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Company Registration In Iraq

Company registration in Iraq

Iraq, officially the Republic of Iraq, is a country in Western Asia, bordered by Turkey to the north, Iran to the east, Kuwait to the southeast, Saudi Arabia to the south, Jordan to the southwest, and Syria to the west. The capital and largest city are Baghdad.

Iraq is a federal parliamentary republic consisting of 19 governorates, four of which make up the autonomous Kurdistan Region. The country's official religion is IslamCulturally, Iraq has a very rich heritage and celebrates the achievements of its past in both pre-Islamic as well as post-Islamic times and is known for its poets. Its painters and sculptors are among the best in the Arab world, some of them being world-class as well as producing fine handicrafts, including rugs and carpets. Iraq is a founding member of the UN as well as of the Arab LeagueOICNon-Aligned Movement, and the IMF.

Setting up a company in Iraq

When setting up a company you may want to consider these factors:

  1. Business Factors

Business factors such as:

  1. Location

Location will be another factor. Separate cities and regions may have different rules, costs, and availability. It is always recommended to seek advice from relevant professionals, such as business or legal advisors, accountants, and others depending on your needs.

  1. Regional Language

Regional language may be an influence. Although Arabic is the national language, different locations in Iraq use different languages, such as Kurdish, meaning some terminology may be different in various regions.


Establishing a legal business presence in Iraq

Companies Law No. 21 of 1997 (amended by CPA No. 64 in 2004) (Companies Law) allows several types of corporate entities to be registered in Iraq (including the Kurdistan Region of Iraq).
For foreign investors looking to enter the Iraqi market, three main vehicles can be used:


Limited Liability Company

According to the Companies Law, foreign investors have the right to establish or participate in Iraqi companies without any restriction, but with the approvals of Iraqi ministries/departments. For example, the establishment of an LLC in Federal Iraq that intends to engage in oil and gas services does require the approval of the Iraqi Ministry of Oil.
Some of the important characteristics of establishing an LLC and its formation under the Companies Law are explained below.
Memorandum of Association
The Memorandum of Association of an LLC is its governing document and should contain the following:

Minimum Capital

The minimum capital of an LLC is IQD 1,000,000 (equivalent to approximately USD 850). The nominal value of each share must be one Iraqi Dinar. The Companies Law prohibits the issue of shares with a higher or lower value. The share capital must be fully paid when the LLC is registered. Cash contributions must be paid into an account with a bank authorized to operate in Iraq (there are several foreign banks that operate in Iraq such as Standard Chartered and Is Bank) and are frozen in the account until documents are presented to the bank showing that the establishment formalities have been completed. Contributions in kind must be stated in the Memorandum of Association, and the value must be approved by all the founders. In certain sectors, the prescribed minimum capital could be higher than the minimum capital. Notably, in the oil sector, the minimum capital set by the Iraqi Ministry of Oil is IQD 2 Billion.


An LLC must not have more than 25 shareholders who may be a combination of legal entities and individuals. An LLC may be established by a single person (including a legal person), there is no minimum requirement for the number of shareholders.

The share capital of an LLC is divided into indivisible shares of a uniform nominal value. Transfer of shares is permitted but subject to a pre-emption right in favor of the other shareholders.


While an LLC cannot be managed by a Board of Directors, it is managed by a General Manager. There is no requirement for managers to be Iraqi nationals; however, the appointment of foreign nationals must be approved by the Iraqi Ministry of Interior (MOI).

The powers of the General Manager, as well as his salary and bonuses, are determined by the General Assembly. A General Manager’s authority includes the power to conduct all transactions and business relating to the performance of the company’s normal corporate activity. According to the Companies Law, and subject to the decision of the General Assembly, the manager of an LLC has the same powers and is subject to the same restrictions that apply to the Board of Directors of a joint-stock company.
A manager of an LLC may be removed from his position by virtue of a decision of the authority that appointed him/her. The authority must give the manager a reason for such a decision.

Liability of Partners

The liability of the LLC partners towards third parties is limited by law to the extent of their investment in the capital of the LLC.

Registration Procedure

An investor wishing to set up a company in Federal Iraq must complete an application and submit it to the Companies’ Registrar in Baghdad.
The application must include the following information concerning the business entity proposed to be registered by the Companies’ Registrar at the Iraqi Ministry of Trade:

Certain documents must also be submitted with the application to register an LLC.

Timeline for Incorporating an LLC

The Companies’ Registrar must obtain the approval of the MOI before issuing a certificate of registration for an LLC that is owned by foreign parties. The timeline for such approval ranges between three to six months, and in some cases, it can even take longer.

Following approval from the MOI, a registration certificate is issued by the Companies’ Registrar. The LLC is then ready to operate its activities throughout Federal Iraq.

Branches and Representative Offices of Foreign Companies

A foreign parent company may establish a branch office in Iraq, which acts as an extension of the parent company, provided the parent company has secured a contract from the Iraqi Government, or a contract with a prime contractor who is contracted with the Iraqi Government. A branch office may only conduct the commercial activities allowed by its parent company and is also bound by the operations envisaged by the contract upon which it relies to establish its presence in Iraq.

In contrast, a representative office may only engage in business development and marketing activities, and thus, cannot engage in any commercial activity in Iraq. A representative office may be converted to a branch office if a government contract, or a contract with a prime contractor of the Iraqi Government, is secured.




The difference between a branch and representation office of a foreign company

The difference between a branch and representation office of a foreign company  1-A company branch or economic enterprises is allowed under this regulation of companies branches or foreign enterprises whose activities were always in Iraq under a treaty or a contract with the state or contracting for implementation of the certain project with the state offices. 2- A representation office is allowed under this regulation for market study and the possibility of work or production or identification for the products and services or contact facilities. A representative office is prohibited from practicing any trading activities or agency.

The required period to finish the registration procedures: The approval shall be obtained to register a branch for a foreign company in compliance with the provisions of article (3-second) of the above regulation. The registration procedures take 3 days in case of submitting all documents required for regulation and relating instructions - The approval of the minister shall be obtained to register a representations office in conformity with the provisions of article (3-third) of a branch of representative offices of foreign companies and economic corporation's regulation No. (5) of 1989.


Registration of a legal business presence in the Kurdistan region of Iraq

The Kurdistan Region of Iraq applies the same Companies Law allowing for 100% foreign ownership but has some procedural differences relating to registration. The most significant difference is the Companies Registrar in Erbil does not require a government contract in order to register a branch office. Furthermore, the timeline to incorporate an LLC or a branch office in the Kurdistan Region of Iraq is considerably shorter, ordinarily ranging between two to four weeks on average.