Entrepreneurship in Syria: A Path to Economic Recovery

External Contribution: Dr Sinan Hatahet, VP of Investment & Social Impact Program at the Syrian Forum

Syria’s economy has been devastated by over a decade of conflict. Entire industries have collapsed, infrastructure has been severely damaged, and millions have been displaced. Traditional recovery methods are necessary but insufficient. Economic revitalization must be driven by a vibrant private sector and, at its core, entrepreneurship. If Syria is to move beyond mere survival and into a phase of real recovery, it must cultivate an environment where new businesses can thrive, create jobs, and rebuild trust in the market.

Before the conflict, small and medium-sized enterprises (SMEs) contributed 60% of Syria’s GDP, forming the backbone of the economy. That estimated share has been considerably cut in the last fourteen years, falling victim to systematic extortion tactics from the Assad regime, but also demonstrating how fragile the country’s economic foundation has become. The collapse of SMEs has increased unemployment, driven dependency on humanitarian aid, and deepened economic stagnation. Yet despite these conditions, entrepreneurship has not vanished. It continues to operate in the shadows, largely informal, sustained by resilience rather than structured support. The challenge is transitioning these scattered efforts into a functioning, scalable, and formalized ecosystem.

According to a recently published study on entrepreneurship in Syria, over 200 startups still operate, focusing mostly on e-commerce, financial technology (fintech), logistics, and food services. Some have managed to carve out space in a highly volatile market, demonstrating that entrepreneurship remains a viable path despite the overwhelming difficulties. While local ingenuity has kept businesses afloat, structural limitations suffocate real expansion. In post-Assad Syria, entrepreneurship is a key tool for reviving its economy. Nevertheless, its promise is hindered by limited access to capital, sanctions, and a lack of regulatory frameworks that support startups.

Syria’s financial ecosystem is barren, unlike regional markets that benefit from venture capital, private equity, and angel investors. The majority of startups rely on personal savings or family contributions, while formal investment channels are nearly nonexistent. Grants and entrepreneurial competitions provide small-scale funding but cannot support scalable business models.

Sanctions add another layer of complexity. International investors are hesitant to engage with Syrian startups due to regulatory and compliance risks. Sanctions have restricted Syria’s access to global financial systems, limited import/export options, and discouraged international collaboration. The result is an ecosystem that survives on minimal capital, unable to break into high-growth sectors or attract global attention. While sanctions aimed to pressure the regime, they also made it harder for legitimate Syrian businesses to function.

Syria’s regulatory framework is a significant barrier to business growth. The registration process is cumbersome, taxation policies are unclear, and the legal framework lacks transparency. Entrepreneurs often resort to informal networks, limiting their ability to scale.  A structured approach to regulatory reform—perhaps through creating a semi-independent financial regulatory body—could help Syrian businesses navigate local bureaucracy and international compliance requirements.

The Syrian diaspora is anuntap ped resource. Over the past decade, Syrian entrepreneurs abroad have built successful businesses, secured funding, and gained expertise in global markets. They adapted quickly to their host countries, leveraging their access to international networks, better funding opportunities, and supportive business environments, thus enabling them to scale and gain global expertise. If appropriately engaged, the diaspora could inject capital, mentorship, and networks into Syria’s startup ecosystem. This has worked elsewhere: Kosovo’s diaspora-driven investment strategy fueled a significant portion of its post-war recovery. Its success stemmed from a structured approach that channeled diaspora investments through safe, transparent mechanisms. By offering tax incentives and streamlining the investment process, the country made it easier for its diaspora to support local businesses. The diaspora’s emotional connection, coupled with substantial remittances and knowledge transfer, fueled the growth of SMEs and critical industries, significantly boosting Kosovo’s post-war recovery.

Syria’s entrepreneurial ecosystem holds significant opportunities. The country has a young, tech-savvy population eager to innovate and solve local problems. Key sectors such as agribusiness, renewable energy, logistics, and digital services remain largely untapped. The rise of e-commerce, fintech, and remote work also presents new possibilities for growth, especially with the proper support from diaspora investors and international partners. If strategic investments are made in infrastructure and skills development, Syrian startups could drive job creation, foster innovation, and play a critical role in rebuilding the economy. However, these opportunities will only materialize if key barriers—financing, regulation, and market access—are addressed.

For Syrian policymakers, streamlining business registration and taxation processes is essential. Special economic zones with business-friendly regulations could encourage local investment. A regulatory framework allowing legal business operations while maintaining compliance with international laws is crucial.

For international donors and investors, funding long-term startup incubators and accelerators would provide stability. Crowdfunding and alternative financing models could help Syrian businesses bypass banking restrictions. Facilitating engagement between the Syrian diaspora and local entrepreneurs would create new funding avenues.

Focusing on lean, scalable business models will improve the resilience of Syrian entrepreneurs. Leveraging international freelancing and remote work opportunities can mitigate local market limitations. Building local and regional networks will create knowledge-sharing opportunities and open new business prospects.

Syria’s economic recovery cannot rely solely on foreign aid or government-led initiatives. The private sector—particularly startups and SMEs—must play a leading role. Before the conflict, SMEs contributed 60% of GDP. Despite enormous challenges, Syrian entrepreneurs have shown resilience and creativity. With the proper support, Syria’s startup ecosystem can become a major driver of economic stabilization and long-term prosperity.

History has shown that countries emerging from conflict can rebuild through entrepreneurship. But to make it happen, stakeholders must align efforts to break down barriers and create a thriving entrepreneurial landscape.  This is not a luxury but a necessity. Entrepreneurship is not only part of Syria’s recovery; it is also part of its economic identity.