IRAQ Law and Practice Contributed by: Ahmed Al-Janabi, MENA Associates in association with Amereller
1. Trends 1.1 M&A Market
• Due diligence – verify the company’s legal stand - ing, financial health, and any restrictions on share transfers. • Agreement and documentation – sign a share pur - chase agreement and obtain necessary approvals per the company’s articles of association. • Regulatory compliance – ensure compliance with Iraqi Companies Law, including the 51% local ownership rule for foreign investors. • Submission to the Companies’ Registrar – file the transfer request with required documents, includ - ing the agreement and updated records. • Approval and registration – upon approval, the new shareholder structure is officially recognised. 2.2 Primary Regulators In Iraq, the primary regulator overseeing M&A is the Companies’ Registration Department under the Min - istry of Trade. This department is responsible for the registration and monitoring of both domestic and for - eign companies. Its main tasks include the following. • Online registration – provides an online platform for registering and updating company details, with downloadable forms and clear guidelines. • Fee schedules and documentation ‒lists current fee information and detailed instructions to ensure compliance with Iraqi corporate law. • Regulatory updates – publishes news and announcements on legislative changes and regula - tory amendments. • Searchable company database – allows users to verify company registration status and access detailed company information. • Support – includes contact details for further assis - tance and clarifications on the registration process. 2.3 Restrictions on Foreign Investments There are restrictions on foreign investment in Iraq. According to the amended Iraqi Companies Law No 21 of 1997, as amended in 2019: • foreign investors are limited to a maximum of 49% ownership in any company; and • at least 51% of a company’s shares must be held by Iraqi nationals.
Throughout the past year, there has been a fur - ther increase in M&A activity compared to previous years. New investors continue to enter into the mar - ket, often partnering with local shareholders. This is being achieved either through existing companies or through the merging of multiple entities, reflecting a growing trend in strategic collaborations. 1.2 Key Trends Top Trends in the Last 12 Months Increased foreign investment and partnerships A key trend has been the rise in companies partnering with local businesses. In some cases, foreign inves - tors are acquiring full ownership through the permis - sible legal means, especially under the investment law, while others are forming strategic partnerships to enter the market. Expansion of distribution and agency agreements Another significant development is the growing pres - ence of distribution and agency agreements, with more international businesses entering the Iraqi mar - ket through these structures. 1.3 Key Industries Over the past 12 months, several industries have seen notable M&A activity, including the following. • Food industry – increased investment and consoli - dation within food production and distribution. • Automotive industry – a rise in M&A, particularly in car manufacturing and dealerships. • Construction – growing partnerships and acqui - sitions to support infrastructure and real estate development. • Oil and gas – significant M&A activity, driven by market expansion and foreign investment. 2. Overview of Regulatory Field 2.1 Acquiring a Company Share Transfer Process in Iraq The transfer of company shares in Iraq involves the following steps.
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