications for the establishment of the joint stock companies that float their stocks for public underwriting and handle them according to the provisions of Articles 27 and 28 of these instructions.

Second: Receive licensing application for the establishment of joint stock companies that do not float their stocks for underwriting and joint companies of limited liability and handle them according to the provisions of Article No. 29 of these instructions.

Third: Receive applications for the establishment of projects owned by individuals or non-joint companies and handle them according to Article 30 of these instructions.

Fourth: Receive applications for the establishment of projects whose objectives are related to several ministries that are referred thereto from the Council and handle them pursuant to paragraph D of Article 27 of these instructions.

Fifth: A directorate of investment shall be created at each of the concerned ministries that will undertake the task of follow up of investors’ affairs and issues and help them to finalize their transactions at the ministries and other related public bodies.
Transactions of investors, according to the Investment Law provisions, shall be given priority at all different official entities.

Sixth: In application of the decision issued by the Council approving the project coverage under the Investment Law, the concerned ministries and bodies are committed to the following:

·         Issue of the different licenses (administrative license, industrial license.. etc.)

·         Facilitate the obtainment by the investor of the necessary basic services for the project (electricity, water, fuel, telephone) at the expense of the investor who will bear all expenses resulting therefrom according to the decisions issued by the Council.

Seventh: Issue the decision relevant to defining the need of each project of work cars in type and number out of the economic study prepared for the project approved thereby according to the provisions of the Council decision No.31 of 1 Feb. 1992.

Eighth: Propose the appointment of public sector representatives in the board of the joint company pursuant to Article 26 of these instructions.

Ninth: Specify numbers, quantity and specifications of the machinery, appliances, equipment and materials necessary for the establishment of investment projects under the Investment Law, development, expansion and the material necessary for their operation that are imported, verify invoices and regular financial documents issued by the issuing party prior to their referral to the Office to record their values in the special register pursuant to paragraph B of Article 10 of these instructions.

Tenth: Subject to the provision of paragraph L, Article ten of these instructions, the concerned ministry shall:

a.        Review the projects covered under the Investment Law on regular basis, follow up on their implementation in coordination with the Office to ensure the serious implementation of projects by the investors and forward regular reports on this to the Council through the Office covering the route of each project, stages reached, difficulties and problems that block implementation, actions taken to solve them or indicate suitable solution proposals thereto.

b.        Propose the cancellation of decisions covering projects that are not seriously commenced in implementation pursuant to paragraph (D), Article 27 of Investment Law and forward such proposals to the Council via the Office to decide what it deems appropriate in their respect.

Eleventh: The concerned ministries, within the limits allowable by the legal provisions in force, shall delegate the local Investment Committee, stipulated in Article 13 of these instructions, as well as their directorates in the governorates with the necessary authorities to handle issues of investors and decide on them without referral to the Central Administration and the Office shall be informed of the actions taken in this concern.

Twelfth: Study the project modifications requests in terms of the essential technical aspect on appliances, and production equipment imported by the investors and approve them in a way that these modifications do not lead to a modification of the estimated investment costs of the imported appliances by increase or decrease of 30% of their value stated in the project’s approval decision and provided that the modification does not lead to:

·         Modification of production data or project objectives or its production capacity.

·         Negative effect of the technological line.

·         Essential modification on workers number.

Thirteenth: Handle complaints of investors within a period not in excess of two weeks as of the complaint registration date.

Fourteenth: Hold regular meetings with investors whose projects are covered under Investment Law in presence of the concerned minister and Office manager to discuss problems encountered in the implementation of their projects, handle them and forward results to the council to take whatever is deemed appropriate thereto.

Article 12

All entities, departments and institutions shall be obligated to provide facilities and assistance to the investors to finalize their transactions and affairs immediately. They shall be also obligated to reply their inquiries and inquiries of the Office within one week as of the inquiry registration date.

Article 13

1- A local Investment Committee shall be formed in each governorate as follows:

·         Governor Committee president

·         Vice – president of the executive Office Committee vice-president

·         Economy Director Member

·         Agriculture Director Member

·         Supply Director Member

·         Transport Director Member

·         Industry Director Member

·         Electricity Director Member

Tasks of the Committee shall be:

a.        Follow up on the implementation of the Council decisions duly notified thereto.

b.        Follow up on the granting of licenses for the projects decided by the Council to be covered under the Investment Law within the governorate.

c.        Manage complaints of investors referred thereto from the Office within the period specified thereto and inform the office of the results.

d.        Follow up on the affairs of investors and help them to finalize their transactions within the governorate.

