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flag Syria Syria: Investing

In this page: FDI in Figures | Why You Should Choose to Invest in Syria | Procedures Relative to Foreign Investment | Investment Opportunities

 

FDI in Figures

Before the crisis facing the country since March 2011, Syria was committed to gradually opening its economy, moving from a closed and centralized economy to a model approximating market economy. In a particularly difficult regional context, the country was trying to set up the mechanism of a market economy in order to regain the trust of foreign investors. The Syrian economico-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 over decades. The establishment of a private banking system and private insurance companies (domestic or foreign), the opening of the local market with import liberalization (gradual removal of tariff barriers to market access and reorganization of the customs administration with the assistance of the European Union) were all tangible results of the update of the country's legislative and fiscal framework. Syria also established a number of industrial zones as an advantageous framework for foreign companies interested in relocating to the country.

Foreign investors were growing more numerous in the country but the current severe political, economic and social crisis has degenerated into a civil war, which impeded this dynamics and led to the reflux of FDI.

 

Country Comparison For the Protection of Investors

  Syria Middle East & North Africa United States Germany
Index of Transaction Transparency* 7.0 6.0 7.0 5.0
Index of Manager’s Responsibility** 5.0 5.0 9.0 5.0
Index of Shareholders’ Power*** 4.0 9.0 5.0
Index of Investor Protection**** 4.7 5.0 8.3 5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

 
Foreign Direct Investment 201120122013
FDI Inward Flow (million USD) 804--
FDI Stock (million USD) 10,74310,74310,743
Performance Index*, Ranking on 181 Economies 98--
Potential Index**, Ranking on 177 Economies 55--
Number of Greenfield Investments*** 1510
FDI Inwards (in % of GFCF****) 5.8--
FDI Stock (in % of GDP) 16.723.123.1

Source: UNCTAD - Last Available Data.

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

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Why You Should Choose to Invest in Syria

Strong Points
Syria's main strong points are:
- The highly skilled workforce in traditional industries such as textiles and clothing manufacture;
- The appreciation of new activities, mainly in training, counseling and knowledge transfer;
- Its engagement for the liberalization of its economy;
- A low level of debt:
- A tourism sector in full development;
- The establishment of a system more favorable to trade: removal of exclusive rights to import agents, reduction of customs duties on raw materials and the establishment of a harmonized system of nomenclature (HSN);
- The advancement in the banking sector, through the authorization of accounts in foreign currencies.
Weak Points
 Syria's main weak points are:
- A strong demographic pressure (36% of the population under 15 years, 50% under 21 years and 250,000 new comers into the job market);
- A per capita income that progresses too slowly: 30% of the population still lives with less than USD 2 per day;
- The erosion of budgetary income and the degradation of the terms of the energy balance;
- A high rate of inflation, aggravated by a year of particularly severe drought;
- The absence of any refinancing instrument for Syrian banks and the explosion of credit in the private sector;
- The prices of real estate which have almost doubled in Damascus since 2006;
- A 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).
Government Measures to Motivate or Restrict FDI
Syria has profoundly changed its legislative and legal base in order to attract foreign investment. The country has set up seven free zones which allow different production activities and services in the industrial zones. The government has also favored the development of industrial cities. It has created four new towns where an industrial complex is back to back with a residential area. These centers are intended to occupy the space between ancient and traditional urban areas. Syria has abandoned the first investment decree n°10 of the nineties to the benefit of decree n°8 which is much more favorable to FDI (land ownership, repatriation of profits...). This law has allowed the access of private investors into the industry sector.
Bilateral Investment Conventions Signed By Syria
Syria has signed many bilateral agreements with the United States, Germany, Pakistan, China, Indonesia, Russia, Belarus, Iran, Libya, Tunisia and Lebanon.

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Procedures Relative to Foreign Investment

Obligation to Declare
The Syrian investment map provides information about the authorizations required to set up a business in the country.
Competent Organization For the Declaration
Syrian Ministry of the Economy
Requests For Specific Authorizations
Air and rail transportation, landline telephones, oil refineries, mineral waters and cereal marketing are among the rare sectors which are still exclusively in the hands of the public sector.

Learn more about Foreign Investment in Syria on Globaltrade.net, the Directory for International Trade Service Providers.

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Investment Opportunities

Investment Aid Agency
Syrian Investment Agency
Tenders, Projects and Public Procurement
Tenders Info, Tenders in Syria Arab Republic
DgMarket, Tenders Worldwide
Other Useful Resources
Syria Today
Syrian Enterprise and Business Center
 
 

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Learn more about Investing in Syria on Globaltrade.net, the Directory for International Trade Service Providers.

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Last Updates: January 2015