Syria’s Council of Ministers has sent a completed draft amendment of Investment Law No. 18 of 2021 to the People’s Assembly for discussion. The amendments aim to address the disparity of investment laws, unify their references, and simplify investment procedures for real estate development.
The most important of these amendments is the one that eliminates the General Commission for Real Estate Development and Investment (GCREDI), which is affiliated with the Ministry of Public Works and Housing. The commission will be replaced by the Syrian Investment Agency (SIA), which is part of the Ministry of Economy and Foreign Trade.
Under the amendment, GCDRI employees will be transferred to the Ministry of Economy, with all their rights and statuses preserved. The Ministry of Public Works and Housing and the SIA are to split GCREDI’s properties, with coordination from the Central Agency for Financial Control. GCDRI funds will be shared between the Ministry of Economy and the SIA. However, technical matters related to urban development projects will remain within the Ministry of Public Works and Housing’s scope.
The General Commission for Real Estate Development and Investment
The GCREDI is an administrative entity with financial and administrative independence. It is linked to the Minister of Public Works and Housing. Its headquarters is in Damascus, though it has branches in the governorates. Real Estate Development and Investment Law No. 15 of 2008 gave the management of the body to a board of directors headed by the Minister of Public Works and Housing. The aim was to prepare policies and general real estate development and investment plans and follow up on their implementation. After consulting with relevant administrative units, the board of directors was tasked with sending its proposals to set up real estate development zones to the prime minister.
Under Law No. 15 of 2008, a real estate development zone may include land inside and outside zoning plans. It can be acquired from state property, property of an administrative unit, land belonging to development companies or from private individuals. The executive instructions for Law No. 15, issued by the Prime Minister in Decree No. 5410 of 2009, stipulated that informal housing areas may be addressed by declaring them real estate development zones regardless of their surface area.
The Investment Agency
Real Estate Development Law No. 25 of 2011 will be modified per the new amendments. The phrase “Syrian Investment Agency” will replace the “General Commission for Real Estate Development and Investment,” while the Ministry of Economy and Foreign Trade will replace the Ministry of Public Works and Housing.
It is unclear what will happen to Real Estate Development and Investment Law No. 15 of 2008. Some official statements suggested that it may be repealed, while others said it may be integrated with Investment Law No. 18 of 2021. The amendments also indicated that all the ongoing development and investment zones would become subject to the 2021 law.
Law No. 18 of 2021 reshaped the Syrian Investment Agency, giving it the authority to propose the establishment of special economic zones. These areas are open for investment by the private sector or public-private partnerships. This law also reshaped the High Investment Council and tasked it with creating special economic zones, approving rental allowances for privately owned state property, and allocating land for investment projects.
Also, under the recently proposed amendments, a representative from each of the following entities have been added to the Syrian Investment Agency’s board of directors: the Ministry of Public Works and Housing, the Regional Planning Commission, and the Planning and International Coordination Commission. Previously, this board only included representatives from the Ministry of Finance, the Ministry of Social Affairs, the Ministry of Local Administration, and the unions of chambers of commerce, industry, agriculture, and tourism.
New tasks related to real estate development have also been added to the responsibilities of the Syrian Investment Agency board of directors. These responsibilities include:
- approving the system for carrying out real estate development and assessment work based on an SIA proposal;
- proposing to secure real estate or portions of real estate needed to establish real estate investment and development zones from privately owned state property located either within or outside of zoning plans;
- deciding on the classification of projects; defining the foundations of projects that have a social dimension and altering them when needed;
- proposing a list of facilities and other advantages for such real estate investment and development projects;
- approving licences for real estate development and investment companies and real estate developers;
- and revoking such licences if their conditions are violated.
Real estate developers
The proposed amendment to Law No. 18 gave real estate development companies a one-year deadline to settle their statuses with the High Investment Council, which can be extended once. A real estate developer is an executive company licensed and registered by the GCREDI. It has a direct relationship with rights holders in a real estate development zone, rather than those rights holders having a direct relationship with the state.
Under the newly proposed amendments, imported construction materials needed to implement licensed real estate development and investment projects are exempted from all customs fees so long as the value of these imports does not exceed certain percentages.
Revoking licences from development companies
In late November, the SIA announced that it had revoked the licences for some real estate development companies and investment approvals for some real estate development projects, which it described as “not serious.” The Ministry of Public Works and Housing had already cancelled some 38 licences for real estate development companies by mid-2022 as the companies had not completed the necessary procedures or payments.