2- The Governor may invite whoever he wants to attend the meeting of this Committee.

Exemptions, Privileges and Facilities

Article 14

On opening of an account in foreign currency:

a.        In addition to the facilities prescribed in the observed foreign currency laws and regulations, the investor shall have the right to open, for the interest of his licensed project under the Investment Law, an account in foreign currency with the Commercial Bank of Syria in which the creditor side thereof the following shall be entered:
100% of the amount paid in foreign currency of the project capital and loans obtained in foreign currency.
75% of the foreign currency generated from the export and services realized from its activities.
The remaining 25% shall be sold to the Commercial Bank of Syria according to the rates stated in article 4 of these instructions. On the debtor side of said accounts, the amounts required to cover all liabilities, requirements and needs of the project from foreign currency shall be entered. e.g.:

·         Amount of machinery, appliances, and work cars, materials necessary for the institution, operation, development or expansion of the project.

·         Primary materials, semi-processed and ancillary items for the production process.

·         Spare parts and renovation of worn out machinery.

·         Parts of loans and interests due on the project loans in foreign currency.

·         Entitlements of interest and profits transferable annually to expatriate Syrians and citizens of Arab and foreign countries who transferred the amount of their shares or contributions in foreign currency from abroad through one of the banks in the Syrian Arab Republic or through one of the means approved by the Foreign Currency Office according to the observed norms. This covers also the entitlements allowed to be transferred abroad for the staff of the project of non-Syrian nationals or those of same category via the Commercial Bank of Syria.

·         Amounts payable by the project that it is obligated to pay and transfer abroad in foreign currency via the Commercial Bank of Syria on basis of regular papers and documents.

·         Expenses payable in Syrian Arab Republic in foreign currency.

·         Insurance premiums that the project is obligated to pay in foreign currency.

·         Remunerations and indemnities of the companies’ board members of non- Syrians and those of same category.

b.        The Office shall be informed of the entitlements being transferred by the Commercial Bank of Syria.

c.        The project is considered very responsible for the provision of its whole needs of foreign currency according to proper methods and no official entity in the Syrian Arab Republic shall be obligated to procure any amount in foreign currency to the interest of the project or to the owners of the project.

d.        It is permissible, by a decision from the council, to exceed the percentage that the exporter retains from export generated foreign currency pursuant to foreign currency regulations in force relevant to exports.

e.        It is permissible, by a decision from the council and according to the requirements of the nature of work, to sanction the companies and projects licensed under the Investment Law and its amendments to open foreign bank accounts to procure their needs, settle their liabilities and collect their dues provided that the amounts deposited in these accounts do not exceed 50% of the capital paid in foreign currency upon the proposal of the Commercial Bank of Syria and approval of the Ministry of Economy & Foreign Trade.

f.         It is permissible, by the approval the Minister of Economy & Foreign Trade,([1]) to permit the projects and companies licensed under the Investment Law and its amendments to transfer upon need a part of its assets in foreign currency duly deposited with the Syrian banks to the local currency to cover their local requirements and burdens through these banks at the actual prevailing exchange rates at the neighboring markets.

Article 15

The investor shall have the right to employ the current foreign currency in his possession inside the country or the foreign currency abroad which he brings in to the country duly for the financing of his projects covered under the Investment Law or in the contribution to their capitals or the purchase of their shares, contrary to any text in force.

Article 16

a.        The bank shall be obligated to put the funds of the investors deposited therewith according to paragraph (A), Article 16 of the Investment Law at their disposal upon request and take all measures that guarantee this.

b.        The bank shall give interest for the amounts deposited therewith in foreign currency proportionate with the prevailing interest rates.

c.        The investor may place some of his assets of foreign currency in a frozen account with the Commercial Bank of Syria.

d.        A checkbook especially for investors shall be given to the investor for exclusive use for the project purpose.

e.        The Commercial Bank of Syria shall finance all burdens, requirements and needs of the project of foreign currency according to these instructions.

f.         The investor who opens, according to foreign currency regulations observed, an account with the Commercial Bank of Syria to the interest of his project licensed under the Investment Law, may recover the amount he brought in regularly from abroad and deposited with the Commercial Bank of Syria after he had completed the implementation of the project and settled all of its needs and requirements of its operation of primary materials, spare parts and working capital of foreign currency.
He shall also be allowed to transfer this balance abroad where the investor is a Syrian expatriate or an Arab or foreign non-resident citizen. It shall be ensured that the entrepreneur remains obligated to procure foreign currency required to cover all prospective needs of the project through regular banking channels.

