Turning the other cheek – Recent developments for Syria create optimism and opportunity for businesses to return, but risks remain

Recent developments 

On 13 March 2025, an interim constitution was signed, which is set to be in place for a five-year transitional period, with the first legislative vote since the Assad regime’s collapse now announced for September 15-20, 2025. Whilst the new technocratic cabinet comprises ministers from diverse ethnoreligious backgrounds, nine of the 23 ministers are affiliated with HTS who control the key ministries, indicating that the group will maintain significant influence over the most important issues. We note that the formulation of the new People’s Assembly is in its early stages.

In an effort to distance itself from the former regime and its civil war allies, the transitional government is seeking new suppliers and partners to enter the Syrian market across a variety of sectors. Encouraging for investors is the recent lifting of many EU, UK and US sanctions against Syria phased between February and June 2025. This has been characterised by the delisting of state-affiliated institutions to facilitate economic recovery, whilst continuing to target the Assad regime and the illicit captagon trade. Further to this, the diplomatic relationship between the UK and Syria was re-established in early July, following the foreign secretary’s first visit to Syria in 14 years.

What does this mean for businesses?

The opportunities are abundant and being snapped up at pace, with Syria looking both East and West.

A former EU diplomat with extensive experience in Syria told us that it is in the interest of European leaders to invest in Syria, in the hopes of encouraging the return of refugees. In this context, he believed that “as long as there is some perceived stability, funds will be made available by the EU.”

In May 2025, Syria’s 15.5 million dollar debt with the World Bank was cleared by Saudi Arabia and Qatar. This has reinstated the country’s eligibility to receive funding from the bank, indicating the potential for large-scale development projects. Already, infrastructure has been an important sector looking for investment. Key grants and deals to highlight include: a 7 billion dollar deal signed in May 2025 to develop power generation facilities led by the Qatari UCC Holding; an 146 million dollar grant given by the World Bank in June 2025 to restore electricity infrastructure; and a 30-year deal signed in July 2025 valued at 800 million dollars for the development of Tartous Port by the Emirati DP World. Saudi Arabia has also pledged to invest billions in the country during a recent visit. These agreements create opportunities for businesses operating in the energy, construction, logistics, technology and commodities sectors.

Syria’s fuel crisis worsened when Iran ceased its supplies of crude oil after Assad was removed. Whilst tenders were issued in January 2025, major international traders were largely deterred by sanctions and other operational risks, leaving the government to rely on Russian products, as well as support from Turkey and Qatar. With the easing of sanctions, Syria will likely be looking for alternatives. In April 2025, Syria’s Banias refinery in the Tartous governorate resumed production, with its first export taking place on 16 June 2025. This indicates that Syria is actively seeking to re-establish itself in the energy market, including attracting new suppliers as well as exporting its own refined products.

The financial sector is another that is seeing increased interest. Following the removal of sanctions from banks, including the Central Bank of Syria, international bank transfers are beginning to resume, and many major banks are considering corresponding banking relationships in Syria. Financial restrictions, especially on those trading in and exchanging foreign currency, have also eased within the country. Notably, the new government has expressed a desire to introduce a new currency once it stabilises. A Lebanese investor with strong ties to Syria told us that “it will take time to rebuild trust” in the financial sector, adding that whilst the Damascus Stock Exchange reopened in June, “significant activity isn’t expected just yet”.

Businesses looking to enter the Syrian market have a lot to look forward to, but risks remain and caution needs to be exercised.

• Whilst the easing of sanctions has been positive, Western powers have been cautious and caveated that there is scope for future sanctions if necessary. Some suspensions are conditional and subject to expiry dates. The Sanctions Accountability Act of 2025, which would more formally revise the US sanctions framework, is currently under review.
• A formal framework for public procurement is yet to be implemented, increasing the risks surrounding the use of middlemen to access the relevant government decision-makers.
• Some high-risk actors and entities, including those from the Assad era, form part of the new Syria. As such, understanding the reputational, legal and regulatory risks associated with local partners is essential.
• Finally, the new government is facing both internal and external security threats. Recent eruptions of violence in Sweida, followed by Israeli strikes targeting Damascus and the south of Syria, have for now been settled by a ceasefire agreement. With the situation fragile, such threats, and pressure on the government to control them, could undermine their impressive strides to rebuild Syria and attract new business.

At Risk Advisory, we are well-placed to cut through the noise and provide real-time insights into Syria’s ever-changing landscape. We have extensive experience navigating business and political risks in complex environments and across a diverse range of sectors. From sourcing and investigating potential partners to mapping out legal, regulatory and sanctions frameworks. 

Our in-house experts, Julian Warczinski, Head of Global Commercial Intelligence; Huw Charles, Associate Director; George Garrett, Senior Associate; and Alice Ede, Associate, have advised clients on Syria and the wider region for many years, particularly on market re-entry strategies, sanctions compliance, and partner due diligence. We’d be more than happy to discuss any of this further if it’s of interest.