Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.
Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Syria. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.
| No. | Procedure | Time to Complete | Associated Costs |
|---|---|---|---|
| 1 | Apply for company name reservation & commercial registration at the Directorate of Internal Trade at the Ministry of Economy and Trade The founders complete a draft of the memorandum of association and present it to the Ministry of Economy and Trade. The Ministry reviews the draft and requests that the founders make changes needed to comply with the law. If no amendments are required, the founders are called to sign the company memorandum before the Director of Interior Trade at the Ministry. Once approved, the founders are given five certified copies, which they should take to the Directorate of Finance for registration upon declaring an address and place of business and paying the stamp duty. | 5 days | SYP 30 |
| 2 | Open a financial record for the company, register for taxes and buy stamps at the tax authority of the Finance Ministry The founders may open a financial record for the company at the Tax and Financial Department. In this procedure, the Tax Department will be informed about the start of business activities. Stamp duty is calculated at 0.4% of the capital amount, and the local administrative fee is calculated at 5% of the Stamp Duty collected. In addition a receipt stamp in the amount of SYP 20 is payable. | 3 days | 0.4% of capital (stamp duty) + 5% of the stamp duty (local administrative tax) + SYP 20 (receipt stamp) |
| * 3 | Publish memorandum of association in the Official Gazette Limited liability companies are required by law to publish the decision of the establishement of the company in the Official Gazette. Payment is to be made to the Official Gazette before obtaining the commercial registration certificate. | 1 day, simultaneous with procedure 2 | SYP 4,000 |
| * 4 | Deposit the initial capital in a bank and obtain a statement The founders are required to deposit initial capital (40% of the capital at the time of registration) before finalizing commercial registration with the Ministry of Economy and Trade. | 1 day, simultaneous with procedure 2 | SYP 300 |
| 5 | Visit commercial registry with the signed copy of articles of incorporation The company will be registered upon presenting the articles of incorporation and the other requested documents, including proof of headquarters (ownership or lease contract of the premises, bank statement for proof of deposit of the company capital, criminal record certificate, no objection letter from the Finance Ministry and the Gazette receipt. | 1 day | SYP 10,000 |
| 6 | Register with the Social Security Organization The company must register its employees with the social security organization within 15 days of employment. The social security organization takes care of pension and worker's compensation. | 1 day | SYP 20 |
| 7 | Make a company seal Though not explicitly cited in Syrian law, the use of a seal is a commercial custom. The official authorities, especially the tax authorities, assume that companies use a seal to authenticate their transactions. Under the Syrian commercial law, commercial custom is considered as a source of commercial law. | 3 days | SYP 500 |