Presentation on theme: "SYRIAN GERMAN BUSINESS COUNCIL (sgbc)"— Presentation transcript:
1 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) Investment Climateand Reforms in Syria
2 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) Population: 21 millionArea: 185,180 km2GDP: 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-ArabiaRich cultural heritageReligious diversity(Sunni Muslim 72%; Alawi Muslim 14%; Christian 12%; Shia Muslim and Druze minorities)
3 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) Structure of Syrian GDP
4 And investment climate SYRIAN GERMAN BUSINESS COUNCIL (sgbc)Development of theSyrian economyAnd investment climate
5 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 comprises important reforms for creating a social market economy which is explicitly oriented on the German concept of “Soziale Marktwirtschaft”→ already numerous positive resultsFor 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.
6 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.
7 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 IMFReduction 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 LawsLaunching of the Damascene stock exchange in 03/2009
8 Improvement of the logistics sector SYRIAN GERMAN BUSINESS COUNCIL (sgbc)Improvement of the logistics sectorInvolvement 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 countries)Starting 05/2010 weekly RO/PAX-connection Venezia -Tartous (SY) – Alexandria (EG) for goods and passengers by Venezia Logistics; Venezia – Tartous 68h
9 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) GDP Growth RateAverage annual GPD growth of 5.2% betweenEstimated GDP growth of 5.8 % for 2009.
10 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) InflationInflation during the period 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.
11 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) Banking sectorTo 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 ; 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.
12 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) Energy sectorEnergy consumption +8% / year due to ecomonic development and population growthNeed for more power stations and alternative energy sources → Opening up of the sector to foreign companiesTwo 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 mw.Objective: to generate up to 2,500 mw of power from wind by
13 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) Business Environment - Laws & LegislationsIssued Laws:Anti dumping law.Decree of exemption certificates of origin belonging to the national origin of goods imported from the Greater Arab Free Trade Area of consulate ratification.Domestic production protection law.Intellectual property law.Investment decree no 8.Investment Agency establishing decree no 9.Establishing Exports Development and Promotion Agency law.Islamic banks decree.Digital Signature law, law on Electronic Communications.Insurance and reinsurance companies decree.Competition and Anti-Monopoly law.Money laundering law.Companies law.Stock exchange board creation decree.Food law.Trade law.Registration for the branches and agents of foreign companies law.Free zones and industrial cities decrees.Real estate development law.Provisions of the confidentiality banking profession decree.
14 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) Business Environment - Laws & LegislationsLaws and legislations to be issued in the near future:Patent law.Electronic trade law.Establishing fund for merchants retirement.Improvement of Export / Import Procedures.Facilitating SME’s licensing law.Enforcement of Contracts and Property Rights.Training of Commercial Lawyers and Establishment of Commercial Courts.Reform of commercial Courts.Anti fraud law.Labor law.Public private partnership law.
15 Holdings Establishing a number of Holdings in Syria: Cham Holding Souria HoldingSyrian-Qatari Holding CompanyConstruction Products Holding Company (CPC)Bahraini-Syrian Holding Company (unnamed until now)Kuwaiti United Company for InvestmentKuwaiti Syrian Holding CompanyCastle Invest HoldingAl-Mashrek-Fund
16 Bilateral Free Trade Agreements and other Trade Protocols SYRIAN GERMAN BUSINESS COUNCIL (sgbc)Bilateral Free Trade Agreements and other Trade ProtocolsEastern EURussiaTurkeyEUIranArab WorldMalaysia
17 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) Foreign Trade(Billion USD)2000 – 2009Overall Syrian exports grew by nearly three times (3.2 times).Overall Syrian imports grew by more than four times (4.7 times).
