Investment Climate Syria

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Investment Climate and Reforms in Syria
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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
S Y R I A Population 21 million Area 185,180
km2 GDP 46 billion US GDP Growth rate
5,8 GDP per capita 2190 Strategic location at
the crossroads of Europe and the Middle East,
between Turkey, Irak, Jordan and
Saudi-Arabia Rich cultural heritage Religious
diversity (Sunni Muslim 72 Alawi Muslim 14
Christian 12 Shia Muslim and Druze minorities)
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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Structure of Syrian GDP
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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Development of the Syrian economy And investment
climate
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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)

• The gradual liberalisation of the centrally
  planned economy under deputy prime minister for
  economic affairs, Abdullah al-Dardari, has caused
  a boom of the private sector (in 2008, 65 of GDP
  generated by private companies)
• The10th 5 year-plan for 2006-2010 comprises
  important reforms for creating a social market
  economy which is explicitly oriented on the
  German concept of Soziale Marktwirtschaft
• ? already numerous positive results
• For the 11th 5 year plan, the government plans to
  increase its spending to reach 50 billion in
  various areas related to developing the Syrian
  infrastructure, developing highways, seaports,
  dry ports, public services.... etc.

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)

• For the 11th 5 year plan, the government plans to
  increase its spending to reach 50 billion in
  various areas related to developing the Syrian
  infrastructure, developing highways, seaports,
  dry ports, public services.... etc.

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)

• Most important results of the Syrian reform
  process
• Fiscal reforms (competitive ratios, tax
  incentives(
• Standardization of exchange rates and pegging of
  the Syrian Pound to the Special Drawing Rights
  (SDR) of the IMF
• Reduction of custom duties (to levels required by
  the EU Association Agreement)
• Integration into GAFTA (Greater Arab Free Trade
  Area)
• Issuing of a Competition Law and Investement Laws
• Launching of the Damascene stock exchange in
  03/2009

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)

• Improvement of the logistics sector
• Involvement of private investors in the
  management of Syrias two main ports (ICTSI /
  Philippines in Tartous, CMA-CGM / France in
  Latakia).
• World Bank logistics ranking 2010(based on
  customs clearance quality of infrastructure
  ease of arranging international shipments
  competence of officials tracking and tracing and
  timeliness)
• ? Syria moved from position 80 (in 2007) to 55
  (out of 155 countries)
• Starting 05/2010 weekly RO/PAX-connection Venezia
  -Tartous (SY) Alexandria (EG) for goods and
  passengers by Venezia Logistics Venezia
  Tartous 68h

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
GDP Growth Rate

• Average annual GPD growth of 5.2 between
  2000-2009.
• Estimated GDP growth of 5.8 for 2009.

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Inflation

• Inflation during the period 2000 - 2007 was
  relatively high, but in 2008 it increased sharply
  due to domestic and global conditions (drought,
  increase in food fuel prices).
• In 2009, figures show significant depreciation in
  inflation.

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Banking sector

• To meet the new requirements of an open market
  economy, and the need for competitive business
  environment at both micro macro levels, the
  Syrian government adopted measures to improve the
  financial sector and to attract more inflows of
  FDI by
• Licensing private banks (including Islamic
  banks), private insurance companies and financial
  services companies in 2000 since 2010, foreign
  operators can acquire up to 60 of Syrian banks
  (before 49).
• Reviving the Monetary Council.
• Modernizing public banks to enable competition in
  the banking sector.
• Establishing and launching the Damascus stock
  exchange in March 2009.

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Energy sector

• Energy consumption 8 / year due to ecomonic
  development and population growth
• Need for more power stations and alternative
  energy sources ? Opening up of the sector to
  foreign companies
• Two major new power projects
• 450 mw extension to the Jandar power station
  (built by Mitsubishi Heavy Industries of Japan)
  in central Syria, bringing its total capacity to
  1,150 mw contract value around 280 million.
• 600 mw-extension to the Zara Power Plant near
  Homs for 400million.
• Wind farm project (BOO or BOT) near Palmyra with
  capacity of 50-100 mw.
• Objective to generate up to 2,500 mw of power
  from wind by 2030.

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Business Environment - Laws Legislations
Issued Laws

1. Anti dumping law.
2. Domestic production protection law.
3. Intellectual property law.
4. Investment decree no 8.
5. Investment Agency establishing decree no 9.
6. Islamic banks decree.
7. Insurance and reinsurance companies decree.
8. Money laundering law.
9. Stock exchange board creation decree.
10. Trade law.
11. Free zones and industrial cities decrees.
12. Provisions of the confidentiality banking
    profession decree.
13. Decree of exemption certificates of origin
    belonging to the national origin of goods
    imported from the Greater Arab Free Trade Area of
    consulate ratification.
14. Establishing Exports Development and Promotion
    Agency law.
15. Digital Signature law, law on Electronic
    Communications.
16. Competition and Anti-Monopoly law.
17. Companies law.
18. Food law.
19. Registration for the branches and agents of
    foreign companies law.

