IRAQ Law and Practice Contributed by: Ahmed Al-Janabi, MENA Associates in association with AMERELLER
Iraqi laws, and records of the investment pro - ject’s duty-free imported materials, specifying their depreciation value. Furthermore, investors are expected to comply with the timeline of exe - cution of the project submitted to the National Investment Commission, and to notify the latter of the project’s commencement, budget, pro - gress and other information stipulated in the Investment Law. According to Article 14 of the Investment Law, the investor must also commit to protect the safety of the environment and comply with laws related to security, health, public order and the The Investment Law addresses dispute reso - lution mechanisms and the applicable law, including disputes between the investor and the Investment Authority, which are to be resolved in an Iraqi civil court. However, the parties may also resort to Iraqi or international arbitration. 3. Corporate Vehicles 3.1 Most Common Forms of Legal Entity The entities most commonly registered by per - sons conducting business in Iraq are limited lia - bility companies (LLCs) and branches of foreign companies. Limited Liability Company LLCs are required to hold at least 51% Iraqi shareholding capital in Federal Iraq. In the Kurd - istan Region, 100% foreign shareholding is still permissible, as the amendment to the Compa - nies Law has not yet been passed by the Kurdis - tan Parliament. An LLC may be established by a maximum of 25 shareholders, who may be legal entities or individuals, or a combination of both. values of Iraqi society. 2.4 Right to Appeal
The minimum capital for an LLC is IQD1 million. Public subscription of shares in an LLC is pro - hibited. The general assembly of shareholders appoint and determine the powers of the man - aging director, who may be a foreign national. Branch of a Foreign Company Another commonly registered entity is the branch of a foreign company. The commercial activity of a branch is limited to the registered activity of the foreign company; thus, the foreign company would be liable for the branch. For the registration of a branch in Federal Iraq, the for - eign company must have been established at least two years earlier. Any managerial changes must be approved through a shareholders’ reso - The application submitted to the Companies Registrar should include a set of documents, including but not limited to: • the shareholder resolutions; • a bank letter; • the passports of the shareholders and direc - tors; • the lease agreement for the company prem - ises in Iraq; and • the incorporation documents of the foreign company in the case of a branch. Timeline It takes approximately six to ten weeks to reg - ister an LLC in Iraq (due to required security checks), and approximately four to eight weeks to register a branch. 3.3 Ongoing Reporting and Disclosure Obligations Shareholder meeting decisions should be noted in the minutes of the meeting and sent to the lution by the parent company. 3.2 Incorporation Process
356 CHAMBERS.COM
Powered by FlippingBook