After being in a state of unrest for decades, the defeat of terrorism in Iraq brought positivity, and the world saw a new and prosperous era of economic growth. As the country provided local and foreign investors with tons of opportunities to grow and excel, it became necessary to introduce new laws and regulations to protect their rights and ensure that all investors adapted and conformed to the Iraqi legal framework. This led to the introduction of Investment Law No. 13 of 2006.
The law lays out the foundation for encouraging and promoting foreign investment in Iraq through strategic initiatives such as:
- Tax incentives
- Investor guarantees
- Obligations of investors
- National Investment Commission establishment
Enacted in 2006, Investment Law No.13 was officially published in 2007 in the Official Gazette. However, the law was amended in 2009 by the issuance of Investment Law No. 2 of 2010. This change included an essential provision detailing the foreign land ownership rights for foreign companies investing in Iraq.
Later in 2015, the law was amended again. It issued the Investment Law No.50 of 2015. The purpose of the law is to bring more investments in the country and modern technologies to improve and develop Iraq.
Insight into Investment Law in Iraq—Understanding the Main Benefits
Here are the top benefits of the investment law in Iraq for foreign investors:
Duration
Did you know that the duration of the investment previously set for up to fifty renewable years became 100 years under the Investment Law’s Article 11?
Fair Compensation for the Investor
Moreover, under Article 12 of the Iraqi Federal Investment Law, nationalization or expropriation of an investment project or ownership revocation is prohibited, whether done in parts or as a whole, unless there is public interest involved. The investor is entitled to be fairly compensated.
Other benefits of the Investment Law in Iraq that are worth highlighting are:
- Exemption from custom duties
- Liberty to market products of the investors
- The right to establish commercial offices and branches in Iraq
- The right to establish a joint commercial entity with a local or foreign investor
- Flexibility on the restrictions of fund transferring, including profits
Land Ownership
The Investment Law granted and authorized both foreign and Iraqi investors the right of land ownership allocated for industrial or residential projects that belong to the state or the public sector solely or in partnership to not conflict with the intended purpose.
Furthermore, investors can buy land that belongs to the mixed or private sector for building housing projects.
Smooth Dispute resolution For All
The Investment Law of Iraq lists down multiple provisions on dispute resolution and applicable laws for all, including disputes that occur:
- Between the Investment Authority and the investor
- Between employees and the investor
- With different authorities included in the licensing process
Requirements for Getting Your Investment License in Iraq
As we discuss the Investment Law in Iraq, it is vital to know the application requirements for getting an investment license to make the most of the benefits stated above. Therefore, in this section, we’ll focus on the requirements you must fulfill to get licensed in Iraq as an investor.
When applying for an investment license, make sure:
- You have a request form from the Investment Commission
- Letter of confirmation pertaining to the financial capability of the investor
- A letter showing your financial capability approved by an accredited bank
- Complete details of the investment projects performed by the investor within and outside Iraq
- Crucial information like economic viability and timeframe for the new investment project completion
Once all the requirements are met, the Investment Commission will review the application and provide you with a decision in 45 days. If the Investment Commission approves the application, then all other concerned authorities will be required to issue permits and licenses to you. These authorities have only 15 days to make their decision.
If there is any disagreement or dispute between concerned authorities and the Investment Commission, it shall be brought before and resolved by the Council of Ministers.
Why Do You Need a Seasoned Lawyer in Iraq to Navigate You Through the Investment Process?
It is advisable to work with a seasoned lawyer for all the right reasons. Although the Investment Law in Iraq provides reasonable rights and benefits to investors, you need to know certain reservations and legal complexities before moving forward.
For example, there lies an ambiguity in the taxation provisions under the Investment Law as it is difficult for investors to determine what falls in the exempted official fees, such as whether the stamp duty set for the investment contracts is exempted or not.
Similarly, investors may also face problems after the investment contract is signed. For example, it may take a long time to initiate procedures for land ownership transfer when contracting with a governmental entity that owns the land.
Also, the investment license cost is more than 250 million US dollars. But even after paying this amount to the Investment Commission, investors still have to wait for other concerned authorities to decide on license approval. This practice leads to delays and makes it utterly difficult for investors to make crucial and time-sensitive investment decisions.
However, with a lawyer in Iraq by your side, you don’t have to worry about the legal complexities or delays. Our lawyer with decades of experience will help you navigate through smoothly while protecting your rights so that you can invest in Iraq confidently and work on your project without any stress or difficulty. We can also help you with insurance laws and fulfill all the requirements to get insured and licensed in Iraq. For more information or assistance, contact us today. Book a consultation now.
Article written by :
Mustafa Muayad
mustafa.muayad@muayadandassociates.com
Founder & Managing Partner
Muayad & Associates