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Business Environment - Laws Legislations
Laws and legislations to be issued in the near
future

1. Patent law.
2. Electronic trade law.
3. Establishing fund for merchants retirement.
4. Improvement of Export / Import Procedures.
5. Facilitating SMEs licensing law.
6. Enforcement of Contracts and Property Rights.
7. Training of Commercial Lawyers and Establishment
   of Commercial Courts.
8. Reform of commercial Courts.
9. Anti fraud law.
10. Labor law.
11. Public private partnership law.

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Holdings

• Establishing a number of Holdings in Syria
• Cham Holding
• Souria Holding
• Syrian-Qatari Holding Company
• Construction Products Holding Company (CPC)
• Bahraini-Syrian Holding Company (unnamed until
  now)
• Kuwaiti United Company for Investment
• Kuwaiti Syrian Holding Company
• Castle Invest Holding
• Al-Mashrek-Fund

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Bilateral Free Trade Agreements and other Trade
Protocols
Eastern EU
Russia
Turkey
EU
Iran
Arab World
Malaysia
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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Foreign Trade (Billion USD)

• 2000 2009
• Overall Syrian exports grew by nearly three times
  (3.2 times).
• Overall Syrian imports grew by more than four
  times (4.7 times).

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Syrian Exports 2008 (mainly agricultural / food
products and textiles)
Arab Countries (especially Iraq) 40
Others 12
America 3
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Syrian Exports 2008 (in million USD)
SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Material 2005 2006 2007 2008 Growth rate
fuel 366 4604 4429 4773 9,2
Animals vegetables 710 693 641 1040 42
Manufactured goods 360 394 1222 1529 62,1
Manufactured materials 190 240 1270 1467 99,2
Non- manufact. goods 2110 25534 761 978 -22,6
Chemical materials 90 202 538 625 92,6
Machines 260 382 519 586 117
Raw non edible materials 260 299 332 202 -7,6
Drinks and tobacco 60 67 69 110 23,3
Total Exports 9.224 10.979 12.588 14.699 16,8
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Syrian Imports 2008
SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Arab Countries 20
Other Countries 16
Asia18
America 5
EU Countries 25
Eastern EU 17
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Syrian Imports 2008 (in
million USD)
SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Material 2005 2006 2007 2008 Growth rate
Fuel 527 2688 3129 4906 110
Animals vegetables 1953 2321 2428 3216 18
Manufactured goods 1814 2165 2450 2562 12
Manufactured materials 1065 1284 1297 1704 17
Non- manufactured goods 996 994 1236 1496 14
Chemical materials 412 483 465 559 11
Machines 199 204 202 200 0,1
Raw non edible materials 72 82 82 117 17,3
Drinks and tobacco 531 444 161 5 -95,6
Total Imports 10.921 11.551 14.882 18.711 19,6
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Syrian-German Bilateral Economic relations
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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Syrian-German Trade
German exports to and imports from Syria in Mrd.

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Syrian German Trade
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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Foreign investment In Syria
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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Foreign Direct Investment
FDI into Syria has significantly increased during
the period 2003-2009.

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Foreign Direct Investment

• 50 of total FDI inflow to Syria has been
  attracted to tourism, 17 to oil
  exploration/production, and 13 to banking
• Investors mainly from Gulf countries and Turkey
  (industrial projects in and around Aleppo)
• German investors Henkel, Knauf

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Investment promotion

• Decrees No. 8 9 relative to investment have
  created an investment-friendly legislative and
  administrative framework, by way of the following
  reforms
• Allowing foreign investors to transfer their
  profits abroad.
• Giving foreign investors the right to own the
  land and means of production as needed during the
  entire period of operation.
• Tax exemptions for project requirements including
  non-tourism and public transport projects.
• Shifting all tax concessions to decree no 51
  (dynamic tax system).

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Investment promotion

• Tax and fiscal reforms
• Tax and fiscal reforms spurred growth of the
  private sector investments (34 new laws and
  decrees since 2003).
• Decree No 51 of 2006 supported the business
  sector in general maximum income tax was reduced
  from about 90 to 63 and then from 35 to reach
  28
• Competitive and low tax ratios 0 28
  (individuals and companies)
• Tax incentives
• Dynamic tax deduction

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Investment promotion

• Legislative Decree No. 9 for the Year 2000
  delineated the role and tasks of the Syrian
  Investment Agency and its independence, and
  introduced the One-Stop-Shop at the Investment
  Promotion Commission.
• Launch of an investment map on 20/12/2008.

