IRAQ Law and Practice Contributed by: Ahmed Al-Janabi and Sarmad Akrawi, MENA Associates in association with AMERELLER
MENA Associates in association with AMERELLER Princess Street 7 Baghdad Baghdad Governorate Iraq Tel: +964 780 000 3232 Fax: +44 207 691 7215 Email: baghdad@amereller.com Web: www.amereller.com/office/baghdad/
1. Introductory 1.1 Forms of Corporate/Business Organisations
The Companies Law now requires LLCs and JSCs to hold at least 51% Iraqi shareholding capital (by Iraqi individuals or corporations). It should be noted that the Companies Law as amended does not apply to the Kurdistan Region of Iraq (KRI), as to date it has not been passed by the Kurdish Parliament. As a result, 100% foreign participation is permissible in the KRI. The Iraqi Constitution provides the Kurdish Parliament with legislative powers, with the exception of certain matters that are reserved to the federal government. As far as the Kurdish legislature has not made use of the legislative competencies conferred on it, Iraqi federal law applies if it has been either adopted by the Kurd - ish legislature or enacted prior to 1992. On the other hand, the Kurdistan regional gov - ernment has its own ministries and authorities that mirror those of the federal government; how - ever, they operate independently of the federal authorities. This results in the need to register an entity in parallel in the KRI and in Baghdad.
Non-public companies in Iraq are established in accordance with the Companies Law No (21) of 1997, as amended by Law No (17) of 2019 ( “Companies Law” ). The Companies Law rec - ognises two types of companies: • private companies, in which public sector participation, if any, is limited to 25% of share capital; and • mixed companies, in which private persons and public entities jointly establish an entity with at least 25% public sector participation. Private companies may take the form of a lim - ited liability company (LLC), joint stock company (JSC), general partnership, individual enterprise or simple company. Mixed companies may only take the form of LLCs or JSCs. The entities most commonly registered by per - sons conducting business in Iraq are limited liability companies and branches of foreign com - panies.
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