Business – Investing in Iraq
Negotiating with Iraq
The law of Iraqi companies, CPA Order 64, facilitates businesses, simplifyng the registration process and other procedures for foreign and Iraqi investors. All new local and foreign companies must register with the Resgister of Companies (Ministry of Commerce), and the Registrar is required to pass a written request within 10 days.
A foreign person or legal entity may become a founder, shareholder or partner in any company with unlimited level of participation and a foreign business organization can invest using freely convertible currencies or current Iraqi currency.
Main Characteristics of Company Law
Foreign investors may establish wholly foreign entities, including subsidiaries. They can enter into joint-venture with domestic investors to acquire an existing investment or open branches.
The foreign investors are fully authorized to possess, use, transfer or disposal of their investments, and may manage or participate in the management of a business organization. All funds listed below that are associated with the investment are transferable abroad:
- Actions, profits or dividends;
- Receipts from the sale or disposal of an investment or a part of it;
- Interest, royalty payments, management fees or any other fees and payments made under a contract;
- Any other transfers approved by the Ministry of Commerce;
How to establish a company
The founders (domestic, foreign or mixed) should prepare a contract for the company, which is signed by them or their legal representatives.
The contract must contain at least:
- The company name and corporate form, with the “mixed” word added, if a mixed company in the industry, as well as any other acceptable elements;
- The company’s headquarters, which should be in Iraq;
- The objectives for which the company will be established and the general characteristics of business to be held;
- The company’s capital divided into shares and parts;
- Profits and deficits distribution method in the company society;
- The number of elected members of the board of directors of the private limited company;
- The names of the founders and their nationalities, professions, permanent address, and number of shares they held and their percentage of the capital;
The founder of a limited company in which there is no other founders, or the founder of a company of only owner must prepare a statement that should serve the purpose of the contract of a company and should be subject to the provisions that are applicable to the contract always occuring in this law. The company’s founders must contribute to the capital of the company in accordance with what was decided, depositing the company’s capital amounts to one or more banks authorized to operate in Iraq. Is it permissible for the company’s capital includes contributions in kind.
The request for the establishment must be presented to the Ministry of Commerce / Resgistrar of Companies with the following attachments:
- the contract of the company;
- The signing of the document of the corporation signed by the founders;
- The statement from the bank or banks proving that the capital required in Article 28 has been deposited;
- The study of technical and economic viability of the corporation.
To access the new investment law in Iraq, approved in 2006, click here. The file is available only in English.