Article 17

a.        The investor shall have the right to borrow for the interest of his project from the state banks in local currency with the guarantee of his private money in the Syrian Arab Republic according to the regulations observed in these banks.

b.        The investor shall bear all material and rightful results that may arise from foreign and local loans that he was obligated or may be obligated thereto inclusive the payment of installments and interest according to legal provisions and regulations applied. Neither the government nor any other public entity shall be obligated to provide any guarantee whatsoever and to any entity whether foreign or local. These loans shall be excluded from insurance with the Arab Establishment for Guarantee of Investment or with any other establishment.

Other Exemptions, Privileges and Facilities

Article 18

Projects shall be considered economic units existing by themselves irrespective of the owner. They enjoy the exemptions, privileges and facilities stipulated in Investment Law listed in these instructions.

Article 19

a.        Without abidance by the provisions of import prohibition, and restriction of direct import system and foreign currency, projects may import the following:

1.        All needs of machinery, apparatuses, appliances, equipment, work vehicles, inclusive buses and microbuses for project services and other materials necessary for their construction, development or expansion.

2.        Service tourist cars.

3.        All materials and requirements necessary for the operation of the project (primary, semi-manufactured and manufactured and all materials necessary for production process that are considered part of the final product and a component thereof).

b.        Project imports indicated in item 1 of this article shall be exempted from taxes and financial, municipal and customs fees and other fees provided that they are restrictively utilized for the project objectives.

c.        It shall be impermissible for the project to waive any of the imports defined in item 1, paragraph A of this article unless it obtains the council’s approval and after it pays the taxes and fees accruing thereon according to their status de facto inclusive capital profit tax stipulated in Article 32 of Investment Law pursuant to regulations in force.

It shall be also impermissible to waive any of the imports defined in items 2&3, paragraph " a " of this article or utilize them in purpose other than the projects unless approved by the council and its acceptance to the reasons justifying this action. Exempted from the application of this article are cartridges of imported materials “barrel orders”, manufacturing remainders, waste, and residues according to the approved international rate.

Imports mean, in field of applying paragraph A, Article 12 of Investment Law, all imported machinery, apparatuses, tools, appliances, equipment, work cars, buses, and microbuses for the service of the project and other materials required for its establishment, expansion or development.

Article 20

a.        Projects belonging to individuals or non-joint companies, their profits and distributed items shall be exempted from all taxes imposed on revenues, from real estate and non-built plot revenue tax (inclusive machinery return tax) that they own to realize their objectives and tasks for a period of five years as of the date of actual production or investment according to the nature of the project.

b.        Joint enterprises licensed under Investment Law in which the public sector participates by not less than 25% of their capital shall take the form of a closed stock company or a limited liability company. This company, stocks, funds, profits and dividends shall be exempted from all taxes imposed on income, tax on real estate and un-built plots revenue (inclusive machinery return tax) of what the company owns to achieve its objectives and tasks for seven years as of date of actual production or investment according to the nature of each enterprise licensed under Investment Law.

c.        Date of production commencement or actual investment means, in field of the application of paragraph A &B of this article, the date on which production or commercial investment starts.

d.        Investment enterprises licensed under Investment Law, after completion of the exemption periods stipulated in that law, shall be subject to the taxation exemptions and other privileges stipulated in the private laws and regulations relevant thereto originally that are applied to other enterprises unlicensed under the Investment Law, inter alia, for example, agricultural, health and marine transport projects.

e.        1- Foundation period of investment enterprises, in field of applying Article 14 of Investment Law, amended by item 3, Article one of Legislative Decree No. 7 for 2000, starts as of the date of the license decision issue establishing the joint, stock or limited liability company. However, regarding enterprises belonging to natural or legal personalities, the foundation period starts as of the issue of the approval of the Higher Council for Investment for the institution of these projects.
2- Foundation period stated in item 1 above is determined by three years. Excess period shall be deducted from the original tax exemption period stipulated in Investment Law. However, the Council, in exceptional cases, upon its discretion and upon a written justifying application of the investor to the Council through Investment Office and attached to the opinion of concerned authorities, may grant the enterprise an additional consecutive period(s) so that the licensed enterprise foundation period does not exceed maximum five years. This additional period shall not be deducted from the original tax exemption stipulated in paragraph A&B, Article 13 of Investment Law.

