Doing business in Iraq Doing business in Iraq

Iraq is the new Middle East destination for business and investments. Being one of the richest countries in oil and gas, as well as emerging from years of war, the economic growth being experienced all together puts Iraq under the spot light, says Khaled Saqqaf at Al Tamimi & Company.

Most foreign companies wishing to do business in Iraq are interested in investing and establishing a legal presence in the country. There are several options they may wish to consider regarding their incorporation. Some of them may want to extend into Iraq using a representative office, or conduct business through a branch; others may wish to incorporate a new Iraq entity or partner with locals. All of these options are available under the current Iraqi law depending on the needs, business, governmental contacts, and activities to be exercised in Iraq.

Representative office or branch

A representative office is the simplest way to establish a presence in Iraq for exploring, marketing, negotiations and feasibility study activities. The representative office is not allowed to engage in commercial activities or transactions.

The advantages of setting up a representative office include establishing a legal presence, the ease in converting it into a branch once a governmental contract is obtained, being able to keep the name of the parent company, and reducing the time required to register it as it usually takes about a month to a month and a half to be registered from the date of submission of the application to the Registrar of Companies (

Initially, all applications are registered as representative offices, with no ability to engage in commercial trade until the foreign company has negotiated a contract with either the Iraqi or the US government. Once a foreign company has a governmental contract, it may apply to transfer its status from representative office to branch. The company will maintain branch status and be authorised to do business in Iraq for the duration of the contract.

Therefore, foreign companies may benefit from the use of their brand in Iraq; however, the parent companies assume all legal and financial liability for their branch or representative offices in Iraq. Some investors may consider this to be a drawback.

New Iraqi entity

Another legal path to consider is incorporating a new company in Iraq, whether with 100% ownership or with an Iraqi national.

Except for some specific activities, the current Iraqi Companies’ law allows 100% foreign ownership of companies without any restrictions to nationalities, individuals or companies. The shareholder may be a natural person (business law terminology for a human being), a juristic one (a legally recognised entity – such as a firm – having a distinct identity, duties and rights), Iraqi or other.

Furthermore, some company types may be owned by one person, which means that a foreign company or natural person may solely own 100% of an Iraqi company.

The new Iraqi company might be incorporated in one of the following types:

• Joint stock company

– The minimum number of owners of a joint stock company is five persons.

– Owners are liable for a company’s debt to the extent of the nominal value of their shares.

• Limited liability company (LLC)

– An LLC can be formed by one natural or juridical person.

– Owners are liable for the company’s debt to the extent of the nominal value of their shares.

– The general minimum capital requirement is IQD 1,000,000 (approximately US$ 850), with exceptions for certain companies such as construction, aviation and others.

– This company will not have a board of directors, but will be managed by a manager (usually known as the Managing Director) who will be responsible for the management as per the authorities granted by the general assembly.

• Joint liability company

– A joint liability company requires a minimum of two shareholders.

– Owners jointly assume personal and unlimited liability.

• Sole owner enterprise

– A sole owner enterprise is formed by one person.

– Owner assumes personal and unlimited liability.

•A simple company

– A simply company is similar to a partnership, with not less than two or more than five partners who contribute shares to the capital.

– The partners carry unlimited liability to the extent of their shares in the company.

– A simple company does not need to be registered with the Registrar of Companies Department. A notarised establishment contract signed by all the partners will suffice. A copy of the establishment contract should be placed with the Registrar of Companies.

The most popular choice is the LLC as it can be formed with one shareholder, with a limited liability and generally for any purpose (though some exceptions apply). The LLC, as with other Iraqi companies, should have an Arabic name; therefore most of the foreign companies cannot keep their names as it does not have an Arabic meaning.

The registration process of this type of company takes between eight to twelve weeks to be completed from the date of submission of the application to the Registrar of Companies.

Khaled Saqqaf, Head of Jordan and Iraq Offices, Al Tamimi & Company

Document requirements

In general, all the documents issued outside Iraq should be authenticated (attested) by the competent authorities in the issuing country, and then stamped by the Iraqi embassy or consulate in that country; and translated to Arabic if issued in a different language.

Afterwards, the documents will need to be stamped again by the competent authorities in Iraq’s Ministry of Foreign Affairs, and sometimes by the taxation department and Central Bank, depending on the document itself.

All companies – whether representative office, branch or a new Iraqi company – are obliged (after registration) to retain both a lawyer and an auditor.

Khaled Saqqaf is a special counsel and Head of the Corporate/Commercial department within Al Tamimi’s Jordan office. He has practiced litigation in most legal fields having formerly been a partner and founder of one of the most reputable law firms in Jordan. He has extensive experience in corporate/commercial matters. He is a certified private mediator and arbitrator, and an Arbitrator to the Amman Stock Exchange. In addition to his professional experience, he has also lectured for several years at the Faculty of Law at AlZaytoonah University, Jordan.

Al Tamimi & Company Advocates and Legal Consultants, originally established in 1989, is today one of the leading law firms in the Arabian Gulf region. It is the largest local, non-affiliated law firm in the United Arab Emirates with offices in the Emirates of Dubai, Abu Dhabi and Sharjah, Riyadh (KSA) and associate offices in Doha, Baghdad and Riyadh. Visit for more information.

Rushika Bhatia Editor

Rushika Bhatia is one of the region’s leading commentators on business and current affairs issues. She is the Editor of SME Advisor magazine - the flagship title of CPI Business. She is passionate about infographics – with special emphasis on data, research and statistics. Rushika has a Bachelor’s Degree from Indiana University, USA and is also CIMA qualified.

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