Is Syria Open for Business?

Due Diligence in M&A Transactions

The marked easing of economic sanctions on Syria following the fall of the Bashar al-Assad regime in December 2024 is ushering in a new era of potential for foreign investment in the country. In this second edition of our series, “Is Syria Open For Business”, we look at some of the key aspects of due diligence in M&A transactions in Syria that are coming to the fore in the early days of the post-Assad era. 

At a glance:

• Syria’s history of sanctions, as well as a complex and evolving legal and regulatory landscape amidst its recent regime change, make it a uniquely challenging jurisdiction for foreign investment.
• Targeted due diligence on Syrian entities is particularly important to ensure investors in Syria, both current and prospective, are fully-apprised of nuanced risk items that may materially impact transactions with a Syrian nexus.
• These can include legacy issues involving businesses with foreign shareholders having historical fines, penalties and restrictive conditions attached to them, as well as a high propensity for business integrity issues.
• Early engagement with Syrian counsel, as well as putting in place arrangements for representation of companies and their international shareholders on the ground in Syria, are key to obtaining effective solutions to such issues so as to progress transactions in Syria. 

International interest in Syria as a place to invest again is growing, with Saudi Arabia announcing in July 2025 that it will invest more than $6 billion as part of its efforts to support Syria in its post war recovery.[1] Syria has also recently announced similar deals with Turkey and Qatari investors for the development of power generation projects and gas supply to Syria.[2]

On the other side of the equation, there are international investors who, having been unable to divest of their Syrian interests in over a decade, are now eyeing an opportunity to realise value which seemed like wishful thinking only last year.

Whilst this uptick in interest in deal-making in Syria is a positive sign, the country’s complex regulatory environment, history of sanctions, and the presence of politically exposed persons make it a uniquely high-risk jurisdiction when considering foreign investment. Add to that the fluidity of the legal and regulatory landscape in the wake of its regime change, and it is not difficult to see both the potential business opportunity and the potential headaches for investors in Syria, prospective and current. 

In this blog, we consider a couple of key learnings on the approach to specific areas of due diligence and, crucially, early engagement in respect of nuanced risk items that are of particular importance to deliver a successful outcome in transactions with a Syrian nexus.

Dealing with legacy issues – getting ahead of the game

Given the lengthy period Syria spent in the wilderness of blanket international sanctions, international investors were left severely limited in their ability to deal with their interests in Syria. As a result, it is not uncommon for due diligence on Syrian targets, particularly in regulated sectors, to uncover legacy issues, which can be concerning from a risk perspective. These may include the imposition of: 

• sizeable (but unpaid) historical fines and/or penalties; 
• onerous licence conditions on licence-holders, including in relation to renewal or extension; and/or 
• judicial measures, known as guardianship, empowering usually local shareholders to dictate the affairs of Syrian companies to the exclusion of other, usually international, shareholders.

In many cases, these measures were put in place where a Syrian business has or had an international investor from a country who previously imposed sanctions against the Assad regime and/or on the basis that the international party has been unable to participate in the management and affairs of the Syrian company due to international sanctions. 

Given the regime change, investors both current and prospective are scrambling to understand whether these liabilities or conditions will or may be enforced and how such limiting judicial measures may, in practice, be lifted. Without answers to these questions, which involve legislation and legal processes that have not been tested for some time, transactions in Syria can be altogether less attractive, if feasible at all. 

It is therefore vital when exploring transactions in Syria to put in place the groundwork for identifying and solving issues such as these from the outset – both in order to get a clear understanding of such legacy issues and the route to obtaining a workable solution to them, as well as to ensure the transaction moves forward on a timely basis.

Business integrity due diligence – beyond the balance sheet

In addition to the challenges posed by such legacy matters, Syria’s complexities also shine a light on the importance of undertaking robust business integrity due diligence (BI DD) when considering an investment in the country. 

There are a number of recent examples where insufficient anti-bribery and anti-corruption due diligence in Middle Eastern transactions has led to billion-dollar write-offs and reputational damage for international investors. In several cases, acquiring a company’s inherited liabilities due to the target’s prior misconduct – ranging from bribery to regulatory breaches – has resulted in enforcement actions and shareholder litigation.

In Syria, where informal networks and state-linked actors often dominate commercial activity, BI DD may sensibly go beyond standard compliance checks. Investors may also consider:

• Mapping of beneficial ownership to identify links to sanctioned individuals or entities.
• Review of procurement and licensing pathways, especially where government approvals are involved.
• Assessment of human rights risks, including labour practices and community impact.
• Evaluation of historical disputes, such as asset seizures or politically motivated litigation.

The risks are not theoretical, particularly where M&A transactions in a context like Syria’s will often involve interactions with governmental and regulatory bodies, increasing the likelihood of exposure to bribery and corruption risk. Without robust due diligence, acquirors may face successor liability – being held accountable for the target’s past violations under both domestic and foreign laws.

For international investors, especially those with exposure to cross-border regulatory regimes, the lesson is clear: business integrity due diligence in the Syrian context is not a box-ticking exercise. It is a strategic imperative. A robust BI DD framework – tailored to the Syrian context – can help mitigate legal, reputational, and operational risks while demonstrating a commitment to ethical business conduct.

Final thought – getting ahead on transactions in Syria

It is clear that international investors in Syria in the short-term must be prepared to work through its unique risks and challenges, many of which have not been tackled from a legal perspective in a considerable period of time.

With that in mind, our key pointers on getting ahead on transactions in Syria:

• Whether buying or selling, parties should engage international and Syrian counsel early to assist with comprehensive due diligence that caters for the idiosyncrasies of doing business in Syria. 
• Parties should put in place adequate powers of attorney and authorisations to allow Syrian counsel to represent them and, in the case of sellers, the Syrian entity/ies  on the ground before governmental, regulatory and judicial bodies – this is where the comfort in relation to legacy issues will most likely be obtained.
• Be aware that, at the time of writing, the Syrian consular network is not fully-operational and so customary legalisation routes may not be available – Syrian counsel can advise on the routes that are being accepted on the ground in Syria at the relevant time.
• Be prepared to revisit solutions – the situation on the ground is evolving all the time and may require parties to transactions to be both nimble and flexible in order to get a deal done.

[1] Saudi Arabia Pledges to Invest More Than $6 Billion in Syria - The New York Times

[2] Syria signs $7 billion power deal with Qatar's UCC Holding-led consortium | Reuters; Turkey to provide Syria with 2 billion cubic metres of gas annually | Reuters