Article 21

By a decision from the Council, an additional exemption period shall be added to the two tax exemption periods stipulated in paragraph A&B, Article 13 of Investment Law for the new projects that will be licensed under said law after the promulgation of Legislative Decree No.7 of 13 May 2000 according to the following:

1.        Two years when the outcome commodity or service project exports transferred actually to Syrian Arab Republic, whether in cash or in kind, according to foreign currency regulations observed, exceed 50% of its total production during the original exemption period. In this respect, the Council shall accredit the official banking documents issued by the Central Bank of Syria and Commercial Bank of Syria as well as the enterprise balance sheets and its financial statements. Provision of Article 15 of Investment Law before amendment shall remain valid for the projects initiated prior to the promulgation of Legislative Decree No. 7 for the year 2000.

2.        Two years where the project, as deemed by the Higher Council for Investment, is of special fundamental importance for national economy in light of its capital investments, added value it realizes, its contribution to the development of national product, export boosting, increase of working opportunities and utilization of a high standard of scientific and technical transport projects, heavy industries, fine investment industries of high technology, fertilizers and others.

3.        Two years where industrial or agricultural investment project is established in one of the following developing governorates: Raqqa, Hassakeh, Deir Ez-Zour.

Article 22

a.        Joint companies licensed under Investment Law shall be exempted from the stamp fee due on the issue of their stocks pursuant to Law No. 15 for 1993.

b.        New non-joint closed stock companies that float their stocks for public underwriting by a percentage not less than 50% of their capitals and that will be licensed under the Investment Law shall be exempted from the stamp fee due on the issue of their specified stocks according to Law No. 15 for 1993.

c.        Rate of income tax on net profits realized by stock companies that float their stocks for public underwriting by a rate not less than 50% of their capitals that take Syria as their main headquarters for all of their activities at the rate of 25% inclusive the military effort. This tax shall be excluded from the addition for the interest of local administration. Provisions of Article 3, Law No. 20 of 6 July 1991 relevant to the defining of income tax on profits of said companies should be definitely amended pursuant to the provisions of this article.

Contents of this text shall be implemented as of the tax imposition of year 2000 turnover.

([1]) Resolution of the Higher Investment Council in its session No. 3 of 3 May 2001 and circulated by the letter No. 375/1/33 dated 14 May 2001.

General Provisions for the Foundation of Joint Companies

Article 23

a.        Joint enterprises licensed under Investment Law in which the public sector participates by a percentage not less that 25% of their capitals should take the form of a closed - stock company or a limited liability company. It is permissible, upon need and by a decision from the council, whether public sector contribution is in cash or in kind against real estate, appliances, equipment or new or second-hand machinery…etc.

b.        Founders shall set the draft of the company articles of association in a way consistent with the nature of its work and shape of its formation. It is possible to define in these articles of association the nationality of its chairman and board members, number, ages, remunerations, benefits, method of their election or appointment, ratio of non-Syrian representation in the board, work mechanism in the board, define the company’s capital, value of share in the local currency and its equivalent in foreign currency or vice - versa without abidance by laws and regulations in force particularly Trade Law No. 149 for 1949 and its amendments. These articles of association shall be issued by a decision from the Premier after the Council’s approval thereof.

c.        It shall be permissible for the Council and by a decision therefrom to apply the provision of paragraph B of this article to stock companies established under Investment Law to carry out licensed enterprises according to its provisions in light of their importance in term of their versatile objectives or projects, volume of their capitals or nationality of their founders.

Article 24

Joint companies established under Investment Law shall be considered among private sector companies, and they shall not be subject to the provisions and restrictions stated in the legislative and administrative texts relevant to the public sector companies whatever the percentage of the state contribution and public sector’s therein is.

Article 25

a.        In exception from the provisions of Law No. 134 for 1958 and Legislative Decree No. 49 for 1962 and their amendments, board of directors shall set labor policy of the joint company with due observance to the provisions of Labor Law No. 91 for 1959 and its amendments, and it shall be issued by a decision from the Premier.

b.        The company board of directors shall issue the financial and accountancy policy of the company on basis of the forms prepared by the Finance Ministry. Other company policies shall be issued by a decision of the company board.

Article 26

a.        board of directors whose number shall be defined in the articles of association shall manage the company. Appointment of public sector representatives shall be by a decision from the Premier upon a proposal of the competent minister.

b.        The company board shall appoint general manager of the company. The general manager may not combine his job and the chairmanship or the membership of the board.

