Registering Businesses in Iraq
Iraq’s first post-conflict perm government passed a new investment law in October 2006, opening up its economy to foreign investment. While Iraq is making great strides to develop a more investor-friendly business environment, much work remains. Inflation and stagnant economic growth will be challenges that Iraq will need to overcome, but the Government of Iraq (GOI) is in the process of making the necessary economic reforms to lead the country in a new direction. Pension reform and further reductions of the refined oil price subsidy are just a few of these economic policies.
In addition to passing a new investment law, Iraq’s commitment to rejoin the international community can also be seen in its progress towards The World Trade Organization (WTO) accession. With stabilized security conditions throughout the country, Iraq is certainly a place to consider for investments, business expansion, and other fruitful opportunities.Local and foreign companies are regulated under Company Law No. 21 of 1997 as amended in 2004.
The most commonly registered business entities in Iraq are the limited liability company (LLC), the branch office and the representative office. Alternatively, our Clients will have the option of setting up a joint stock company (JSC) or establishing their business presence through a joint venture (JV) with another locally incorporated business. Al Saif Firm and Advocates Consultants will assist our Clients with choosing the optimum corporate structure, keeping in mind their business needs
The objective of the law is
To organize companies.
To protect creditors from fraud.
To protect shareholders from conflict of interest and related abuses by company officials, majority of owners and others with practical control over the affairs of the company; and
To promote the provision of full information to owners in connection with a decision affecting their investment and their company.
If you are registering a company, domestic or foreign, or changing one’s name, we are here to help and provide you full support and assistant.
Forms of Companies in Iraq
There are several different types of company structures:
Joint stock companies - mixed or private
Joint stock companies must be established by at least five natural or legal persons. They offer shares through public subscription. The shareholders are responsible for company debts to the extent of the value of their respective shares.
Iraqi law requires insurance, reinsurance, financial investment, banks, and money transfer firms to be joint stock companies (Article 10 of the Companies Law No. 21 of 1997as amended). Founding shareholders must post an incorporation deposit (Article 28 of the Companies Law No. 21 of1997) in a bank authorized to operate in Iraq. Financial investment companies operate as financial intermediaries investing in financial securities. They are governed by the Companies Law as any other joint stock company. Their operations, however, are supervised by the Central Bank of Iraq in accordance with the Iraqi Central Bank Law No. 56 of 2003 and Financial Investment Companies Regulations No. 6 of 2011.
Sole proprietorships may be established by a single natural person. In sole proprietorships, the owner assumes personal, unlimited liability. This company is called a “sole owner enterprise”. Joint liability companies. Joint liability companies are established by a number of persons ranging between two and twenty-five natural or legal. The liability of the owners is unlimited and they participate in proportion to their respective shares in the company.
Simple companies are established by a number of persons ranging between two and five, each of whom contributes capital to
the company in the form of cash or labor The Companies Law requires simple companies to have notarized incorporation papers. Simple company’s partners must deposit a copy of the incorporation charter, delineating the partners and their quotas with the Iraqi Office of Company Registration (OCR) at the Ministry of Trade (MOT).
Limited liability companies - mixed or private
Limited liability companies may be formed by no less than two and no more than twenty-five natural or legal persons. Limited liability companies may also be established by a single natural person. Founders are responsible for company debts to the extent of the nominal value of their respective shares. A mixed company may be formed by agreement between one or more legal persons from the public sector and one or more from other sectors, i.e., private, mixed, and/or cooperative, provided that public sector shares represent no less than 25 percent of the total company capital. If the percentage of state-owned shares falls below 25 percent, the company is considered a private company. The vast majority of registered enterprises in Iraq are limited liability companies.