Establishing an office in Iraq is necessary to directly conduct business in Iraq. Foreign investors have several options with regard to entity, the most common of which are:
- representative office
- branch office (requires an Iraqi government contract, if established outside of Kurdistan)
- limited liability company (which can be 100% owned by the foreign investor)
Furthermore, the regional location of the office is an important commercial consideration. The most common regions in which to establish an office are the Iraqi capital of Baghdad, the city of Basra in the south, and the city of Erbil in Kurdistan.
Notarisation of Documents
A key issue in this company establishment or branch application process is the overseas notarisation and authentication of documents. Once this notarisation is complete, these documents must be sent to Iraq, notarised again in Iraq, and translated into Arabic. This procedure can be a time-consuming task and should be undertaken as early as possible.
Role of the Companies Registry
The Companies Registry plays a significant role in the establishment and ongoing monitoring of companies and branches in Iraq. Its role is not simply that of a registry of information but rather its approval is required for various company secretarial acts before it will issue certified copies of the key corporate documents and resolutions needed to conduct business in Iraq.
Deposit of capital
In order to establish a branch or incorporate a company, a statement needs to be obtained from an Iraqi commercial bank to show the deposit of the share capital.
Lease of premises
A copy of a signed lease agreement for premises in Federal Iraq or Kurdistan is required as part of the process of establishing a company, or branch or representative office. Generally, the lease will need to be registered with the Land Registry. It should also be noted that the relevant authorities will visit and inspect the premises before the establishment process is completed.
Application will also need to be made to the Ministry of Trade and the Companies Registry for a trade licence. If specific ministerial approval is needed, it may also be necessary to contact the relevant ministry as directed by the Companies Registrar.
The new company will need to register with the General Taxation Department and have its accounting records legalised by that body. Typically, the firm responsible for registering the company in Iraq will complete this task, provided it has the requisite power of attorney.
The remittance of funds into Iraq and the conversion of those funds into either Iraqi Dinar or another currency must be conducted through a bank authorised by the Ministry of Interior to exchange funds. There are also specific foreign exchange control restrictions which apply to certain industry sectors.