In order to develop a strong fiscal base Iraq has followed the following policy direction:
In addition to creating a sound regulatory environment, the following important steps have been taken:
- By creating the Board of Supreme Audit, Iraq has shown its commitment to financial transparency.
- In order to pursue sound fiscal management and rationalize the process of public debt management, the Financial Management Law and the Public Debt Law have been passed.
- The introduction of a balanced budget
- The introduction of Treasury Bills
- The Introduction of a progressive Income Tax regime
- A simplified and reduced Custom duties structure
- In order to put the country on a sound financial footing, Iraq has carried out a major reduction in its international debt
In order to create the basis of a sound monetary policy environment the most significant step has been the formation of an independent central bank viz. the Central bank of Iraq (CBI), on March 6, 2004, as an independent regulatory authority. It performs monetary functions, manages foreign reserves, acts as the government's banker and fiscal agent, issues currency, establishes and maintains systems for clearing and settlement of payment transactions, and supervises private banks.
The New Iraqi Dinar (NID) - a free floating currency - was introduced in January 2004 together with a new monetary control system. There are no restrictions or taxes on the purchase or sale of currency; the CBI carries out a regular currency auction in order to stabilize the exchange rate, which now stands around 1300 NID to the US $. The NID is fully convertible and there are no restrictions on capital flows.
There is a multi-currency system in place where foreign currency freely circulates in the market. As a result checks are officially cleared at the CBI in all major foreign currencies, particularly the US$.
Interest rates stand liberalized on all domestic financial instruments, inflation has been stabilized and the capital base of private banks stands significantly enhanced.
Foreign banks may open branches and form joint ventures with Iraqi private sector banks. Under private sector banks may be wholly owned by foreign banks with no legal limit on the number of licenses that may be granted. Also, branches and domestic subsidiaries of foreign banks are legally at par with Iraqi banks.
For more details please visit the Central Bank of Iraq: .
Iraq's has been granted World Trade Organization (WTO) observer status since February 2004. This was duly followed by the establishment of a Working Party to examine Iraq's application for membership. Both these steps express the International Community's confidence in Iraq, and send a positive message of transparency and predictability with respect to Iraq's economic future.
For more details please visit: .
Iraq has been designated as a US Government Generalized System of Preferences (GSP) beneficiary. This facility provides Duty Free tariff treatment to the USA for 3,394 product lines from Iraq.
For more details please visit:
Iraq's commitment to the global trading community is shown by changes in its Intellectual Property Laws, bringing them in conformity with internationally recognized standards.
For details please see , , and
For details on trade laws and regulations please visit the section on trade in Iraq.
Iraq considers foreign direct investment as a major component of its industrial and development policy. In this regard all restrictions have been removed in order to encourage the flow of capital, technology and management expertise; and to encourage strategic partnerships between foreign and Iraqi investors.
Procedures have been simplified and a specialized Investment Promotion Agency (IPA) has been established for offering investment opportunities and to facilitate foreign investors.
The investment law (as amended by the CPA Order No. 46) has opened all sectors except the natural resources sector involving primary extraction and initial processing, to foreign investment, allowing complete ownership and management of business entities. Full protection is given to the rights and property of investors and they are entitled to equal terms as Iraqi investors. Foreign investors may open trade representative offices or branch offices, and can lease property for renewable terms of forty years. The law contains provisions for dispute settlement and gives precedence to the terms of international agreements that Iraq may be party to.
For more details please see the section on Foreign Direct Investment under Structure of Companies in Iraq.
For details on how to invest in Iraq please visit the Iraq Investment Promotion Agency (IIPA) website at:
A high powered Privatization Commission under the Council of Ministers has been set up to administer reform and privatize the 192 State and quasi-state owned enterprises (SOE). The mandate of the Privatization Commission is to liquidate, sell, or enter into partnerships with strategic partners under a transparent program of reform.
The public sector includes:
To download a listing of state owned enterprises in Iraq, .
- Public utilities including Power Generation, Transmission and Distribution
- Health Services
- Postal Services
- Oil installations, Refineries, Pipelines and Storage Facilities
- Railroads, Airports, Seaports, Storage Facilities at Seaports and Airports & Public Transport Services
- Railways: There are plans afoot for expanding and restructuring the Railways to allow for greater private sector participation in the delivery of services
- Civil Aviation: A civil aviation strategy and master plan allowing for private sector participation in select areas in under way
For more information on SOE profiles please see: or . The Ministry of Industry and Minerals: or visit the websites of individual ministries in the section on Links.