Investment Incentives and Exemptions in Syria

Anyone weighing a project inside Syria asks four questions before any others: what is exempt, at what rate, for how long, and what causes an exemption to be lost. This article sets out what Investment Law No. 18 of 2021 and its executive instructions issued by Decision 1596 state on those four questions, and then sets out, with the same clarity, what the text does not say.

Everything below hangs on the investment licence — the document issued by the Investment Authority to a project, and the entry condition for the entire incentive regime. Without it, none of what follows applies.

Before the numbers: two texts we do not have

Two constraints precede every figure in this article, and they belong here rather than in a footnote:

• The copy: the version of Law 18 and its instructions in our hands is published on the Homs investment portal, not in the Official Gazette, and we do not know when that published copy was last updated.
• The amendments: Law 18 has been amended at least twice — by Law No. 2 of 2023 and Decree No. 114 of 2025 — and we have read neither. The copy of Decree 114 that reached us is a scan with no readable text layer, and Law 2/2023 is not in our files at all.

That second constraint weighs more heavily here than on any other topic, because rates and durations are typically the first thing amended in investment legislation. Read every figure in the table below accordingly: this is the rule as it appears in the 2021 text, and the text has been amended twice that we have not seen.

Where the incentives sit in the text

A common citation error is worth clearing up first. The incentives are in Chapter Seven of the Law (Articles 20–24), while Chapter Eight of the Law covers economic zones. In the executive instructions, the incentives are in Chapter Eight (Articles 26–30). That mismatch of chapter numbers between the two texts is the source of a great many mis-citations.

The customs exemption: the rule and its reach

Article 20/a of the Law exempts machinery, production lines and non-tourism service vehicles from all customs duties, financial fees and non-customs surcharges, on condition they are used exclusively in the licensed project.

The instructions add three details that change how the cost is calculated:

• The exemption covers the income-tax advance collected at customs deposits, which appears in the balance sheet under fixed assets (Art. 26/a/1).
• The exemption runs for the life of the project, extending to development, expansion, and replacement of items lost for reasons outside the investor's control — so it is not a window that closes at establishment (Art. 26/a/2).
• On a partial disposal of exempted assets, the amount is settled proportionally with depreciation deducted, and the useful life is fixed by a decision of the Minister of Finance in coordination with the Minister of Industry (Art. 26/a/3).

Articles 29/a and 29/b of the instructions widen the customs exemption to machinery that is new, refurbished or used, subject to each sector's controls, and to goods imported by agents or trading companies on behalf of the licence holder, under controls set by the Minister of Economy in coordination with the Central Bank.

Article 26/c of the instructions lists three documents for obtaining the customs incentive: the investment licence; a letter from the relevant ministry with the list of requirements and a statement of conditions; and an import licence endorsed by the Directorate of Economy and Foreign Trade with a stamped list attached.

The three tourism ceilings

Tourism projects receive capped customs treatment rather than a full exemption. Under Article 20/b of the Law and Article 26/b of the instructions: 50% for international-standard and deluxe-grade projects; 30% for first and second grade, conditional on no comparable local equivalent existing; and 30% for rehabilitating damaged facilities, by decision of the Supreme Council for Investment. Commercial retail units are excluded from these ceilings.

The five tax incentives

Five categories of income-tax reduction, each with its own rate, duration and condition:

The ten activities in the fourth category are: local content of at least 50%; value added of at least 40%; high technical content; medical industries and human and veterinary pharmaceuticals; renewable energy; waste recycling using environmentally friendly technologies; agricultural and livestock processing; patents; sorting and packing of agricultural produce; and craft enterprises.

How "local content" and "value added" are measured in figures is referred to decisions of the Ministry of Industry by Article 28/b of the instructions — meaning the 50% and 40% thresholds are assessed by a methodology that is not in the law itself.

The employment reduction, and the figure that circulates reversed

Alongside the above, Article 21/e of the Law and Article 27/e of the instructions provide an additional reduction for five years: 5% for every one hundred Syrian workers registered with social insurance, capped at 15%.

