Syria does not follow a continental or Anglo-Saxon (general) system of law, and definitions and concepts in the Syrian law are difficult to be translated literarily. For example, the term “company” is often used to refer both to a company and a partnership, and the term “partner” refers both to a partner in a partnership and a shareholder in a company. In accordance with the Syrian commercial law, foreign capital may participate in business activity in this country through enterprises of such organizational and legal forms as:

• public company limited by shares
• private company limited by shares
• partnership
• joint venture
• foreign company branch

Public company limited by shares

Public company limited by shares is established by two or more physical or legal persons and characterized as follows:

• majority of shareholders has to be Syrian citizens;
• maximum number of shareholders is not limited;
• minimum charter capital is SYP 50’000 (US$1 is approximately SYP 52);
• company has to reserve at least 10% of its net profit each year until the reserve is 50% of the share capital (however, the annual reserve may not exceed 25% of the company's net profit);
• company may carry out any authorized activities but banks, funds and insurance companies have to obtain appropriate licenses;
• company may offer its shares for an open subscription, and shareholders may sell their shares to third parties without the other shareholders’ approval;
• company is managed by the Board of Directors where Syrian citizens need to hold the majority. The Board has all powers to resolve any issues related to the company’s operations;
• at least two Board members must represent the company’s staff;
• directors are personally liable for any breach of the statutory documents’ provisions and the current law’s regulations;
• The Board of Directors needs to hold meetings in Syria each month. Directors may not vote by proxy or otherwise without being present in person;
• shareholders’ general meetings are supposed to be held in Syria at least once a year.

Private company limited by shares

Private company limited by shares is established in Syria by two or more physical or legal persons and characterized as follows:

• majority of shareholders may be foreign citizens;
• minimum charter capital is SP 25’000;
• company may not carry out banking, stock exchange and insurance activities;
• company may not offer its shares for an open subscription, and shareholders may not sell their shares to third parties without the other shareholders’ approval;
• company may be managed by one director but most of directors should be residents of Syria. Directors have full authority to resolve any issues related to the company’s operations;
• directors are personally liable for any breach of the statutory documents’ provisions and the current law’s regulations.

Partnerships

Foreigners may establish both limited and unlimited partnerships in Syria and hold up to 100% of the company’s capital. No capital is required to be paid for the establishing of a partnership. The partnership’s business name should include a name of at least one general partner. The partnership’s business is managed by general unlimited partners. Partners may not transfer their shares to third parties without the other partners’ unanimous approval.

Foreign Company Branch

Foreign Company Branch is established through registration with the Foreign Companies Agency at the Ministry of Economy and Foreign Trade of Syria. Branch registration data is published in the official Gazette of Syria. There are no special requirements for financing the branch, however, it may not transfer funds abroad without obtaining a prior approval by the Ministry of Economy. Branch must be headed by a resident of Syria.

Foreign investments may not be transferred outside Syria without an approval by the Central Bank, and only 50% of profit from foreign investments may be transferred abroad. Non-residents are not limited in taking currency to Syria, however, in most cases, currency may not be taken outside Syria. When leaving Syria, non-residents may take out only that amount of foreign currency which they have declared in entering Syria. The currency control is performed by the Central Bank of Syria.

Net business profit in Syria generated from professional, industrial and commercial activities as well as any other net profit other than a salary or a profit from transactions with movable and immovable property is subject to business profit tax. The tax is charged at a progressive rate depending on the taxable profit. Public companies and private companies limited by shares pay taxes in Syria at fix tax rates.

Dividends are not subject to withholding tax provided that such dividends are paid from the profit from which the business profit tax has been paid.

There are several free economic zones (FEZ) in Syria. Companies registered in the FEZ may use their resident status within the double taxation agreements in effect between Syria and other countries.

Syria is not a tax heaven or offshore jurisdiction, and a concept of Syria tax exempt company (and/or Syria international business company (IBC), offshore company, trust, foundation etc. registration) does not exist in Syria as such. A company formation in Syria could be arranged with a professional registered agent providing incorporation, virtual office and other corporate services in Syria. To set up a company in Syria is possible by correspondence, but to open a bank account in Syria will, most probably, require a personal visit.

Syria Double Taxation Agreements

Cyprus, Czech Republic, India, Romania, Slovak Republic. Syria is also a party to the Agreement for the Avoidance of Double Taxation and Prevention of Tax Evasion between the States of the Arab Economic Union Council.

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