Special provisions concerning the establishment of joint sector companies

taking the form of corporations whose shares are to be offered

for subscription by the general public

Article 27

Submission of Request for the Establishment of the Corporation

a.        The founders shall submit, to the concerned ministry a request to establish a joint sector corporation, accompanied by a preliminary economic feasibility study and stating its purposes, objectives, capital, projects to be undertaken, names of founders, percentage of capital to be subscribed by each founder and percentage of capital to be offered to public subscription..
The request may also contain an authorization given to one or more persons to sign the draft by-laws and the final text of the by-laws after their approval

b.        The concerned ministry shall give its opinion about the economic feasibility of such corporation and its conformity with the objectives of economy development of the request, accompanied by all required documents, and shall refer the same to the council, through the office, proposing at the same time the public sector enterprise, which will participate in the corporation…
The concerned ministry may ask the investors to submit such information and documents as it may deem necessary to help it study the matter, provided such demand will not delay reference of the request to the council beyond the said 30 days.

c.        The council shall decide upon the request referred to it within thirty days as from the date of its registration at the office. In case of approval, the President of the Council of Ministers shall issue an order creating the corporation according to the attached form.

d.        In case the projects to be undertaken by the proposed corporation are varied and concern several ministries, the request shall be submitted directly to the council which will refer it to the various concerned ministries so that they may give their respective opinion about the projects which concern each of them on the basis of the economic feasibility study and compatibility with the state economic and social development plan of each project. Each ministry shall give its opinion to the council within 30 days as from the date of registration of the referred request with it. The council shall, thereafter, decide upon the request according to the same procedure prescribed in paragraph. “c” of this article.

Article 28

Procedures for the institution of joint stock company

a.        Private sector founders in coordination with the public sector entity that will participate in the company capital shall organize the processes of public underwriting and their control and carry out all the works to be done by the founders as stipulated in the Syrian Trade Law No. 149 for 1949 and its amendments.

b.        Underwriting invitation statement shall be organized covering the information stipulated in Trade Law. This statement shall be published in the gazette and in two dailies at least at the headquarters of the company and in one daily at least in each city that has a center for underwriting

c.        Underwriting shall remain open for two months.

d.        Should underwriting exceed the number of floated stocks, the excess shall be distributed among the underwriters, but the underwriters in fewer numbers shall be observed.

e.        Should the underwriting, inclusive the state participation, during the underwriting period be less than three quarters of the stocks, it is permissible to extend this period for a similar period by a decision from the competent minister. Should the underwriting ratio after the elapse of the new period remain less than three quarters of the total stocks, and then article 112 of Trade Law shall be applied unless the competent authority, with the Council’s approval, covers the stocks that have not been underwritten for.

f.         Should underwriting reach three quarters of stocks at least without covering them completely, inclusive the contribution of the state, the institution process shall be followed up as if the stocks are completely covered.

g.        Underwriting shall take place at one or more of the Syrian banks in the country and at the Banks approved by Commercial Bank of Syria abroad for foreign underwriting.

h.        Upon underwriting 50% of the stock nominal value shall be paid and the remainder shall be settled within the period specified in the articles of association. Payment of Syrian expatriate underwriting and citizens of Arab and foreign countries, or purchase of company stocks shall be in foreign currencies on basis of circulated price in the neighboring markets. Same rate shall be applied upon the payment of shareholders upon the payment of shareholders profits in foreign currency duly.

i.          If the license application is relevant to the institution of a company of which a part or the whole of its capital is in kind (real estates and land-moral rights… etc), their value shall be assessed according to laws and regulations in force in this concern.

j.          The company shall be subject to provisions of Trade Law No. 149 for 1949 and its amendments in whatever is not stated in Investment Law and its amendments, or the by-law of association and these instructions.

Provisions governing the institution of joint stock companies that do not float

their stocks for public underwriting and joint companies of limited liability

Article 29

Joint stock companies that do not float their stocks for underwriting and joint companies of limited liability shall be subject to the provisions of Investment Law, its amendments, their articles of association and these instructions particularly articles 23,24,25 thereof.
They shall be subject, other than this, to provisions of Trade Law No. 149 of 1949 and its amendments.

Provisions governing the institution of enterprises by individuals

or non-joint companies

Article 30

a.        The investor or who is duly deputized thereby shall submit the application to establish the enterprise that shall be owned by an individual or a non-joint company to the competent authority according to the form prepared by said authority attached to all required documents. The application shall be registered on date of receipt in a special record. The concerned person shall be given a receipt carrying the application registration number and date of registration.

b.        The relevant entity shall study the investor’s application and refer it to the Council through the office with its opinion thereon within a period that does not exceed one as of the date of its registration fulfilling all legal conditions with all the documents attached.

c.        The Council shall study the application in the first meeting held after its receipt. The Council shall have the right to request the concerned entity or the investor any data, illustrations or additional information it deems necessary to decide on the subject.

d.        The Council shall issue its decision of approval during one month as of the application registration date covering bases and rules prescribed for the project implementation inclusive its legal form, objectives, invested capital, investment costs, value of materials, tools and appliances required to be imported from abroad and sources of financing.

e.        The concerned party shall have the right to complain to the Office directly in case of refusal of the enterprise and the Council shall reconsider its decision in light of the new documents and illustrations provided by the concerned person.

