100% Foreign-Owned Business in Iraq

As per the amendment of the CPA orders to the Iraqi corporate law number 21 for the year 1997, foreigners are allowed to incorporate an Iraqi LLC with 100% ownership. Under the valid companies’ law, there is no need for the assignment of an Iraqi sponsor. Foreigners are not allowed to operate in travel and tourism activities, nor are they able to carry out all activities related to marine services and general transport such as handling, loading, offloading, stowage, storage, multi-modal transport and others (for more information, please contact us).

Visa Regulations in Iraq: Visa Feasibility, Costs, Processing Time and Procedures

Two scenarios present themselves in case a company had signed a contract with the government. This achievement enables us to initiate a file for the company at the Iraqi Ministry of Interior with a support letter from the governmental entity with which the company had entered into contract - and, consequently, to issue visas (for more information on the visa regulations, please contact us).

Investment in the Free Trade Zone in Iraq, Type of Establishment, i.e. FZE or LLC etc.

In the Iraqi FTZ (Khor al-Zubair), a foreign company cannot establish a branch but is rather required to establish and register it with the MoT (Ministry of Trade) in Baghdad prior to entering into contract with FTZ. The best model for establishing a business in Iraq is LLC (for more information on LLC and other available options, please contact us).

Personnel Restrictions on Labor Force in Iraq according to workforce numbers and nationalities

Foreign companies must employ a minimum required percentage of Iraqi employees (for more information on personnel restrictions, please contact us).

Start-up Cash Requirements (Capital) and Required Deposit Duration

For regional representation offices, no start-up deposit is required (for more information on these requirements for the incorporation of LLC and other business types, please contact us).

Tax Regulations in Iraq and Tax Implications for Active Foreign Companies

Any individual (natural or legal) residing in Iraq is subject to the income tax. The LLC is also included as per the Iraqi tax law so long as the HQ of the company is located inside Iraq. It is worth mentioning that foreign companies that have branches or regional representative offices in Iraq are subject to the income tax only so long as their branches or representative offices are concerned. Currently, the applicable Iraqi tax law imposes an annual income tax on companies that is equal to 3% of the total contract value for contracting projects, and 3.3% of the total project value for supply projects (for more information on tax regulations, please contact us).

Tax Regulations in Iraq and Tax Implications for Active Foreign Companies

Any individual (natural or legal) residing in Iraq is subject to the income tax. The LLC is also included as per the Iraqi tax law so long as the HQ of the company is located inside Iraq. It is worth mentioning that foreign companies that have branches or regional representative offices in Iraq are subject to the income tax only so long as their branches or representative offices are concerned. Currently, the applicable Iraqi tax law imposes an annual income tax on companies that is equal to 3% of the total contract value for contracting projects, and 3.3% of the total project value for supply projects (for more information on tax regulations, please contact us).

Registration Process of Companies in Iraq - and Related Timescale

Once required documents are available, an application shall be submitted to the MoT/Companies Registration Office. The application is subsequently directed by MoT to other ministries in order to secure other approvals required as pre-requisites prior to the issuance of the registration certificate for the LLC (for more information on this process as well as the estimated processing time, please contact us). As per the Iraqi corporate law number 21 for the year 1997, the regional representative office may be upgraded into a full-fledged branch office provided that a number of requirements have been fulfilled by the representative office (for more information on these requirements, please contact us).