International Business: Investment Environment of SYRIA

Submitted to: Dr. Archana Pillai Submitter by: Harshal Gandhi Nishant Rama Rao Sr. No. Particular Detail Syria had developed regional FTA & MFN agreement, which have been largely suspended as trading partners seek to express disapproval of the Syrian regimes violence against protesters GAFTA-Greater Arab Free Trade Agreement - January 2005 - customs duties were eliminated between Syria and all other members of GAFTA (17 Countries) Turkey January 2007 - compromised by retaliatory steps by both parties, given Turkeys reaction to the Asad regimes violent response to the demonstrations Syria is a signatory to free trade agreements with Jordan, India, Belarus, and Slovakia. In 2004 Syria and the EU initialed an Association Agreement; the ratification process had not been finalized as of March 2011, and the EU withdrew its offer following the regimes crackdown on opposition and imposition of EU sanctions. Syria has profoundly changed its legislative and legal base in order to attract foreign investment. The country has set up 8 free zones which allow different production activities and services in the industrial zones. GOFZ (General Organization of Free Zone) has approved 4 more such plans 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. Major amendments made in 1975 Investment Law No 10 The exemption from duties and taxes on the import of a business's requirements in setting up and running the project Tax relief on the operations of joint stock companies for a period of 7 years, other companies up to 5 years The right to open an account in foreign currency at the Commercial Bank of Syria The right to transfer in foreign currency out of Syria the net capital initially invested in the project The annual transfer of profits and revenues in foreign currency The transfer abroad, in foreign currency, of 50% of expatriate workers' earnings and 100% of any compensation awarded at the end of their services Problems with the law limited periods of tax exemption Project Differentiation: The offering of identical incentives to all types of projects Geographical Differentiation: Same incentives everywhere so 56% of the projects are based on Damascus region Limited period of tax exemption

Free Trade Agreement / Most Favored Nation

Domestic Laws related to Trade & Foreign Investment

FDI & Drawbacks

Trade Statistics

globalEDG E Blog: Illegal Internation al Trade in 5 Antiquities (the only blog about Syria on the site) References: http://globaledge.msu.edu/countries/syria http://www.globaltrade.net/international-trade-import-exports/m/c/Syria.html http://globaledge.msu.edu/blog/post/1498/illegal-international-trade-in-antiquities

Syria is 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 is trying to set up the mechanism of a market economy in order to regain the trust of foreign investors. The Syrian economic-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. No clear policy about the limit of the FDI is found Drawbacks The absence of any refinancing instrument for Syrian banks and the explosion of credit in the private sector 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). FDI drastically declined after massive unrest Syria claimed a boom in non-oil exports prior to mid-2011, but its trade numbers are notoriously inaccurate and out-ofdate Not highly dependent on one country to which it exports. (Iraq-18.85%, Germany-12.26%, Lebanon-9.69%, Italy-8.87%, France- 7.58%) Highly dependent on crude oil (30.33%) for export so it is riskier as their production is getting lower every year Import product range is highly distributed The blog talks about how antiques of Syria are contributing hugely to the illegal trafficking of antiques in international markets. Artifacts are stolen & sold in international market for monetary gain, preservation of heritage has been very difficult due to mismanagement, inefficiency of the central government to preserve them, due to ongoing conflict, Syria has experienced devastation of several ancient sites, and many ancient sites are either littered or have bullet shells because of bomb raids and many reasons. 2 major questions raised in the blog are how will future generation ever come to know what really existed? And Since, most frequent evidence presented in property/land rights in international courts are ancient facts, it should be governments best interest to protect indigenous ruins, which government is lacking; why? The government should take best interest in protecting antiques & hence some laws should be introduced which will help in saving antiques & bring down illegal trafficking of antiques in international market for monetary gain.