Is Syria Open for Business? | Nine issues to consider in project documents

Introduction
With international sanctions easing and an urgent need for post-conflict reconstruction, Syria presents new opportunities for foreign investment in the projects space. However, foreign contractors considering Syria face challenges including political volatility, damaged infrastructure, and security concerns. Foreign contractors must prioritise robust contractual protections as part of a comprehensive approach to risk management.

This blog post, the fifth in our series “Is Syria Open For Business?”, outlines nine issues a foreign contractor should consider when negotiating contract documents for projects in Syria.

Overview of operational and infrastructure challenges
Despite positive signals, Syria still faces political uncertainty and security challenges. Internally, rivalries between political factions remain, which present risks of violence. Internationally, Syria continues to be influenced by ongoing conflict in the region, exposing it to the threat of airstrikes and other attacks.^[1]

Furthermore, years of conflict have left critical infrastructure (including roads, power grids, and water systems) severely degraded, with the UN estimating that 50% of Syrian infrastructure has been destroyed or is dysfunctional.^[2]

While this presents an opportunity to invest in Syria’s energy and infrastructure sectors, these challenges increase project risk and complexity, making strong contractual protections (amongst other things) necessary for foreign contractors. Whether they can be achieved depends on the circumstances of each project, including the source of financing.  

Nine issues to consider in project documents
1. Business structure and collaboration
Foreign contractors should choose their business structure carefully. Partnering with local entities – through joint ventures or similar arrangements – can help to share risk and access on-the-ground expertise regarding local culture and security conditions. Local partners are often invaluable in navigating regulatory complexity. However, contracts with Syrian partners (particularly those involving a government entity) may include a prohibition on doing business with any country “at war” with Syria or similarly unusual restriction.^[3] It is therefore important to clarify such restrictions and ensure compliance from the outset.

Beyond legal structures, a collaborative contracting approach between all parties (including the employer) may be more effective at navigating unpredictable project environments than relying on less flexible contractual provisions. Alliancing models can foster joint problem-solving and risk sharing. Early engagement with local stakeholders, including government, communities, and NGOs, can also help to de-risk projects and secure buy-in.

2. Site conditions, security, and access protocols
Many Syrian sites are affected by war-related damage, so it is vital that contracts clearly assign responsibility for assessing, clearing, and managing adverse site conditions. For example, the FIDIC Red Book (commonly used in the Middle East) places the risk of foreseeable physical conditions on the contractor, while the employer bears the risk of unforeseeable physical conditions.^[4] Robust due diligence will be important to identify known risks and ensure appropriate pricing.

Security issues around site access ought to be specifically addressed. Contracts might define “security events” – such as renewed violence or closure of access routes – and allow contractors to suspend work without penalty when necessary. Every project should also contemplate defined protocols for controlling and monitoring site access, employing measures such as secure perimeters and, where appropriate, electronic surveillance or security staff to protect workers, equipment, and materials.

3. Logistics and supply chain flexibility 
Syria’s damaged infrastructure and border restrictions pose significant risks to the timely delivery of materials and equipment. Contracts could allow contractors to source materials through alternative suppliers, reroute deliveries, and obtain reasonable extensions of time to accommodate bottlenecks such as customs delays or transport disruptions. Practical provisions for storage and handling, particularly in areas with limited warehousing or security challenges, might also be included.

4. Scheduling and pricing
Given the likelihood of delays and disruption, scheduling should be pragmatic. Rather than relying solely on force majeure clauses or the civil law concept of imprévision ^[5] (economic hardship) to manage perils that might delay completion, contractors might be permitted to build suitable contingency into schedules. In addition, where, for example, conflict impacts the project site, contracts could expressly provide for extensions of time and recovery of the contractor’s related costs or build flexibility into liquidated damages provisions.

Price certainty may also be challenging. For this reason, contracting parties might consider alternatives to lump sum contracts, such as cost plus arrangements, with suitable transparency and safeguards for managing costs. Price escalation clauses can also help contractors to offset factors such as inflation, currency devaluation, governance changes, and natural disasters.

5. Suspension and termination rights
In high-risk jurisdictions like Syria, the ability to pause or exit a project can be critical for a contractor.

Contracts could grant contractors clear rights to suspend work in response to events such as security threats or infrastructure failures. Contractors should assess what events are covered by force majeure clauses, whether such events must be unforeseeable at the time of contracting, and whether performance must be impossible. Depending on specific facts, terrorist acts and civil unrest might be considered foreseeable in Syria, so relief may not be available where unforeseeability is a requirement. Similarly, imprévision provides relief only where an exceptional and unforeseeable event makes performance excessively onerous. To close these gaps, contracts could include express provisions allowing for suspension (or an extension of time) for foreseeable but severe risks outside the contractor’s control.  

It may be appropriate to include termination rights where there is prolonged delay. Contracts might allow either party to terminate if suspension lasts beyond an agreed period (e.g. 3–4 months), with defined procedures for notice, de-mobilisation, compensation, removal of the contractor’s equipment, and return of any employer-supplied materials and equipment.

6. Regulatory changes 
Despite the transition of government, Syria is likely to undergo an extended period of regulatory uncertainty. New regulations may come into force that affect project costs, schedules, and feasibility. Investors should keep abreast of any changes and ensure contracts take these into account if possible. To mitigate unknown risk, contracts might include suitable change in law clauses that allow adjustments to be made if the impact of regulatory change is significant.

7. Health, safety, and environmental (HSE) standards
Given the strain on Syria’s health infrastructure, contracts may require foreign contractors to comply with international HSE standards, such as the International Finance Corporation’s Environmental, Health, and Safety Guidelines. Comprehensive HSE plans will be needed, covering issues such emergency medical evacuation procedures, disease outbreak protocols, and worker health checks. The contract might also specify the employer’s obligations to reasonably support these measures, such as providing access to medical facilities or funding insurance coverage.

8. Insurance 
Insurance is a vital tool for risk mitigation. It is therefore important to engage with an insurance adviser when drafting project documents. Contracts should specify the types of insurance required and minimum coverage levels, and may require the contractor to provide proof of insurance prior to mobilisation. Contractors may also be required to take out policies with reputable international insurers.

9. Government contract?
Many contracts to (re)build critical infrastructure in Syria will concern the public interest and such projects may be procured by a public authority. If that is the case, foreign contractors should carefully consider whether the legal regime for government contracts applies as this may change the contemplated risk allocation (for example, public procurement legislation may also cover delays, force majeure, and breach).

Conclusion
Investing in Syria offers long-term potential but requires careful risk management. Well-drafted contracts are essential to protect investments and deliver projects successfully, and foreign contractors are urged to engage with legal advisers early.

* The authors would like to thank Myriam Atassi, Rawan Bahamran, and Fulwah Alhamed for their assistance.

^[1] Salt: Syria’s Security and Stability: Assessment and Outlook, June 2025 (SALT Strategic Advisory).
^[2] United Nations Development Programme, “The Impact of the Conflict in Syria”, February 2025 (The Impact of the Conflict).
^[3] For example, this is a precondition in a tender put out by the Syrian transitional government procure crude and refined oil products. See Argus Media, “Sanctions complicate Syria’s access to crude products”, February 2025 ((Sanctions complicate Syria’s access to crude, products | Latest Market News).
^[4] FIDIC Red Book (2017), Clause 4.12.
^[5] Syrian Civil Code (Legislative Decree No. 84/1949), Article 148(2).