The Syrian Government has issued Law 56 allowing for the establishment of investment banks in Syria by mid-2010. The enactment of this law is in line with the need for financing large investment projects and filling in the financing gap for infrastructure projects.
Licensing requirements, procedures and applications are subject to the provisions of Law 28 of 2001 on conventional banks and the investment bank licence is issued by the Council of Ministers subject to the recommendation of the Credit and Monetary Council.
The minimum capital required for licensing such banks was set at £S20 billion (around $426 million) which is to be paid in full before launch of operations. Non-Syrian founders shall pay their contribution in hard currency while Syrian founders shall pay in local currency. All shares shall be nominal and accessible for circulation except for those owned the public sector. As per the recent amendment of the Company Law (by Legislative Decree 29 of 2011), the nominal value of each share shall be £S100.
Founders of the bank should own a minimum of 25% and a maximum of 75% of the capital upon application for licensing, while the remaining portion is to be offered through an IPO.
Similar to conventional banks, no natural person can own more than 5% of share capital, while the ceiling for non-financial legal entities was set at 10% and at 25% for financial legal entities. The Council of Ministers was given the right to relax foreign ownership restrictions, set at 60% of the total capital share, beyond the limits set in Law 28 of 2001 and its amendments. The Council of Ministers can also increase the stake of a single legal entity shareholder, regardless of its nationality, to up to 49% of the capital share, provided such shareholder is a reputable investment bank.
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