The lifting of Syria sanctions must be followed by real reforms

A bureaucratic minefield

If Syria wants to attract serious investment, it must dismantle the bureaucratic minefield left by decades of Assad-era governance. The previous system was defined by unclear rules, arbitrary enforcement, and opaque licensing procedures, all of which discouraged investments and enabled corruption.

The new authorities have started removing bureaucratic hurdles, with some entrepreneurs noting fewer petty rules and quicker approvals. Still, a meaningful regulatory overhaul must go further. Syria needs clear, consistent rules for starting businesses, securing licenses, paying taxes, and bidding on contracts.

These must apply equally to all, not selectively based on loyalty or connections. Investors also need confidence that regulations won't shift overnight or be exploited for political gain.

Transparency is also key. Publishing reliable economic data, national budgets, and procurement outcomes would mark a major break from the past. Competitive, open tenders for reconstruction contracts would send a strong signal to foreign investors.

Revisiting outdated or damaging laws, while subjecting all new regulations to impact assessments, will also help. With support from international partners, Syria can build a regulatory system that matches global standards—and finally unlock the private sector growth it urgently needs.

Independent financial institutions

A functioning financial sector is essential to restoring investor confidence. Years of mismanagement and international sanctions have severed Syria from global capital markets, leaving its financial system outdated, opaque, and unreliable. Now, with sanctions beginning to lift, Syria has a rare opportunity to reconnect with the international financial system, but only if it reforms swiftly and credibly.

At the heart of this effort must be the establishment of independent, transparent, and professionally managed financial institutions. The Central Bank, in particular, should be granted genuine autonomy to stabilise the currency, control inflation, and supervise banking operations in line with international norms. Restoring trust in the Syrian pound requires a disciplined monetary policy free from political interference. If investors believe inflation is under control and the currency is stable, they are far more likely to commit long-term capital.

In parallel, independent financial regulators must oversee private banks to ensure sound lending, prevent capital flight, and eliminate cronyism. Decades of financial malpractice under the Assad regime left a legacy of favouritism, unsustainable debt, and institutional decay. Addressing this will require both regulatory overhaul and cultural change.

Compliance with international standards is also non-negotiable. Syrian banks must implement robust anti-money laundering (AML) and counter-terrorism financing protocols. Modernising outdated financial laws, adopting global banking regulations, and restructuring any compromised state-owned banks are essential steps toward international reacceptance. Doing so will not only ease Syria's return to global markets but also reassure foreign investors that their assets are secure, transactions are legal, and profits can be repatriated without fear.

Combating corruption

Corruption and cronyism were hallmarks of Syria's pre-war economy, driving away investors and stifling genuine business activity. Wealth and opportunity were monopolised by a small elite connected to the regime, creating a rigged system where political ties mattered more than merit or innovation.

If Syria hopes to attract serious post-conflict investment, breaking with its legacy of corruption is non-negotiable. The transitional government has taken initial steps by removing corrupt officials and restructuring state institutions that were once vehicles for bribes and embezzlement. These are important signals of intent, but they are not enough.

What's needed are robust state institutions staffed by professionals earning decent salaries, enough to meet basic needs without working multiple jobs or turning to bribery. Just as crucial is the creation of independent and effective anti-corruption bodies with real authority to investigate and prosecute graft, from petty bribes to high-level kickbacks. A free press and strong whistleblower protections are also essential to ensure officials are held accountable and misconduct is exposed.

Ultimately, the litmus test will be how Syria treats its first wave of investors. If they report fair and clean dealings, others will follow. But if the old habits resurface under new faces, investment will stall before it starts.

Security and political stability

No investor will commit serious capital to Syria without reliable security and political stability, foundations essential to any economic recovery. Although the collapse of the Assad regime in December 2024 opened the door to national reconciliation, Syria remains far from fully secure. Major frontlines have quieted, but pockets of insecurity persist.

Despite efforts to unify armed factions under the Ministry of Defence, progress has been limited. Many groups continue to operate independently, posing ongoing risks of localised violence that could threaten investment projects. At the same time, stalled negotiations with Kurdish forces in the northeast and Druze factions in the south leave key regions outside full government control, keeping the possibility of future conflict alive.

Political reconciliation is equally critical. The establishment of a transitional government was an important step, but the exclusion of key actors has deepened political fragmentation. This contributes to an unpredictable climate that deters long-term investment.

To move forward, the transitional government need to launch a genuine national dialogue that includes all communities, as well as political and armed actors. Building consensus, ensuring inclusive governance, and offering real participation to all communities will reduce instability and lay the groundwork for peace.

Ultimately, stability is the strongest magnet for investment. If Syria sustains its current path and avoids relapse into conflict or authoritarianism, investor confidence will gradually return, with each calm month making the country a more credible destination for capital.

Implementing these reforms would not only help attract investors but also provide the assurances needed by governments still hesitant to fully lift their sanctions. This could pave the way for replacing partial, short-term measures with more permanent ones.

180-day waivers—not a full repeal

The US is a case in point. Despite the bold tone of President Trump's announcement on lifting sanctions, the administration appears to be opting for a temporary suspension rather than a full repeal. This was clarified by US Secretary of State Marco Rubio, who stated that sanctions would be suspended through 180-day presidential waivers.

The renewal of these waivers—and any eventual move toward permanent sanctions relief—will depend on the transitional government's progress on a series of requirements reportedly outlined by Trump during his meeting with Syrian Interim President Ahmed al-Sharaa. Many of these points appear to mirror those laid out in a letter the US delivered to the Syrian government in March.

Similarly, meaningful reform could accelerate efforts by the European Union and other governments to lift sanctions entirely. In turn, this would provide much-needed guarantees for investors and increase the likelihood of large-scale, long-term commitments essential to Syria's economic recovery.

In other words, limited sanctions relief is just the beginning. For Syria to seize this opportunity and lay the groundwork for lasting prosperity, the transitional authorities must commit to building a stable, transparent, and inclusive environment where investment can flourish. While some encouraging steps have been taken, investor confidence will remain fragile without bold, systemic reforms.

Transforming Syria into a true land of opportunity will demand consistent, tangible action. Only then can the country turn this rare window into a durable recovery and a shared path toward prosperity after years of conflict and hardship.