A note on transcription rather than interpretation: linear text extraction from the investment-law file reverses digit order on some lines, which is why the rate and the cap appear swapped in many secondary accounts. The reading given above comes from a coordinate-based extraction of the law's text and from the instructions, where both figures are spelled out in words rather than digits.

What voids an incentive

Three provisions reduce or cancel the benefit:

• Machinery previously in local use: Article 21/f of the Law and Article 27/f of the instructions state that industrial projects established with used or refurbished machinery already placed in local consumption before the application date do not qualify, while projects using new machinery imported through a commercial agent do.
• Extension of the establishment period: the Law states in Article 37/c, confirmed by Article 51/b of the instructions, that any extension granted is deducted from the tax exemption period — delay in establishment shortens the years of relief rather than postponing them.
• Cancellation on breach: Article 24 of the Law and Article 34 of the instructions provide for cancellation of incentives by reasoned decision on breach or on a change to the project's purpose, with repayment of what was exempted within the same year as the breach.

The no-stacking rule

This rule shapes a project's tax structure more than any single rate. Article 21/h of the Law and Article 27/g of the instructions state that the tax exemptions are those set out in this law "and no others." Article 63 of the instructions states that incentives granted under this law preclude benefiting from incentives contained in other laws.

Where more than one ground for entitlement arises within the law itself, Article 27/h of the instructions provides that the project takes the higher reduction — whether earned by location or by nature of activity — except for the employment reduction, which is additive.

Non-tax incentives and the stamp duty

Article 22/a of the Law and Article 30/a of the instructions provide three non-tax incentives that are granted by decision of the Supreme Council for Investment to support a specified sector or activity. In the text they function as an instrument of economic policy activated by decision, not as an entitlement following automatically from a project's profile.

The stamp duty exemption is narrow: Article 22/b of the Law and Articles 30/b and 30/c of the instructions confine it to projects under Article 3/b, subject to three conditions, and it does not extend to projects established by lease or allocation on private state property.

Social responsibility: a deductible expense with a ceiling

Article 21/g of the Law makes social responsibility spending deductible up to 3% of gross profits. Article 31 of the instructions is permissive in its wording — the investor "may allocate a share not exceeding 3% of profits" — and lists environmental, health and educational purposes. Article 32 requires an annual report to the Authority supported by documentation. Article 33/a provides that the categories of spending and the basis on which they are accepted are set by decision of the Council on the proposal of the Ministry of Finance — so whether a given expense is accepted is settled in a decision outside both texts.

Land allocation — and why allocation is not ownership

Article 23 of the Law governs the allocation of real property to investment projects. The definition in Article 1 and in Article 37 of the instructions is decisive: allocation means granting a usufruct right against consideration, a lease, or a partnership — not transfer of title. The distinction matters in any financing model that assumes owned real estate as collateral. Article 23 also requires a regulation to be issued on the basis for using state property; that regulation is not in our files.

What the text does not say

Five gaps bear directly on this subject, and knowing them is part of the picture:

• No minimum figure for fixed asset value or capital — referred to a decision of the Supreme Council by Article 7/g of the Law and Article 4/b of the instructions; that decision is not available to us.
• No numerical definition of "local content" or "value added" — these sit in Ministry of Industry decisions we do not hold.
• No published list of the development and specialised zones actually established — so a reader cannot determine from the text alone whether a site falls inside a development zone, which is what separates 75% from 50%, and entitlement from none.
• No regulation issued on the basis for using state property, notwithstanding Article 23.
• Not a single fee figure in either text — charges are referred to a separate decision we have not seen, and we will not state a figure with no source behind it.

Above all of it stand the first two constraints: the copy we read is published on the Homs investment portal rather than the Official Gazette, and the law has been amended twice by texts we have not seen. What appears above is what the 2021 text states, as we read it.

This article presents what the cited texts state; it is not legal advice.