INVESTMENT CLIMATE AND REFORMS IN SYRIA SYRIAN GERMAN BUSINESS COUNCIL (SGBC) 1.

INVESTMENT CLIMATE AND REFORMS IN SYRIA

SYRIAN GERMAN BUSINESS COUNCIL (SGBC)

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S Y R I APopulation: 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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DEVELOPMENT OF THE SYRIAN ECONOMY

AND INVESTMENT CLIMATE

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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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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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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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Improvement of the logistics sector

Involvement of private investors in the management of Syria’s 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

Banking sector

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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.

Energy sector

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Business Environment - Laws & Legislations Issued Laws:

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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 SME’s 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.14


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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Arab World

Bilateral Free Trade Agreements Bilateral Free Trade Agreements and other Trade Protocols

Iran

TurkeyEU

Malaysia

RussiaEastern EU

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FOREIGN INVESTMENT IN SYRIA

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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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Investment promotion

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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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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

o Damascus / Adra www.a-ic.org/introduction.html

o Aleppo www.aic.org.sy

o Homs http://eng.ic-homs.sy/

o 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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http://www.a-ic.org/introduction.html

http://www.aic.org.sy/

http://eng.ic-homs.sy/

http://www.freezones-sy.com/english/

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)

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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.41


SGBC services1. 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 market’s 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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SGBC services2. 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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SGBC services3. 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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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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THANK YOU FOR YOUR ATTENTION

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INVESTMENT CLIMATE AND REFORMS IN SYRIA SYRIAN GERMAN BUSINESS COUNCIL (SGBC) 1.

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