18 Syrian Exports 2008 (mainly agricultural / food products and textiles) Arab Countries (especially Iraq) 40%Others 12%America 3%
19 Syrian Exports 2008 (in million USD) SYRIAN GERMAN BUSINESS COUNCIL (sgbc)Syrian Exports (in million USD)Material2005200620072008Growth ratefuel3664604442947739,2%Animals & vegetables710693641104042%Manufactured goods3603941222152962,1%Manufactured materials1902401270146799,2%Non- manufact. goods211025534761978-22,6%Chemical materials9020253862592,6%Machines260382519586117%Raw non edible materials299332-7,6%Drinks and tobacco60676911023,3%Total Exports9.22410.97912.58814.69916,8%
20 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) Syrian Imports 2008Arab Countries 20%Other Countries 16%Asia18%America 5%EU Countries 25%Eastern EU 17%
21 Syrian Imports 2008 (in million USD) SYRIAN GERMAN BUSINESS COUNCIL (sgbc)Syrian Imports (in million USD)Material2005200620072008Growth rateFuel527268831294906110%Animals & vegetables195323212428321618%Manufactured goods181421652450256212%Manufactured materials106512841297170417%Non- manufactured goods9969941236149614%Chemical materials41248346555911%Machines1992042022000,1%Raw non edible materials728211717,3%Drinks and tobacco5314441615-95,6%Total Imports10.92111.55114.88218.71119,6%
23 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) Syrian-German TradeGerman exports to and imports from Syria in Mrd. €
24 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) Syrian German Trade
25 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) Foreign investment InSyria
26 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) Foreign Direct InvestmentFDI into Syria has significantly increased during the period
27 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) Foreign Direct Investment50% of total FDI inflow to Syria has been attracted to tourism, 17% to oil exploration/production, and 13% to bankingInvestors mainly from Gulf countries and Turkey (industrial projects in and around Aleppo)German investors: Henkel, Knauf
28 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) Investment promotionDecrees 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).
29 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) Investment promotionTax and fiscal reformsTax and fiscal reforms spurred growth of the private sector investments (34 new laws and decrees since ).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 incentivesDynamic tax deduction
30 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) Investment promotionLegislative 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.
31 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) Investment promotionDecree No. 57 of 2004 concerning the establishment of industrial citiesConsist of industrial and residential zones and offer all professional, educational, cultural and social infrastructures / servicesDamascus / AdraAleppoHomsDeir ZzourOffer several incentives such as reduced charges for electricityOne-stop-shop on-site where the investor can execute all administrative proceduresEstablishment of Free Zones (see
33 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
34 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
35 Investment opportunities SYRIAN GERMAN BUSINESS COUNCIL (sgbc)Investment opportunitiesIn Syria
36 Investment Opportunities SYRIAN GERMAN BUSINESS COUNCIL (sgbc)Investment OpportunitiesAgricultureTourismTechnology & CommunicationEducationHealthOil & MineralsTransportationFinance & BankingIndustryTarget SectorsPower Generation§ Agriculture§ Food Industry§ Tourism§ Electricity§ Oil and Minerals§ Textile Industry§ Communication§ Maritime, air, land and railway transport§ Non-metal industry§ Chemical Industry§ Training field§ Technology & educational§ Metal Industry§ Financial and banking field§ Health
37 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) Planned InvestmentsThe Syrian Government’s long term strategic goals for the period 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).
38 Projected Investments 2009 - 2015 SYRIAN GERMAN BUSINESS COUNCIL (sgbc)Projected Investments
39 Distribution of private investments 2009-2015 SYRIAN GERMAN BUSINESS COUNCIL (sgbc)Distribution of private investments(according to economic sectors)AgricultureMiningManufacturingElectricityConstructionInsurance & FinanceTrade &TourismTransportation
40 Syrian German business council SYRIAN GERMAN BUSINESS COUNCIL (sgbc)Syrian German business council(sgbc)
41 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) The Syrian German Business Councilis a non-profit organization;was created in December 2009 on the basis of decree no , issued by the Syrian Minister of Economy and Trade;was launched in Damascus on the 23rd of February 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.
42 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) SGBC services1. Business development servicesCustomized identification of suppliers and potential customersInformation research in order to evaluate your products’ or services' potential in the Syrian or German market and to familiarize with the market’s business practicesSupport in creating target-specific marketing materialAssistance in preparing your participation in international trade fairsSupport in finding financial resources and joint venture partners for investment projectsEstablishing contacts with Chambers of Commerce, Business Associations and Professional Organizations in Germany and Syria
43 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) SGBC services2. Networking servicesYou 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!
44 SYRIAN GERMAN BUSINESS COUNCIL (sgbc) SGBC services3. Activities and eventsFor 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.
45 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!
46 Thank you for your attention SYRIAN GERMAN BUSINESS COUNCIL (sgbc)Thank you for your attention