Is Syria open for business? People considerations for growing businesses

Executive summary

• Decide whether to engage talent as employees or contractors, considering local legal risks.
• Ensure compliance with Syrian employment laws, in particular on working hours, wages, and health and safety.
• Provide required benefits and consider extra incentives, such as hardship allowances and, for certain senior or key employees, equity awards.
• Foster a strong company culture and address cultural and communication challenges.
• Understand termination rights and obligations and ensure enforceability of post-termination restrictive covenants.

Introduction

As Syria begins to open up to international investment, many companies are exploring opportunities to establish a formal presence in the region. While the potential could be significant, as with any jurisdiction, doing business in Syria will require HR and legal teams to consider a variety of factors when it comes to hiring, retaining, and supporting members of staff. This blog outlines some of the key people-related issues that companies should consider when entering the Syrian market. Local legal advice should always be sought. 

Compliance with local employment laws and consideration of hiring strategies

Companies expanding into Syria must prioritise understanding local employment laws, which will often include working time, minimum wage, and health and safety standards. Where applicable, adhering to prescribed working hours and rest periods will be important, while in many countries across the globe ensuring that employees receive at least the statutory minimum wage will protect the company from wage-related disputes. Further, businesses are generally responsible for providing a safe and healthy work environment. A thorough understanding of these obligations will be crucial for building a compliant operation and fostering positive employee relations in the Syrian market.

When expanding into Syria, companies should also carefully evaluate their approach to hiring talent. In many jurisdictions, this may involve weighing up the implications of engaging individuals as employees versus contractors. Ensuring clear contractual terms and understanding local regulatory requirements will be essential steps to achieving a compliant workforce strategy in Syria. In addition, rather than hiring solely local talent, bringing in experienced staff from other countries may be an attractive option. This can be done in many jurisdictions either by transferring existing employees to the business or seconding staff from other offices. While this can be an effective strategy, especially in the early stages of setting up operations in a new market, employers may need to consider immigration and visa requirements.

Benefit entitlements and incentive arrangements

Another key consideration for employers looking to expand their operations into Syria will be providing adequate employee compensation and incentives to attract and retain top staff. As mentioned above, companies will likely have to comply with local minimum wage requirements, as well as other employee entitlements beyond salary payments, such as pension and social security contributions. Employees may also be required to provide guaranteed paid leave entitlements, including annual leave and sick leave. 

To ensure that they are attracting and retaining the best talent, employers should consider not only meeting local legal obligations but also providing key employees with additional incentives. In higher risk jurisdictions such as Syria, companies will often include supplemental compensation – often known as hardship allowances – in offers to international employees that they want to relocate. Employers may also consider providing certain individuals with equity-based incentives to further incentivise them. Equity incentives can align employees' interests with those of the company by giving them a direct stake in its long-term success. When implementing such schemes in Syria, employers should consider any applicable regulatory restrictions and tax implications.

Company culture and communication

As with entering any new market, companies looking to set up new operations in Syria will need to invest in creating a strong, positive company culture and understanding existing cultures and norms. Spending time focusing on communication and leadership can help to bridge any initial cultural gaps within the company and between members of staff. Cultural differences – such as norms around hierarchy, decision-making, and interpersonal interactions – can impact workplace dynamics and expectations. Language barriers and varying communication styles may also present challenges, potentially leading to misunderstandings or reduced team cohesion if not addressed proactively. Companies may want to consider implementing global training and development programmes to promote cross-cultural collaboration. Facilitating open communication channels and providing cultural sensitivity training can support the integration of diverse teams and contribute to a more inclusive and productive workplace.

Termination entitlements and enforceability of post-termination restrictive covenants

While it may seem counter-intuitive, employers should also direct their minds to the end of employment relationships at the very beginning. Where arrangements come to an end, individuals may be entitled to termination payments, and failure to comply may result in disputes or financial penalties. Additionally, while employers in certain sectors often wish to impose post-termination restrictive covenants – such as non-competes and non-solicitation covenants – or confidentiality undertakings to protect their business interests following an individual’s departure, the enforceability of such restraints may be subject to certain limits. Companies should ensure that said covenants are reasonable in scope and duration, and tailored to the specific context in Syria, to enhance their likelihood of being upheld in the event of a dispute. Specific local law advice should always be sought.

Employers of record

For companies looking to expand into Syria without establishing a formal legal entity, partnering with an Employer of Record (EoR) can be an attractive option. While EoRs can reduce the administrative burden on companies by handling tasks such as payroll, tax reporting and compliance with local employment laws, it is important to fully understand and evaluate the consequences of such arrangements before diving in. We have previously covered EoRs in depth in our blog series (see here for the most recent blog). In summary, the key considerations for employers include: the feasibility of granting equity awards to non-employees; corporate tax residence implications; management of employee culture and internal investigations; proper assignment of intellectual property rights; the implication of transactions on EoR employees; and compliance with any local law restrictions on employee leasing.

Conclusion

Setting up a business in Syria can present opportunities and also challenges on the people side. Success will depend on more than market strategy – it also requires a thoughtful approach to employee engagement. By understanding local employment practices, offering appropriate benefits, fostering a respectful and inclusive culture, and considering the protection of future business interests, companies can lay the foundation for long-term growth.

For more information on this topic, please speak to the authors of this blog post or your usual Freshfields contact.