Low No. 7 Promulgates Investment Law No. (10) new

Chapter III – Franchises, Privileges and Facilities

Article 10 – General Rule

According to the rules of this law, all projects approved enjoy exemptions, privileges, facilities, and guarantees.

Article 11 – Imports Permitted

Projects approved to be set up according to the rules of this law may import:

a) All requirements of machines, vehicles, apparatus, equipment, means of transport, buses, and minibuses needed to serve the projects, and other materials necessary for setting up, expanding, and developing these projects.
b) Cars.
c) All materials and requirements necessary for running these projects.

The concerned authority determines the quantity and type of various means of transport mentioned in paragraphs (a) and (b) of this article according to the rules determined by the Council.

These import processes are carried out irrespective of rules prohibiting or restricting imports, and irrespective of the rules of importing directly from the country of origin or hard currency regulations.

Article 12 – Exemption from Taxes and Duties

(a) Imports quoted in paragraph (a) of Article (11) of this law are exempted from all taxes, fiscal stamps, local and customs duties, and others, provided they are used exclusively to serve the goals of the project and not relinquished to a third party except by Council consent and after paying due taxes and duties in their present condition.

(b) The project’s imports specified in paragraphs (b) and (c) of Article (11) cannot be relinquished or used for purposes other than the project except by approval of the Council.

Article 13 – Tax Exemptions for Projects

(a) Joint-stock companies approved according to the rules of this law, together with their shares, funds, profits, and dividends, are exempted from all taxes levied on income and real estates owned by the companies for achieving their purposes and tasks, for seven years from the date of actual production or investment according to the nature of the project.

(b) Projects related to individuals or non–joint-stock companies licensed according to this law, together with their profits and dividends, are exempted from all taxes imposed on income and real-estate taxes on the buildings owned for realizing the project’s objectives and tasks, for five years from the date of actual production or investment, according to the nature of the project.

Article 14 – Establishment Period Deduction

If the time spent on establishing the project exceeds three years, this period shall be deducted from the duration of tax exemption quoted in Article (13).

Article 15 – Extension of Exemption Period

By decision of the Council, an additional period of two years may be added to the duration of exemption quoted in Article (13), should the total revenues in foreign currencies transferred into syria through its banks and realized by the project’s exports of goods and services exceed 50% of the total production during the original period of exemption.

Article 16 – Foreign Currency Accounts

(a) In addition to the facilities granted by regulations in force on foreign currencies, the investor may open in favor of his approved project an account in foreign currency at the Commercial Bank of Syria, recording on the credit side:

1. 100% of payments made in foreign currencies of the project’s capital and of loans granted to the project in foreign currencies.
2. 75% of total foreign currencies realized from revenues of exports and services of the project.

On the debit side are recorded funds necessary for covering the project’s liabilities and needs in foreign currencies, including payments allowed to be transferred in favor of syrian/" class="auto-internal-link">syrian expatriates, Arab or foreign citizens, and non-Syrian persons working in the project.

(b) Regardless of any text in force, the investor may use his foreign currency funds in financing projects licensed under this law, or contribute to the capital or buy shares of such projects.

Article 17 – Bank Procedures

(a) The Bank shall place the investor’s funds deposited under Article (16) at the investor’s disposal and shall take necessary procedures to achieve this.
(b) The Bank shall calculate interest on the foreign currency funds deposited in favor of the project’s account in harmony with current interest rates.

Article 18 – Local Loans

The investor may borrow local currency from state banks in favor of his project and against guarantees of his own funds according to banking rules in force.

Chapter IV – Joint Ventures

Article 19 – Joint-Stock Companies

(a) Joint-stock companies licensed by this law, in which the public sector takes part at 25% at least of the capital, shall take the form of a share-holding or limited liability company.
(b) Founders shall set a draft of the company’s bylaws conforming to its nature. These bylaws are issued by decision of the Prime Minister after Council approval.

Article 20 – Board of Directors

(a) The joint-stock company shall have a board of directors representing shareholders according to their subscription percentage. The concerned authority shall name public-sector representatives at the same ratio.
(b) The board shall appoint a director-general, who may not simultaneously serve as chairman or member of the board.

Article 21 – Personnel and Financial Regulations

(a) With exception from Law No. 134 (1958) and Legislative Decree No. 49 (1962) and amendments, the board shall draw up the company’s personnel bylaws considering Labor Law No. 91 (1959) and its amendments. These bylaws are issued by decision of the Prime Minister.
(b) The board shall issue financial bylaws and the accounting system for the company, according to models prepared by the Minister of Finance.
(c) Other regulations are issued by decision of the board of directors.

