IRAQ Law and Practice Contributed by: Ahmed Al-Janabi, MENA Associates in association with Amereller
These provisions are designed to promote local par - ticipation and ensure compliance with national owner - ship requirements. 2.4 Antitrust Regulations In Iraq, there is no specific antitrust legislation gov - erning business combinations. Instead, general legal provisions and other regulatory measures address related issues. The Competition Anti-Monopoly Law of 2010 sets out certain limitations and restrictions on the market prac - tice, but it does not deal directly with the control or limitation on merger transactions or the acquisition of shares in companies. 2.5 Labour Law Regulations Based on the Iraqi Labour Law No 13 of 2015, the main requirements include the following. • Local employment requirement – at least 50% of the company’s employees must be Iraqi nationals. • Foreign worker permits – foreign employees must obtain a work permit and a strict multi-entry visa. The work permit should be issued in the name of the investor or another designated company. • Social security contributions – all employees must pay social security contributions. Foreign employees may be exempt if they are covered under a social security scheme in their own country. These regulations ensure that companies comply with local employment standards and social security obli - gations when acquiring or operating in Iraq. 2.6 National Security Review All foreign investors undergo a national security review before any M&A is finalised. • Security clearance process – the process is con - ducted by the National Security Office, the Ministry of the Interior, and the Intelligence Office. • Processing time – the review typically takes 10 to 15 days. If no objections or additional obligations are raised during this period, the Companies’ Reg - istrar proceeds with the M&A.
This review ensures that national security considera - tions are met prior to completing any acquisition.
3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments M&A in Iraq have generally been straightforward. Until 2024, demand for these transactions was relatively low, and there have not been any significant court decisions or legal developments specifically related to M&A activity. 3.2 Significant Changes to Takeover Law No significant changes have been made to takeo - ver law in the past 12 months. The existing condi - tion, which limits foreign investors to a maximum of 49% ownership, remains in place. This restriction has encouraged investors to partner with local stakehold - ers or invest in existing companies rather than estab - lishing new entities. It is not customary in Iraq for a bidder to build a stake in the target company prior to launching an offer. Instead, M&A are based on the target company’s existing status. Due Diligence Focus • Business operations: bidders concentrate on evaluating the company’s operations and business model. • Liabilities and financial health: a thorough review of outstanding liabilities and financial stability is undertaken. • Employees and shareholders: a detailed analysis of the workforce and existing shareholder structure is carried out. 4. Stakebuilding 4.1 Principal Stakebuilding Strategies Stakebuilding Strategies in Iraq In summary, the primary strategy in Iraq is to conduct comprehensive due diligence rather than engaging in pre-offer stakebuilding.
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