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Facts and Success Tips on Operating in Iraq

Post By: Mustafa Muayad - Founder & Managing Partner mustafa.muayad@muayadandassociates.com Print Post

Facts and Success Tips on Operating in Iraq

Ever since 1980, the Iraqi economy has been affected adversely due to wars, militarization, and a decade of international sanctions. However, the recent post-war transfer of sovereignty back to the Iraqi Interim Government has truly changed the political and economic face of the nation. It has indeed brought significant financial and economic reforms.

The influx of foreign investment and a secure environment altogether are driving economic growth across sectors, including construction, energy, and retail, to name a few. Nonetheless, Iraq’s natural resource base makes it one of the top places to invest in with the increasing petroleum production and export, which continues to set Iraq on the path to sustainable economic growth.

As Iraq presents tons of opportunities for investors and business owners to maximize their returns, many business owners plan to launch their operations in the country and enter the local market. However, before you do that, make sure to gain thorough knowledge about the country, business culture, and people’s behavior to operate in Iraq successfully. And this is precisely what we will cover in today’s post.

Let’s get started. But first, here are some quick facts about Iraq that every business owner should know:

Quick Facts about Iraq

Approximately 84 percent of the exports of Iraq are generated from crude oil, which is sent to countries like China, the US, South Korea, and India.

  • The official languages of Iraq are Arabic and Kurdish
  • Christians are the most populous in the country after Muslims
  • Bagdad is the capital of Iraq
  • Iraq is located in Western Asia. It is bordered to the north by Turkey, to the east by Iran, to the southeast by Kuwait, and south by Saudi Arabia. Jordan is located to its southwest, while Syria lies on the west.
  • The population of the country is around 39.31 million, which makes it a huge market.

· Iraqi Society and Business Culture

The population in Iraq comprises numerous ethnic groups, such as nearly 77 percent are Arabs, approximately 19 percent are Kurds, and the rest are either Assyrians, Armenians, or Turkomans. The majority of the people in Iraq are Muslims.

Islam prescribes a way of life and governs legal, political, and social behaviors. It organizes one’s daily life by providing moral guidance for both society and the individual. Therefore, when operating in Iraq, foreigners must be mindful of the critical role their religion plays in shaping people’s attitudes, behaviors, and identities.

Tip#1—When it comes to Iraqi culture, hospitality is deeply engrained. So, when you meet a potential customer, partner, or investor, you must greet them with a handshake coupled with a smile and eye contact and proceed with their formal greeting ‘salaam.’ However, with women, prospects wait for them to extend their hand or else greet with a salaam.

Tip#2—Similarly, when you make an appointment on the phone with a prospect or partner, it is common to send an email for meeting confirmation. Plus, before the meeting, make sure to send the meeting’s agenda to the party, that too in their local language, Arabic.

Tip#3—Most often, business cards are exchanged during the meeting. Therefore, to maximize business opportunities and grab more orders or attract more customers, make sure to get your cards printed in both Arabic and English.

Tip#4—For foreigners, closing deals in Iraq can be frustrating because decision-making is rather slow. Therefore, when you set up operations in Iraq and engage in business dealings, stay enthusiastic about the dealings without losing hope amid the negotiation process. It is advisable to show interest and zeal to close the dealings successfully.

Tip#5—To increase business dealings’ success rates, it is recommended to publish all business materials (promotional or negotiation documents, final contract) in both English and Arabic languages. This will help you get your business message across to prospects, partners, and investors who otherwise don’t understand English or need more clarity before they can make a final decision.

· Communication Style, Structure, and Hierarchy in Iraq

Tip#6—Iraqi local business owners are blunt. If you’re looking for partnerships with them to set up business operations in Iraq, be prepared for probing questions. These can include you, your intentions, and your company.

Tip#7—As companies in Iraq are hierarchical in structure, foreigners will feel a strong sense of authority at the senior level. A huge power gap exists, creating a prominent separation between those in the subordinate and senior positions. Therefore, as a direct consequence of the hierarchy in the company, big decisions like company negotiations, dealings, mergers, and acquisitions are only made by people at the top of the organization. This may cause delays in business decisions hence patients in dealings are recommended.

Tip#8—Iraqi business culture revolves around trust and mutual respect. So, as seasoned lawyers in Iraq, we advise new business owners to focus on taking time out to build long-term and trust-based good working relationships with local business colleagues. After all, respect overrides most societal rules and is imperative to successful business relationships.

To learn more success tips or to establish an operation in Iraq, contact our corporate lawyers. Discuss your goals with our team, and we’ll provide you with the best advice and legal actions to set up your business in Iraq smoothly and in conformance with the laws. From tax-related issues to negotiations, corporate dealings, and business incorporation steps, our lawyers can help you navigate through all with sheer confidence—saving you time, energy, and money to spend on other areas of your business. Schedule a consultation today.


Article written by :

Mustafa Muayad
mustafa.muayad@muayadandassociates.com

Founder & Managing Partner
Muayad & Associates