With Cabinet Resolution No. 1596 of 2021, the Higher Investment Council (HIC) approved the executive instructions for Investment Law No. 18, which was issued in May 2021. The most notable part of the law, with regards to housing, land and property rights, was a provision allowing the use of private investment to establish business projects in some areas of Syria that have been damaged by the war.
The Investment Law
In practice, there are two types of projects included under the scope of Law No. 18 of 2021. One type includes those established by a lone investor or by private companies in partnership with public sector entities, other than banks, while the other involves public sector entities offering their properties for investment to the private sector.
Law No. 18 of 2021 restructured the Syrian Investment Agency, giving it the power to propose establishing special economic zones. The private sector can invest in these zones on its own or in partnership with the state in what is known as the “mixed sector.” Law No. 18 also restructured the HIC and tasked it with establishing special economic zones, approving rental allowances for private state properties and allocating land for investors to implement their projects.
The executive instructions
The executive instructions introduced several new definitions to the Investment Law, alongside clarifications for the mechanisms and methods for implementing the law. All together, there were 19 chapters in the executive instructions, containing a total of 68 articles.
Some notable points from the executive instructions include the following:
State-owned private properties: The instructions define state-owned private properties as any real estate that belongs to administrative units or to any public entities, whether owned by those entities or supervised by them. This new definition broadens the scope of state-owned private properties. Previous laws in Syria limited private state property to real estate not intended for the public benefit though it belongs to the state in its capacity as a legal entity, whether such property is actually at the state’s disposal or is at the disposal of other individuals.
Investment safeguards: The instructions placed limits on the power to place precautionary seizures on projects and their assets via the judiciary. Expropriation for the public benefit is permitted, albeit in exchange for a “fair compensation” that is determined by the current value of the property on the date of the expropriation.
Establishing an economic zone: Under both Law No. 18 and its executive instructions, there are three types of economic zones: development zones, specialisation zones, and privately owned zones. The economic development zone is the one that poses the greatest danger to HLP rights; this is an administrative area that is considered an investment zone for development purposes, for real estate development purposes, or for purposes of reconstruction if the area was damaged during the war. Economic development zones are established by decree of the HIC, which also defines the zone’s administrative boundaries, the activities permitted within that zone, and the time period for implementation. A ten-member committee chaired by the Minister of Local Administration and Environment supervises the zone. This committee must also prepare a general plan describing the locations of the projects proposed for the zone, as well as a financial schedule. Finally, the committee studies applications to allocate plots of land within the state-owned property to investors and assigns a specified partyfrom the public sector the task of creating general and detailed zoning plans for the area.
Mechanism for allocating land: After establishing an economic zone, the investor asks the HIC to allocate it a specific piece of land. The HIC decides on the request after consulting with the local administrative units, then authorises the use of the private state property allocated for investment. Allocation here means granting the investor the right of usufruct for state land in return for compensation or lease payments.
Amending the organisational description of land allocated for projects: Under Law No. 18 and its executive instructions, it is permissible to change the legal character of land allocated for a project – such as, from agricultural to residential or commercial. Such a change is subject to the approval of local administrative units, as well as whether the investment complies with the new legal character of the project. In addition, the investing party must be the owner of the land slated for the project or have the legal agency to make such changes.
Women not guaranteed safeguards: Neither the executive instructions nor the law itself stipulates any special support for women that would guarantee their economic empowerment or participation in such projects. No seats are allocated to women within the HIC and the Syrian Investment Agency.