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

Section: General Provisions Concerning Joint Sector Companies

Article 22 – Drafting of By-Laws

The founders shall prepare a draft of the joint sector company by-laws, taking into consideration its legal form.
Such by-laws shall be promulgated by order of the President of the Council of Ministers after approval by the Council.

Article 23 – Legal Nature of Joint Sector Companies

Joint sector companies established under the provisions of the Investment Law shall be considered as private sector companies, and the provisions or restrictions of laws governing public sector companies shall not apply to them, regardless of the degree of state participation.

Article 24 – Personnel and Financial Regulations

(a) Without regard to the provisions of Law No. 134 of 1958 and Legislative Decree No. 49 of 1962, the board of directors shall prepare draft personnel regulations for each joint sector company, taking into account the Labor Law No. 91 of 1959.
Such personnel regulations shall be promulgated by order of the President of the Council of Ministers.

(b) The board of directors of each joint sector company shall ratify and promulgate the financial and accounting regulations of the company, referring to models prepared by the Ministry of Finance.
Other internal regulations shall be promulgated by resolution of the board of directors.

Article 25 – Board of Directors and Management

(a) Each joint sector company shall be managed by a board of directors, the number of which shall be determined in the company’s by-laws.
Directors representing the public sector shall be named by order of the President of the Council of Ministers upon proposal of the concerned minister.

(b) The general manager shall be appointed by resolution of the board of directors.
He may not, at the same time, serve as a member of the board.

Special Provisions Concerning the Establishment of Joint Sector Corporations

Article 26 – Request for Establishment

(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 and objectives
• Capital and projects to be undertaken
• Names of founders
• The percentage of capital subscribed by each founder
• The percentage of capital to be offered to public subscription

The request may also include authorization for one or more persons to sign the draft by-laws and final text after approval.

(b) The concerned ministry shall give its opinion on the feasibility of such corporation and its conformity with economic development objectives within 30 days of submission and refer it to the Council through the Office, proposing the public-sector enterprise that will participate in the corporation.

(c) The Council shall decide upon the request within 30 days of its registration at the Office.
If approved, the President of the Council of Ministers shall issue an order creating the corporation according to the attached form.

(d) If projects under the proposed corporation concern several ministries, the request shall be submitted directly to the Council, which shall seek each ministry’s opinion within 30 days.
The Council shall then decide upon the request as prescribed in paragraph (c).

Article 27 – Procedure for Establishing a Joint Sector Corporation

(a) Private sector founders, in coordination with the public sector enterprise participating in the corporation’s capital, shall organize and control public subscription operations according to the syrian/" class="auto-internal-link">syrian Commercial Law No. 149 of 1949.

(b) A public notice inviting subscription shall be published in the Official Gazette, at least two daily newspapers in the city of the corporation’s main office, and at least one newspaper in each city hosting a subscription center.

(c) Shares may be subscribed for two months from the date of publication.

(d) If oversubscribed, the number of shares subscribed by each person shall be proportionally reduced, with preference to small subscribers.

(e) If subscribed shares, including state participation, do not reach three-quarters of the total capital, subscription may be extended for a similar period by order of the concerned minister.
If still below this level, Article 112 of the Commercial Law shall apply unless the competent authority, with Council approval, agrees to cover the unsubscribed shares.

(f) If total capital shares are not subscribed in full but reach at least three-quarters, including the state’s share, establishment formalities shall continue as if all shares were covered.

(g) Subscription shall be made at one or more Syrian banks inside the country and at banks approved by the Commercial Bank of syria abroad.

(h) 50% of the nominal value of each share shall be paid upon subscription, and the balance within periods specified in the by-laws.

The value of shares subscribed by non-resident Syrians and nationals of Arab and foreign countries shall be paid in foreign currency, based on current exchange rates in neighboring countries as published by the Commercial Bank of Syria.

