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Foreign Investment In Iraq
IraqITIC.com - Foreign Investment In Iraq:

Foreign investment in Iraq is governed by CPA Order No. 39 (as amended by CPA Order No.46).

Foreign investors are entitled to invest on terms as favorable as those applicable to Iraqi investors. They may establish a private local company or open trade representation offices and branches in Iraq. There are no limits on the amount of foreign participation in newly formed or existing business entities.

All geographical areas and economic sectors are open to investment except the natural resources sector involving primary extraction and initial processing. Furthermore, in order to start a retail business a foreign investor is required to deposit $100,000, in a non-interest-bearing account in a licensed Iraqi bank located within Iraq.

Foreign investment may be implemented either through the use, among others, of freely convertible currencies or Iraqi legal tender, in the following forms:
  1. By establishing a completely foreign-owned business entity, including a subsidiary of a foreign company
  2. By establishing a business entity jointly with an Iraqi investor
  3. By establishing a branch office or
  4. By directly acquiring an investment
Foreign investors may:
  1. Possess, use, and dispose of their investment
  2. Manage or participate in managing a business entity
  3. Transfer their rights and obligations to other persons
  4. Transfer abroad all funds associated with the investment, including:
  • Shares, profits and dividends
  • Proceeds from the sale of or other form of disposal of the investment or a portion thereof
  • Interest, royalty payments, management fees or other fees and payments made under a contract
Foreign investors or a business entity with any level of foreign investor participation may not purchase real property. However they can lease property for a period of up to 40 years on a renewable basis; or establish a local company which can own real property according to law no. 43, 1971 (Real Estate Recording Law) Article 151.

In order to protect investments, insurance coverage may be obtained for all aspects of the operation from any foreign or Iraqi source. Dispute resolution will be effected between foreign and local partners in accordance with the provisions of the agreement governing their relationship; and the parties may elect in the agreement to utilize the arbitration mechanisms outlined in Iraqi law.

HOW TO REGISTER BRANCHES AND TRADE REPRESENTATION OFFICES OF FOREIGN COMPANIES:
In order to conduct business in Iraq foreign business entities need to register with the Registrar of Companies, Ministry of Trade. Contractors will need to register unless otherwise exempt under the laws and regulations of Iraq. Business entities that have been previously registered in Iraq under Regulation No. 5 of 1989 on "Branches and Offices of Foreign Companies and Economic Establishments" do not need to register again. However if the registered entity's information needs to be updated, this must be filed with the Registrar of Companies no later than December 31 of each year. In the case of a change of address of the principal Iraq office or of the agent for the service of process, documents must be filed within seven (7) days. A single standard registration processing fee is two hundred thousand (200,000) Dinars, approximately $137 U.S., with half that amount due at the time of filing an application and the remaining one-half due when the application is approved. In the event the application is rejected, the portion paid is forfeited and the remaining fee is no longer due. The Registrar is required to review the application for completeness, and if found incomplete, it will be returned without collecting a fee. If the application is complete, the Registrar will provide a signed checklist to the applicant showing that all required documentation has been received. Upon approval the applicant will be issued a registration license with a permanent and unique identification number. The Registrar is required to approve or reject an application within 10 business days from the date of its submission. It will notify the applicant of a rejection in writing stating the reasons for its disapproval. If the application is rejected the applicant has the right to contest the disapproval to the Minister of Trade within thirty (30) days from the date of notification. The Minister will review the disapproval within thirty (30) days from the date of submission of the applicant's appeal. If the Minister of Trade upholds the rejection, the applicant retains the right to appeal to the competent court of law within thirty (30) days of the date of the Minister's decision.

Documents required:

The foreign business entity shall complete and file the application accompanied by two copies, and the following documentation with the Registrar of Companies:
  1. Certificate of registration, as issued and authenticated by the competent authority in the home country of origin
  2. A copy of the company's charter of incorporation or equivalent authenticated by the competent authority in the home country of origin
  3. A letter on the stationery of the applicant?s company signed by an officer or director of the company to the following effect:
  • Authorizing the registration of the business entity in Iraq
  • Consenting to the service of process in Iraq
  • Identifying the chief management official in Iraq, the authorized agent for the service of legal process in Iraq and the representative for filings with the Registrar of Companies in Iraq (all the above three must reside in lraq)
  • The financial statement of the company for the last fiscal year
  • If the proposed entity is planning to operate in retail sales, a bank statement showing that the sum of one hundred thousand United States dollars ($100,000.00) has been deposited in a non-interest bearing account (this can be furnished to the Registrar of Companies at a later date and the non-submission of it shall not be grounds for rejection of the application. However the bank statement will have to be furnished before the actual sales activity is commenced.
  • A copy of the passport (for a foreign citizen) or identification card (for an Iraqi citizen) of the authorized representative for filings with the Registrar of Companies.
The application and the required information and documents may be filed in either the Arabic or English language. Translations will have to be provided of home county documents not in the English or Arabic language. For more information on Registration, Laws & Regulations and Application Forms, please visit:
Iraq Registrar of Companies, Ministry of Trade, Republic of Iraq: http://www.br-iraq.com
The US Department of Commerce: http://www.export.gov/iraq/bus_climate/foreign_reg_guide.html

Or contact the following:
The Director General for Company Registration:
Email: ContactMail@cbr.iq
Address:
Office of the Registrar of Companies, Baghdad International Fair Grounds, Al-Mansour, Baghdad, Iraq.

For details on foreign investment in Iraq please visit the Iraq Investment Promotion Agency (IIPA) at: http://www.iraqipa.com



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