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Investment promotion

• Decree No. 57 of 2004 concerning the
  establishment of industrial cities
• Consist of industrial and residential zones and
  offer all professional, educational, cultural and
  social infrastructures / services
• Damascus / Adra www.a-ic.org/introduction.html
• Aleppo www.aic.org.sy
• Homs http//eng.ic-homs.sy/
• Deir Zzour
• Offer several incentives such as reduced charges
  for electricity
• One-stop-shop on-site where the investor can
  execute all administrative procedures
• Establishment of Free Zones (see
  http//www.freezones-sy.com/english/)

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• Renewable Energies and Electricity
• in Syria

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Renewable Energies and Electricity in Syria

• Syria has a considerable potential for the use of
  renewable energies, specially in solar and wind
  energy.
• In 2003 the government created the National
  Energy Research Center (NERC) to support research
  in the field of energy and to assist the
  government propose renewable energy projects. The
  center has been conducting researches and
  propsing mid-sized projects to the government in
  coordination with UNDP, GTZ, JIACA and other
  active international bodies.
• The state policy opened up to a gradual
  involvement of private investors in the energy
  sector. There are several power houses in
  construction by foreign consortiums, which will
  also run them

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Renewable Energies and Electricity in Syria

• Syria has an electricity agreement with Jordan,
  Libanon and Irak. A connection between Syria and
  Turkey to complete the supply is in planning
  stage. In the long run Syria will play an
  important role also in supplying the region with
  electricity

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Investment opportunities In Syria
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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Investment Opportunities
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Planned Investments 2009 - 2015
SYRIAN GERMAN BUSINESS COUNCIL (sgbc)

• The Syrian Governments long term strategic
  goals for the period 2009-2015 are
• GDP growth rate 9 in average.
• Unemployment rate 7 in average (4 in 2015 ).
• Inflation rate less than 5 .
• Gradual reform of the economic sectors (increase
  the share of the manufacturing industry).
• Continue sustainable economic growth and social
  equity (Distribution equity, living standard,
  health, education, science research).

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Projected Investments 2009 - 2015
SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
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Distribution of private investments 2009-2015
SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
(according to economic sectors)
Agriculture
Mining
Manufacturing
Electricity
Construction
Insurance Finance
Trade Tourism
Transportation
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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Syrian German business council (sgbc)
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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)

• The Syrian German Business Council
• is a non-profit organization
• was created in December 2009 on the basis of
  decree no. 3023, issued by the Syrian Minister of
  Economy and Trade
• was launched in Damascus on the 23rd of February
  2010 in the presence of Dr. Bernd Pfaffenbach,
  State Secretary at the German Federal Ministry of
  Economics Technology, Dr. Abdullah Al-Dardari,
  Syrian Deputy Prime Minister for Economic
  Affairs, as well as prominent Syrian and German
  Businessmen and high-ranking officials
• strives to promote the economic relations between
  the two countries
• offers exclusive services to its members.

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)

• SGBC services
• 1. Business development services
• Customized identification of suppliers and
  potential customers
• Information research in order to evaluate your
  products or services' potential in the Syrian or
  German market and to familiarize with the
  markets business practices
• Support in creating target-specific marketing
  material
• Assistance in preparing your participation in
  international trade fairs
• Support in finding financial resources and joint
  venture partners for investment projects
• Establishing contacts with Chambers of Commerce,
  Business Associations and Professional
  Organizations in Germany and Syria

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)

• SGBC services
• 2. Networking services
• You have innovative products or services with
  good market potential, but that need the backing
  of government bodies and/or a change in
  legislation, mentality, habits? We will get you
  in touch with the right persons to talk to!
• You are planning to attend an exhibition in or to
  do a business trip to Germany or Syria? We will
  contact potential business partners and organize
  meetings with them!
• You are looking for the right partner to realize
  a project or do business with? As SGBC member,
  the high-level business delegations, meetings and
  seminars we host will give you plenty of
  opportunity for efficient and effective
  networking!

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)

• SGBC services
• 3. Activities and events
• For its members, the SGBC organizes at least two
  business delegations per year to Germany.
• For every German business delegation to Syria,
  the SGBC organizes b2b meetings and an official
  reception and/or dinner.
• With the aim of fostering economic cooperation
  between Germany and Syria, the SGBC organizes in
  cooperation with German organizations (GTZ, KfW,
  German Ministry of Economy, Ghorfa, Numov, DIHK,
  BDI etc.) conferences and seminars.

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)

• Our services exclusive for SGBC members
• The SGBC is your privileged partner for
  developing business in Germany and Syria. As SGBC
  member, you are entitled to a panoply of
  specialized services tailored to meet your
  individual needs. Are you interested? Then get in
  touch with us we would be glad to discuss with
  you in which way we can support you!

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SYRIAN GERMAN BUSINESS COUNCIL (sgbc)
Thank you for your attention