Foreign entities may incorporate Iraqi companies and trade representation offices/branches, and operate in Iraq under the Companies Law 21 of 1997 as amended, MoT Instruction No.196 of 2004 regarding the registration of Iraqi companies, and Regulations No. 5 of 1989 for the registration of branches and trade representative offices of foreign companies. On the other hand, foreigners are not allowed to engage in retail sales activities before fulfilling the following requirements:
Depositing a US $100,000 surety in a non-interest-bearing account with an authorized bank in Iraq 30 days before registration Obtaining a certificate of authorization from the MOT. Cash contributions must be paid into an account with a bank authorised to operate in Iraq (several foreign banks operating in Iraq such as Standard Chartered and Is Bank) and are frozen in the account until documents are presented to the bank showing that the establishment formalities have been completed
The foreign retailer may apply to the OCR who in turn provides him with a letter to the relevant bank approving the reimbursement of the surety deposit. However, this can only be done after the retail activity in question has ceased.
An investor wishing to set up a company in Federal Iraq must complete an application and submit it to the Companies’ Registrar in Iraq
The application must include the following information concerning the business entity proposed to be registered by the Companies’ Registrar at the Iraqi Ministry of Trade
The first step for any foreign company to start a commercial business is to be registered under Iraq law and regulation. The Company Registrar under the Ministry of Trade is the competent authority to register any foreign company. Various laws and regulations such as the amended Company Law No. 21 of 1997, Registration Agency Law No. 4 of 1999, General Company Law No.22 of 1997, Commercial Agency Regulating Law No.51 of 2000 apply. To register a Branch, the following requirements must be fulfilled:
- A copy of the memorandum of incorporation and articles of association of the mother company or corporation or any equivalent document provided it should include names of the board of directors and the individual authorized to sign on behalf of it.
- A copy of a valid registration certificate of the company or the corporation issued from the country of origin. 3- A copy of the latest final accounts of the company or the corporation together with the board of directors report attached with these accounts or a statement for the company or a foreign economic enterprise of the existence of the required financial deposits where a company is newly established.
- A pledge from the mother company affirming it will bear the financial and legal responsibility of its branch.
A copy of the power of attorney of the branch or office manager in Iraq who actually resides in Iraq issued from the company or corporation management with an indication of his powers.
The authorization of the representative who will file with the registrar of companies.
- A copy of the form of the license request provided by the law firm.
- A confirmation letter from the government departments or contractual sources clarifying the contract nature of the rendered services together with the commencement and expiry date of the contract and the maintenance period (if any) concerning the companies which are seeking to get a branch license
The above documents should be certified by; the competent authorities ( including a Notary Public + Ministry of Foreign Affairs + Iraqi Embassy ) in the country of origin and then certified by the Iraqi Ministry of Foreign Affairs in Iraq.
All documents must be translated to the Arabic language if these documents are in a foreign language – the translation can be performed after the authentication process by certified legal translators in Iraq and can be handled by the law office. Also following documents must include
- A coloured copy of the branch manager passport (for foreigners only) or copy of identity card and ration card for Iraqis.
- Coloured copy Identity card and ration card for the representative of filing with the Registrar of Companies.
- The branch or office manager and the representative of filing with Registrar of Companies must reside in Iraq.
- The difference between a branch and representation office of a foreign company as defined in the article (1) of the regulation is – 1-A company branch or economic enterprises is allowed under this regulation of companies branches or foreign enterprises whose activities were always in Iraq under a treaty or a contract with the state or contracting for implementation of the certain project with the state offices. 2- A representation office is allowed under this regulation for market study and the possibility of work or production or identification for the products and services or contact facilities. A representative office is prohibited from practising any trading activities or agency.
- The required period to finish the registration procedures: The approval shall be obtained to register a branch for a foreign company in compliance with the provisions of article (3-second) of the above regulation. The registration procedures take (3) days in case of submitting all documents required for regulation and relating instructions – The approval of the minister shall be obtained to register a representations office in conformity with the provisions of article (3-third) of a branch of representative offices of foreign companies and economic corporations regulation No. (5) of 1989