Syria

Corporate Entities

The legal basis for shareholding companies is the Syrian Commercial Law as contained in Legislative Decree No 149 of 1949. ‏

Shareholding companies have become more common in recent years. Since the late 1980’s a number of joint ventures between ‏the government and private sector have been established as shareholding companies. It has been particularly common form of incorporation for entities established under Investment Law No 10. ‏

Registration should occur within one month of the establishment of the business and a license to operate must be obtained from the Ministry of Industry. Companies should have five founders and a minimum capital of 50.000 Syrian pounds. ‏

Applications should be made to the Ministry of Supply and Interior Trade. A memorandum of association must be submitted: On receiving approval to incorporate from the Ministry of Supply and Interior Trade, the company’s articles of association are published the Official Gazette. ‏

Companies founded by foreigners, or with foreign participation, require permission from the Ministry of the Economy and Foreign Trade. Public share offers must be announced in at least two national newspapers. ‏

Subscriptions are carried out through local and foreign banks authorized by the Commercial Bank of Syria. Founders are given 60 days to raise 75% of the total capital offered. If subscriptions do not reach this target then an additional 60 days may ‏be given by ministerial decree. Subscribers must pay a minimum of 5% of the total value of the shares in advance. The balance is paid according to the memorandum of association. ‏

Reserves of 10% of annual profits must be set aside. They may cease when the reserves reach 50% of the company’s total share capital. ‏

Additional reserves of no more than 25% of annual profits up to a 100% of the value of the share capital may also be set aside. ‏

The management or board of directors of a shareholding company is elected by the annual general meeting. The number of directors (no more than seven, no less than three), their tenure and procedures for elections and dismissal, are to be specified in the articles of association. Within a week of election the board must elect a chairman and deputy. Any limits to the board’s authority are to be laid down in the articles of association. The board must meet on a monthly basis. Public shareholding companies must have at least two company employees on the board. In companies with state participation, public sector representative obtain seats on the board in proportion to the state’s holding of share capital.‏