(i) In all matters not specifically dealt with in the Investment Law, joint sector corporations shall be governed by the Commercial Law No. 149 of 1949, their own by-laws, and the present instructions.

Article 28 – Establishment of Non-Public Joint Sector Companies

The establishment of joint sector corporations whose shares are not offered for public subscription and of joint sector limited liability partnerships shall be governed by the Investment Law, their own by-laws, and Articles 20, 21, 22, 23, and 24 of these instructions.
In matters not covered, they shall follow the provisions of the Commercial Law of 1949 regarding establishment, notices, and management.

Special Provisions Concerning Projects by Individuals or Non-Joint Sector Companies

Article 29 – Request and Approval Procedures

(a) The investor, or his duly authorized representative, shall submit to the competent authority a request for permission to establish a project owned by an individual or by a company not belonging to the joint sector.
This request shall be accompanied by all required documents, registered in a special record upon submission, and a receipt issued showing registration number and date.

(b) The competent authority shall study the request and refer it, with its opinion, to the Council within 30 days.

(c) The Council shall study the request at its first meeting after receipt; it may ask for further data or documents from either the authority or investor.

(d) The Council shall issue its decision within one month of registration.
If approved, the decision shall prescribe the project’s legal form, purposes, capital, investment costs, imported materials and equipment, and sources of financing.

(e) If not approved, the concerned party may submit a petition directly to the Office, and the Council shall review its decision in light of new documents or explanations.

Section: Foreign Capital and Investor Obligations

Article 30 – Definition of Foreign Capital

Foreign capital shall include the following:

(a) Foreign currencies transferred from abroad by Syrian, Arab, or foreign nationals through a bank operating in Syria or any means approved by the Exchange Office, deposited in a special investment account opened with the Commercial Bank of Syria, and registered based on a certificate from the bank.

(b) Plants, machinery, equipment, installations, vehicles, buses, microbuses, and other materials and supplies necessary for the establishment, extension, or development of projects benefiting from the Investment Law, as well as materials needed for operation if imported from abroad.
Their value shall be registered in the special record kept by the Office, based on official invoices checked by the competent authority.

(c) Intangible assets used in projects, such as patents and trademarks duly registered in a member country of the International Union for the Protection of Industrial Property or under international conventions.
Their value shall be assessed by a committee composed of:

• The Office Manager (Chairman)
• The Director of Industrial Property Protection at the Ministry of Supply and Internal Trade
• The Director of the Industrial Testing and Research Center
• A financial expert named by the Ministry of Finance
• A representative of the Union of Chambers of Commerce and Industry
• An expert named by the project owner

(d) Profits, returns, and reserves resulting from investment of foreign capital in development projects, whether accruing in foreign or local currency, provided they are used to increase the project’s capital or invested in other approved projects.

Article 31 – Investor Obligations

The owner of an approved project shall:

1. Keep all accounting books and trade records required by the Commercial Law.
2. Submit annually a balance sheet and profit-and-loss account, approved by a certified auditor, within four months of fiscal year end, to both the competent authority and the Council’s Investment Office.
   Submission to these bodies does not exempt the project owner from his obligation to submit statements to the tax authority under the Income Tax Law (Legislative Decree No. 85 of 1949).
3. Keep a special register recording all details concerning project funds that benefit from exemptions, advantages, or facilities, and all transactions on such funds. This record shall be open to inspection at all times.
4. Provide the Council and the competent authority with all information, data, and explanations requested about the project.

Article 32 – Transfer of Project Ownership

If ownership of an approved project is transferred, wholly or in part, the new owner shall succeed the previous owner in all his rights, obligations, and duties under the Investment Law and these instructions.

Capital gain accrued from the sale of fixed assets shall be subject to capital gain tax in accordance with laws and regulations in force.

No capital gain shall be deemed to have accrued in case of transfer through inheritance, which is exempt from such tax. However, provisions of Law No. 101 of 1952 shall apply to inheritance transfers.