Syria’s business climate is experiencing a notable turning point. With the collapse of the Assad regime in December 2024, the United States lifted its blanket sanctions in June 2025 and the European Union removed the majority of its economic sanctions in May 2025, marking the most significant relaxation in a decade of western sanctions against Damascus. Despite the significant opportunity for foreign investors, there are still major challenges.
The World Bank estimates that Syria’s economy contracted 83% from 2010 to 2025. The banking system is in a fragile state, currency instability continues, the physical and economic infrastructure is severely impacted, and the system of business regulation is in a state of flux under a transitional administration. The cost of reconstruction is between $250 and $400 billion, and the scale of the work required is beyond the short-term financing that is available.
Understanding The Syrian Banking System
The banking landscape in Syria is limited but also diverse. You can discover state-owned banking, private commercial banks and Islamic banking, all with their unique benefits and limitations:
State-Owned Banks
The Syrian banking sector has historically been dominated by state-owned institutions, including the Commercial Bank of Syria, the Agricultural Cooperative Bank, and the Real Estate Bank. These institutions continue to operate, though their capacity is significantly constrained. Years of conflict, sanctions, limited recapitalisation, and the departure of qualified banking professionals have left the state banking system with limited lending capacity, particularly for private businesses.
Reforms initiated in 2025 aim to recapitalise state banks and potentially privatise selected institutions, introduce banking regulations aligned with international standards, and modernise payment infrastructure. These are meaningful structural intentions, but implementation timelines remain uncertain.
Private Commercial Banks
A number of private commercial banks operate in Syria, a sector that was opened to private participation in 2001. Following the lifting of Western sanctions, several private banks have begun expanding their services and engaging with international correspondents — a critical capability that had been almost entirely severed during the sanctions period. However, access to credit for small and medium-sized businesses through private commercial banks remains limited, credit terms are typically restrictive, and collateral requirements are high relative to the capitalisation of many SMEs.
Islamic Banking
Several Islamic banks operate in Syria, offering Sharia-compliant financial products including murabaha (cost-plus financing), ijara (leasing), and musharaka (partnership-based financing). For businesses where conventional interest-bearing loans are not appropriate, or where the business owner prefers Islamic financial structures, these institutions represent a meaningful alternative. The Islamic banking sector in Syria was relatively well-established before the conflict and has continued to function, albeit with reduced capacity.
International and Multilateral Development Finance
Following the lifting of Western sanctions, significant attention has turned to the potential role of multilateral development banks in financing Syria’s reconstruction. The Atlantic Council and other policy institutions have outlined the case for Syria’s engagement with the European Bank for Reconstruction and Development (EBRD), which has expertise in SME financing, local financial institution support, agribusiness, and sustainable energy — all directly relevant to Syria’s needs.
The Non-Negotiable: Local, Trusted Guidance on the Ground
No financing strategy for a Syrian business should be developed, or executed, without reliable local support. This is not a caution unique to Syria — it applies to any complex, transitional, or emerging market — but it is especially critical here.
Why Local Guidance Is Important
- Current knowledge of which banks and microfinance institutions are operationally reliable and which are not
- Clarity on property and business registration requirements as they currently exist under the transitional government
- Relationships with the relevant government ministries, chambers of commerce, and regulatory bodies
- Understanding of informal business norms, which sectors have government priority, and where bureaucratic obstacles are likely to arise
- Real-time awareness of security conditions across different cities and regions
- Connections to other businesses and investors navigating the same environment — a network that takes years to build from scratch
