In light of the recent changes in Syria, an important question arises regarding the expansion of foreign businesses in the country: Is it better to open a branch of a foreign company or establish a completely new company in Syria?
Legal and Administrative Ease: Opening a branch of a foreign company is easier than establishing a new company, as it does not require the creation of a new legal entity. The branch is considered a direct extension of the parent company abroad.
Control and Direction: The branch is subject to direct supervision by the parent company, which means it is restricted in some local decisions.
Costs and Taxes: Foreign companies that open branches in Syria are subject to income tax on profits earned in the Syrian market. However, the branch may benefit from some tax breaks if it is designated as a temporary activity.
Complete Flexibility: Establishing a new company in Syria provides greater freedom in making operational decisions, and it is considered an independent legal entity.
Legal Obligations: A Syrian company fully owned by a foreign company must comply with local tax laws, such as income tax and registration fees, and adhere to all Syrian economic regulations.
Long-Term Investment: Companies seeking sustainable expansion in the Syrian market may find that establishing a new company is the best option, especially in the case of partnerships or future expansion into various sectors.
Syria offers a tax environment that encourages foreign companies, but there are differences between opening a branch of a foreign company and establishing a new company:
Taxes on Profits: In both cases, foreign companies are subject to income tax on profits in Syria. However, companies that open branches may face greater restrictions on repatriating profits abroad.
Taxes on Remittances: If the company is new, it is entitled to repatriate profits after paying taxes, while a branch may face difficulties repatriating profits.
Foreign companies seeking to expand into the Syrian market should consider that the Syrian tax system may undergo further changes in the coming years. The new tax system is expected to be implemented in Syria in 2026, which could significantly impact the decisions of foreign companies.
For any inquiries about establishing companies in Syria, contact us directly.
