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10. INCENTIVES AND SPECIAL REGIMES

Several incentives are provided under the Investment Promotion Law, the Income Tax Law and various Legislative Decrees. Incentives are available for companies operating in free zones as well as for certain industrial projects and tourism sector.

Free Trade Zones ('FTZ') Incentives

There are certain free zones in Syria. Industries that use components or raw materials produced in Syria or complement existing industries in Syria or satisfy a local demand or employ a large number of Syrian workers are given priority in establishing operations in free trade zones.

An import exemption may be granted up to 20% of imports to warehouses established in free zones provided they do not compete with local industries or with a state-run monopoly.

Investment Incentives

Certain incentives have been granted under the Investment Promotion Law of 2007. Entities operating in specified industry sectors, such as agriculture, environment, industrial, transport, etc., are eligible for tax benefits granted under the tax laws such as reduced CIT rates (see Sec 8.1.1). Certain industrial development zones are also defined under the Investment Laws.Companies investing in approved investments in economic and social development projects are eligible for following incentives:

  • Import of equipment and supplies used for developing or enlarging the project free of taxes, customs and other duties;
  • 7-year tax holiday for mixed-sector companies where more than 25% is held by the Syrian government or companies which export at least 50% of their products;
  • 5-year tax holiday for private-sector companies
  • Exemption from Syrian foreign exchange control regulations and compliance

Sector Specific Incentives

Tourism Industry

Operators of tourist establishments are eligible for following incentives:

  • 5 to 7 years corporate income tax (‘CIT’) exemption
  • 50% CIT exemption post full exemption period
  • Exemption from customs duty on imports by a hotel or restaurant for specific purposes