Provisions governing closed anonymous stock companies

Article 31

Definition of closed anonymous stock companies and main objectives in field of Investment Law application.
Closed anonymous stock companies, stipulated in article two of Legislative Decree No.7 for 2000 and in field of Investment Law application, are stock anonymous companies of multi-purpose and economic activities in the fields stated in said law whose paid capital is not less than 1000 million S.P. They shall have the jurisdiction and legal personalities enjoy all rights and authorities necessary to enable them perform their works and activities, enjoy financial and administrative independence.

They shall be subject to the provisions related to the anonymous closed stock companies stipulated in the Syrian Trade Law No. 149 for 1949 and its amendments, Article 19 amended of Investment Law and Article 21 thereof.. Their objectives shall be defined as follows:

·         Establishment of projects of independent financial and administrative status, investment companies or share others in the establishment of these enterprises and investment companies and manage them pursuant to Investment Law and its amendments, laws and regulations encouraging investment in the following fields:

a.        Agricultural projects of plantation and animal branches including projects of processing agricultural products.

b.        Industrial projects available for private and joint sectors.

c.        Transport projects.

d.        Projects that the Council decides to get them covered under Investment Law and its amendments.

e.        Tourist projects pursuant to provisions of laws encouraging tourist investment particularly the decision issued by the Higher Tourist Council No. 186 for 1985 and its executive instructions.

f.         Agricultural projects pursuant to provisions of Legislative Decree No. 103 for 1952.

·         Licensing deed of each project shall define the law or regulations applicable thereto. The closed company shall have the right to perform the following for fulfilling its objectives:

a.        Own stocks and bonds stipulated in Trade Law No. 149 for 1949 and its amendments and of any other laws and regulations issued in this respect.

b.        Purchase, own and lease lands and real estates necessary for the project they establish or participate therein by a percentage of not less than 50% within the limits of their actual needs, work or developing or reclamation thereof for the construction of projects and installations thereon.

c.        Manage the companies they participate in or own shares in their capitals by not less than 50%.

d.        Take legal actions relevant to the transferable or nontransferable funds or other rights in sale, purchase, mortgage and property transfer and other types of actions related to properties of the company.

e.        Provide technical and consultative services; conduct charged or non-charged studies for the companies they participate in their capitals or for any other body.

f.         Provide loans and facilities to the companies and projects they own or participate in a share of not less than 50% of their capitals.

g.        Perform any other works that the company deems necessary to fulfill their objectives and approved by the Higher Council for Investment.

It shall not be among the objectives of the closed anonymous stock company the acceptance of deposits and the exercise of banking and insurance works.

Exemptions granted to closed anonymous stock companies

Article 32

·         Closed anonymous stock companies that float stocks of their projects and companies for public underwriting by a percentage not less than 50% of their capitals, that are licensed under Investment Law and its amendments shall be exempted from the stamp fee due on the issue of their stocks as defined pursuant to provisions of Law No. 15 for 1993.

·         It shall be permissible, by a decision from the Higher Council for Investment, to get the projects launched by the closed anonymous stock companies or share in their capitals by not less than 51% covered under the Law No. 10 for 1991. They shall be also subject to provisions of paragraph B, amended Article 19 and Article 21 of said law.

·         Net profits of the closed anonymous stock companies in their projects or companies in which they have a share of not less than 51% shall not be subject to tax imposition on industrial, trading and non-trading profits as of the tax imposition of 2000 turnover.

·         Rate of income tax on net profits realized by closed anonymous stock companies that float their stocks for public underwriting by not less than 50% of their capitals and that take Syria as their main headquarters for all of their activities shall be defined by 25% of these profits inclusive contribution to the military effort. This tax shall be excluded from the addition to the interest of local administration.

Procedures governing the institution of closed anonymous stock companies

Article 33

Founders of the closed anonymous stock company shall submit the application for instituting the company signed by them duly to the Investment Office containing: names of founders, dates of birth, objectives and aims of the company, business center, duration, capital, manner of settlement, shares of founders, value of stock and the percentage that will be floated for public underwriting. Attached to the application, the draft of its articles of association prepared by the founders in light of the provisions relevant to the anonymous stock companies stipulated in Trade Law No. 149 for 1949 and its amendments, provisions of the amended Article 19 of Investment Law and Article 21 thereof according to the form prepared by Ministry of Supply & Internal Trade and approved by the Cabinet.

