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, and the economic growth being experienced all together put Iraq under the spot light. Since most foreign companies are interested to invest and establish a legal presence in Iraq; there are several options that companies 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/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 advantage of setting a representative office, is establishing a legal presence; easiness to convert it into a branch once a governmental contract is obtained; keeping the same name of the parent company and the time required to register it as it usually take about a month to a month and 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 enjoy the use of their brand on their branch In Iraq. However, the parent companies assume all legal and financial liability for its branch or representative office 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...