Iraq is the new Middle East destination for business and investments. Being one of the richest countries in oil and gas; as well as emerging from years of war, and the economic growth being experienced all together put Iraq under the spot light.

Since most foreign companies are interested to invest and establish a legal presence in Iraq; there are several options that companies may wish to consider regarding their incorporation.

Some of them may want to extend into Iraq using a representative office, or conduct business through a branch; others may wish to incorporate a new Iraq entity or partner with locals. All of these options are available under the current Iraqi law depending on the needs, business, governmental contacts, and activities to be exercised in Iraq.

Representative Office/Branch

A representative office is the simplest way to establish a presence in Iraq for exploring, marketing, negotiations and feasibility study activities.The representative office is not allowed to engage in commercial activities or transactions.

The advantage of setting a representative office, is establishing a legal presence; easiness to convert it into a branch once a governmental contract is obtained; keeping the same name of the parent company and the time required to register it as it usually take about a month to a month and half to be registered from the date of submission of the application to the Registrar of Companies.

Initially, all applications are registered as representative offices, with no ability to engage in commercial trade until the foreign company has negotiated a contract with either the Iraqi or the US government. Once a foreign company has a governmental contract, it may apply to transfer its status from representative office to branch. The company will maintain branch status and be authorised to do business in Iraq for the duration of the contract.

Therefore, foreign companies may enjoy the use of their brand on their branch In Iraq. However, the parent companies assume all legal and financial liability for its branch or representative office in Iraq. Some investors may consider this to be a drawback.

New Iraqi entity

Another legal path to consider. is incorporating a new company in Iraq whether with 100% ownership or with an Iraqi national.

Except for some specific activities, the current Iraqi Companies' law allows 100% foreign ownership of companies without any restrictions to nationalities, individuals or companies. The shareholder may be a natural person, a juristic one, Iraqi or other.

Furthermore, some companies' types may be owned by one person, which means that a foreign company or natural person may own solely 100% of an Iraqi company.

The new Iraqi company might be incorporated in one of the following types:

  • Joint stock company
    - The minimum number of owners of a joint stock company is five persons.
    - Owners are liable for company's debt to the extent of the nominal value of their shares.
  • Limited liability company (LLC)
    - An LLC can be formed by one natural or juridical person.
    - Owners are liable for the company's debt to the extent of the nominal value of their shares.
    - The general minimum capital requirement is IQD 1,000,000 (approximately US$850), with exceptions for certain companies such as construction, aviation and others.
    - This company will not have a board of directors, but will be managed by Manager usually known as (Managing Director); who will be responsible for the management as per the authorities granted to him by the general assembly.
  • Joint liability company
    - A joint liability requires a minimum of two shareholders.
    - Owners jointly assume personal and unlimited liability.
  • Sole owner enterprise
    - A sole owner enterprise is formed by one person.
    - Owner assumes personal and unlimited liability.
  • A simple company
    - A simply company is similar to a partnership, with not less than two or more than five partners who contribute shares to the capital.
    - The partners carry unlimited liability to the extent of their shares in the company.
    - A simple company does not need to be registered with the Registrar of Companies Department. A notarised establishment contract signed by all the partners will suffice. A copy of the establishment contract should be placed with the Registrar of Companies.


    The most registered and used type is the LLC as it can be formed with one shareholder, with a limited liability and generally for any purpose (though some exceptions apply). The LLC, as with other Iraqi companies; should have an Arabic name; therefore most of the foreign companies cannot keep their names as it does not have an Arabic meaning.

    The registration process of this type of companies takes between eight to twelve weeks to be completed from the date of submission of the application to the Registrar of Companies.

    Companies' registration document requirements

    In general, all the documents issued outside Iraq should be authenticated (attested) by the competent authorities in the issuing country, and then stamped by the Iraqi embassy or consulate in that country; and translated to Arabic Language if issued in a different one.

    Afterwards, the documents will need to be stamped again from the competent authorities in Iraq "Ministry of Foreign Affairs", and sometimes it will require the taxation department and the Central Bank depending on the document itself.

    All companies, whether representative office, branch or a new Iraqi company are obliged (after registration) to retain both a lawyer and an auditor.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.