·         Number of founders must not be in all cases less than five.

·         Investment Office shall, within ten days of the application registration therewith, refer draft of articles of association with a copy of the company registration application to the Ministry of Supply and Internal Trade for study. The Ministry shall have the right to ask the founders to effect the amendments it deems necessary to synchronize the project with the provisions and form mentioned in item 1 above.

·         The license establishing the company and attesting its articles of association shall be issued by a decision from the Premier after the approval of the Council thereof and they shall be published in the gazette.

·         Within two weeks as of publishing the decision of company institution and attestation of its articles of association, the founders shall commence the procedures of stock covering or underwriting therein.

It is permissible for the founders to cover the whole stocks lonely or in participation with others without floating them for the public underwriting. They may also underwrite in one part that cannot be reduced and float the remainder for underwriting. This shall be mentioned frankly in the licensing application and in the articles of association indicating the number of stocks each founder has underwritten.

Regulations of the closed anonymous stock company

Article 34

In exception from the provisions of Law No. 134 for 1985 and Legislative Decree No. 49 for 1962 and their amendments, board of closed anonymous stock company shall set labor policy of the company observing Labor Law No. 91 for 1959 and its amendments. This policy shall be issued by a decision from the Premier.
Board of closed anonymous stock company shall issue the financial and accountancy policy of the company based on the forms prepared for this purpose by Ministry of Finance.
Board of the company shall also issue by a decision therefrom other policies of the company.
cases, upon its discretion and upon a written justifying application of the investor to the Council through Investment Office and attached to the opinion of concerned authorities, may grant the enterprise an additional consecutive period(s) so that the licensed enterprise foundation period does not exceed maximum five years. This additional period shall not be deducted from the original tax exemption stipulated in paragraph A&B, Article 13 of Investment Law.

Foreign Money

Article 35

Foreign money covers:

a.        Foreign currency transferred from abroad by Syrian citizens, Arab or foreign citizens through a bank in Syrian Arab Republic or through any means approved by Foreign Currency Office, deposited in a separate account for investment in the name of the investor at Commercial Bank of Syria. It shall also be registered at the Office stipulated in paragraph B, article 10 of these instructions on basis of a certificate issued by the concerned bank.

b.        Sets, machinery, appliances, equipment, work vehicles, buses, microbuses and materials necessary for the institution of investment projects under Investment Law or for development as well as the materials required for their operation imported from abroad provided that their numbers, quantities and specifications are defined by the competent entity that licensed the project. Their value shall be registered in the special register at the office on basis of due invoices and financial documents issued by the exporting body after having them verified by the competent authority and on its responsibility.

c.        Moral rights utilized in projects as patents and trade marks registered in one state on the International Union for Industrial Property or according to the international registration rules contained in the international agreements concluded in this respect. Value of these contracts are assessed according to the international norms and by a committee presided by the manager of Property Protection Department in Ministry of Supply and Internal Trade and membership of the manager of Industrial Test & Research Center, a financial expert from Finance Ministry, a member of the Federation of Chambers of Trade and Industry and an expert appointed by the entrepreneur.

d.        Profits, returns and reserves resulting from the investment of foreign money in investment projects whether these profits and returns are realized or collectable in foreign and local currencies if the capital of these projects are increased thereby or if they are invested in other projects covered under the Investment Law.

Investor's Obligations

Article 36

The entrepreneur must:

1.        Keep proper trade books stipulated in Trade Law.

2.        Submit an annual balance sheet, and profit and loss account attested by a certified accountant within four months as of the end of the project’s fiscal year of which copies must be submitted to the competent authority and the Office.
Provision of the balance sheet and account of profit and loss do not substitute the provision of taxation statements to the financial departments according to the provisions stipulated in the income tax law issued by Legislative Decree No.85 for 1949 and its amendments.

3.        Keep a separate regular record covering all details relevant to the project money that enjoy, pursuant to Investment Law, exemptions, privileges or facilities, movement of these funds, and actions taking place thereon and keep it ready for the cognizance of the competent authorities.

4.        Provide the Council and the competent authority with information, data and illustrations requested thereby on the project.

Article 37

In case of transfer of the ownership of projects under Investment Law partially or wholly, the new owner shall replace the old one in the rights, obligations and duties accruing thereon under Investment Law and these instructions. Capital profits generated from the sale of fixed assets shall be subject to the profit income tax according to the laws and regulations observed.
Project ownership transfer through heritage shall not be considered realizing capital profits subjected to profit income tax. However, the transfer event shall be subject to Legislative Decree No. 101 for 1952.

