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In this page: FDI in Figures | What to consider if you invest in Syria | Protection of Foreign Investment | Procedures Relative to Foreign Investment | Investment Aid | Investment Opportunities | Sectors Where Investment Opportunities Are Fewer | Finding Assistance For Further Information

 

FDI in Figures

Before entering a political crisis in 2011, Syria was determined to gradually open its economy, moving from a closed and centralized economy to a model close to the market economy. Indeed, between 2000 and 2010, the Syrian legal corpus underwent profound changes. Structural reforms, such as the renovation of the commercial code (2007), the code of the sea (2008), the finance law (2004) and the bank law of 2004, made it possible to phase out the model of the planned economy in effect for decades. The Investment Law has greatly encouraged foreign investment, with measures such as the legalization of full business ownership, the importation of machinery, exemption from customs duties on transport and raw materials. Private investors benefited from a five-year tax holiday (which has been extended to seven years in the case of a joint venture with 25% public sector participation). The establishment of a private banking system and private insurance companies (national or foreign), the opening of the local market with the liberalization of imports (gradual removal of tariff barriers to market access and reorganization of the customs administration with the help of the European Union) are tangible results of the modernization of the country's legislative and fiscal framework. Syria has also created a number of industrial zones providing a favorable framework for foreign companies wishing to set up in the country. However, the civil war which has torn the country apart since 2011 has caused a serious humanitarian and economic crisis that has caused investment to fall. The country is subject to sanctions from the United States and the EU, which limits trade and investment. The Caesar Syria Civilian Protection Act that came into force in June 2020 dissuades any investor from participating into Syria’s reconstruction.

No reliable international data has been published on FDI inflows into Syria since 2012. According to the UNCTAD World Investment Report 2021, the stock of FDI in Syria amounted to USD 10.7 billion in 2020. According to data collected by the Syrian Investment Agency on the stock of FDI between 2008 and 2014, Russia was by far the largest investor in the country (75.8%), followed by Germany with 19,7%; whereas the majority of investments were directed towards the telecommunications, financial intermediation, and electricity sectors. Regarding FDI inflows into the country in the first half of 2016 (latest data available), the total amount was 17 billion SYP (33 million USD) (Syrian Investment Agency).

In its Doing Business 2020 report, the World Bank ranked Syria 176th out of 190 economies, gaining three places compared to previous year's report. Progress has been made in terms of insolvency settlement.

 
Foreign Direct Investment 201920202021
FDI Inward Flow (million USD) 000
FDI Stock (million USD) 10,74310,74310,743
Number of Greenfield Investments* 100
Value of Greenfield Investments (million USD) 3100

Source: UNCTAD, Latest available data.

Note: * Greenfield 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.

 

FDI INLOWS BY COUNTRY AND FDI STOCK BY INDUSTRY

Main Investing Countries 2014, in %
Russia 75.8
Germany 19.7
Palestine 1.2
Turkey 1.0
Main Invested Sectors 2014, in %
Telecommunications 26.0
Financial intermediation 17.3
Electricity supply 11.3
Oil and gas 7.0
Hotels and restaurants 5.9

Source: Syrian Investment Agency - Latest available data.

 
Form of Company Preferred By Foreign Investors
SNC (general partnership): Limited Partnership, Joint Venture.

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What to consider if you 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.

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Protection of Foreign Investment

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.
Member of the Multilateral Investment Guarantee Agency
Syria is a signatory of the MIGA convention.
 
Country Comparison For the Protection of Investors Syria Middle East & North Africa United States Germany
Index of Transaction Transparency* 7.0 6.4 7.0 5.0
Index of Manager’s Responsibility** 5.0 4.8 9.0 5.0
Index of Shareholders’ Power*** 3.0 4.7 9.0 5.0

Source: Doing Business - Latest 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.

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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 Organisation For the Declaration
Syrian Ministry of the Economy
Requests For Specific Authorisations
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.

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Investment Aid

Forms of Aid
The European Union and Syria have started an agreement in 2004 under the aegis of the Euromed program. This agreement should create a free-trade zone for a period of 12 years between the European Union and Syria, and provide a legal frame for European aid intending to improve the political framework, as well as the economic and financial development of the country, especially in the following fields: science, technology, environmental protection, resources exploration, production and infrastructures.
 
 

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Investment Opportunities

The Key Sectors of the National Economy
Oil, industry, banking and real estate.
High Potential Sectors
Syria remains very dependent of a small number of sectors: oil, agriculture and textile.
Privatization Programmes
The government is responsible for promoting foreign investments when it considers it necessary.
Tenders, Projects and Public Procurement
Tenders Info, Tenders in Syria Arab Republic
DgMarket, Tenders Worldwide

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Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors
Government restrictions concerning foreign investment are weak and limited to sectors such as gas, oil, power generation and distribution, airline transportation, port operations, bottled waters and telephone services.

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Finding Assistance For Further Information

Investment Aid Agency
Syrian Investment Agency
Other Useful Resources
Syrian Enterprise and Business Center
Doing Business Guides
Embargoes and sanctions on Syria for businesses in the UK
Embargoes and sanctions on Syria for businesses in the U.S.
 
 
 
 

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Latest Update: November 2022