Article 22 – Stamp Tax Exemption

Joint-stock companies formed under this law shall be exempted from stamp tax levied on share issuance.

Chapter V – Special Rules on Investment of External Funds

Article 23 – Definition of External Funds

External funds include:

a) Foreign currency transferred from abroad by Syrian, Arab, or foreign citizens through a Syrian bank or in a way approved by the Foreign Currency Bureau.
b) Machinery, vehicles, equipment, means of transport, buses, minibuses, and materials necessary for establishing, expanding, renewing, or developing these projects.
c) Profits, revenues, and reserves from the investment of external funds if reinvested in the same or other approved projects.
d) Moral rights used in projects, such as patent rights and trademarks registered in a member state of the International Federation for Industrial Property or under international agreements concluded in this regard.

Article 24 – Re-Transfer of Funds

(a) Investors (Syrian expatriates or Arab/foreign nationals) may, after five years from project investment, re-transfer abroad the net value of their share in foreign currencies on the basis of the actual value of the project, provided the re-transfer shall not exceed the capital brought in by them in foreign currencies.
(b) External funds may be re-transferred abroad after six months from entry if investment becomes impossible due to circumstances beyond the investor’s control, at Council discretion.
(c) Profits and revenues realized annually by investment of external funds may be transferred abroad according to this law.

Article 25 – Central Bank Authorization

The Central Bank of Syria shall allow the transfer abroad of external funds invested in the project, together with profits and revenues, in the same currencies brought in or in any other transferable currency.

Article 26 – Investment Insurance

Investors of Arab or foreign nationality may insure their funds invested in approved projects at the Inter-Arab Investment Guarantee Corporation or any other establishment with the approval of the concerned authority.

Chapter VI – General Rules

Article 27 – Project Application and Licensing

(a) The investor shall apply to the concerned Ministry for approval of his project and confirmation that it is covered by this law. The application must be accompanied by documents showing the prerequisites, elements, aims, economic feasibility, and legal form of the project.
(b) The Ministry shall study the project and refer it to the Council within 30 days from application.
(c) The Council may cancel the approval if the project fails to take serious procedures within one year from licensing, unless justified reasons accepted by the Council warrant an extension.

Article 28 – Investor Obligations

The approved project proponent shall:

1. Keep books as per the Commercial Law.
2. Present an annual balance sheet and profit/loss statement certified by an authorized auditor within four months from fiscal year end.
3. Keep a special register recording all details of funds that enjoy privileges or facilities under this law.
4. Provide the Council or authority with any requested data or statements about the project.

Article 29 – Suspension of Privileges

By its own decision, the Council may suspend the validity of franchises, privileges, and facilities given to the project—wholly or partially—in case of violation of Article (28) until compliance is achieved.

Article 30 – Customs Violations

(a) Customs fees and fines shall be incurred if materials mentioned in Article (11) are used for purposes other than the project or transferred to a third party without Council consent.
(b) If repeated, the Council may cease all privileges and facilities specified in this law.

Article 31 – Existing Projects

By Council decision, franchises, privileges, and facilities (except tax exemptions) may be granted to any existing project. All obligations quoted in this law remain in force.

Article 32 – Transfer of Ownership

If ownership of approved projects is transferred wholly or partially, the new owner assumes all rights and obligations of the former owner. Capital profits from sale of assets are subject to income tax according to regulations in force.

Article 33 – Agricultural Companies

Rules of Legislative Decree No. 10 of 1986 regarding joint-stock agricultural companies remain in force.

Article 34 – Tourist Projects

Tourist projects are governed by existing rules and regulations relevant to them.

Article 35 – Previous Projects

Rules of Legislative Law No. 348 of 1969 remain in force for projects affected before this law came into effect.

Article 36 – Commercial Law Application

Approved projects are subject to Commercial Law No. 149 of 1949 and its amendments, provided they do not contradict this law.

Article 37 – Foreign Experts

Arab and foreign experts or technicians working in approved projects may transfer abroad 50% of their net wages and 100% of their end-of-service compensation in foreign currencies.

Article 38 – Implementation Instructions

The Prime Minister, Chairman of the Higher Council of Investment, shall issue instructions necessary for implementation of this law.

Article 39 – Publication

This law shall be published in the Official Gazette.

Damascus, 4 May 1991
Hafez Al-Assad