Article 38

a.        Projects and investments licensed under this law shall enjoy non-confiscation, expropriation or limitation of disposal of investment ownership and its returns unless for the purpose of public interest and against a fair compensation. It is also impermissible to seize it unless by a judicial decision. Disputes in all these cases shall be settled by resorting to the competent Syrian jurisdiction.

b.        Investment disputes between investor from the citizens of Arab and foreign countries whose projects are covered under law and the Syrian entities and public institutions shall be settled as follows:

·         Through amicable solution.

·         Should the two parties fail to reach the amicable solution within six months as of the date of serving a written notice for amicable settlement by one of the dispute parties, either of them shall have the right to resort to one of the following methods:

·         Resort to arbitration.

·         Resort to Syrian jurisdiction.

·         Resort to the Arab Investment Court formed according to the corporate Agreement for the Investment of Arab Capitals in the Arab Countries in 1980.

·         Alternatively, that the dispute is settled through the Investment Guarantee and Protection Agreement concluded between Syrian Arab Republic and investor’s country.

c.        Subject to provisions of paragraph B, article 17 of these instructions, investors who are citizens of Arab or foreign countries may arrange insurance for their money invested in approved projects with the Arab Establishment for Guarantee of Investment or with any other institution by the approval of the competent authority.

Article 39

The investor may submit, at any time, a complaint to the Office pointing out the difficulties and problems he encounters. The Office shall have to take necessary measures and follow-ups to final appropriate solutions thereto with relevant bodies within a period not exceeding two weeks as of the date of complaint registration therewith.

Article 40

All data and information submitted by investors to any official body, inclusive banks, relevant to the institution and implementation of their projects cannot be published or circulated.

Article 41

a.        The project shall be subject to the customs fees and penalties pursuant to the observed customs laws and regulations in case of use of the items referred to in Article 11 of this law in purposes other than the project’s or they are waived without the Council approval.

b.        In case of the recurrence of the violation stipulated in the previous article, the Council shall have the right to decide the suspension of the project is benefiting from the exemptions, facilities and privileges defined in this law.

Article 42

Application of Legislative Decree No. 10 for 1986 shall continue for the joint agricultural companies.
These companies shall not be subject to Investment Law whether the existing ones on date of the enforcement thereof or those established thereafter.

Article 43

a.        It is permissible, by a decision of the Council, to grant some privileges and facilities stipulated in Investment Law and its amendments, except for exemption from taxes and fees of any of the projects existing prior to the enforcement of said law or thereafter, upon a complete study prepared by Industry Ministry in coordination with Investment Office defining privileges and facilities that may be granted to the existing project in light of the economic justifications to respond to the request.

b.        Upon the issue of the Council’s decision granting the exemptions and facilities, the project shall be subject to all obligations stipulated in Investment Law namely article 28,29,and 30 thereof.

c.        Subject to provisions of Article 34 of Investment Law, it is permissible, by a decision from the Council, to grant tourist projects some privileges and facilities stipulated in said law except for exemptions from taxes and fees on basis of study prepared by Ministry of Tourism for this purpose defining the privileges and facilities required to be granted to the tourist project and the conditions that the project must abide by against this.

Article 44

Provisions of Legislative Decree No.348 for 1969 shall remain valid for the projects initiated under its provisions prior to the enforcement of Investment Law and these projects shall not be subject to the provisions of said law.

Article 45

Projects approved by Investment Law shall be subject to Trade Law provisions No. 149 for 1949 and its amendments in matters not intervening with Investment Law provisions.

Article 46

Experts, laborers and technicians of Arab and foreign countries citizens working with one of the projects approved by Investment Law shall be allowed to transfer 50% of their net wages, salaries and indemnities and 100% of end of services indemnities abroad in foreign currency resulting from project activities.

Article 47

The Council shall issue the necessary decision to organize the circulation of shareholding company stocks with the aim of encouraging citizens in the investment of their savings in the purchase of stocks, facilitate the handling procedures thereof, and provide basic information about these companies, their work and activities. The decision issued in this respect shall be an integral part of these instructions.

Article 48

Application of executive instructions issued in decision No. 6/M.W. of 26 July 1998 shall be terminated.

Article 49

These instructions shall be published and notified to whoever is necessary to abide and work accordingly as of to date.

Damascus on 10/7/1421H - 27/9/2001

                                                                Premier
                                                                Dr. Mustafa Mero