IRAQ Trends and Developments Contributed by: Ahmed Al-Janabi and Sarmad Akrawi, MENA Associates in association with Amereller
although they face similar challenges in navi - gating Iraq’s bureaucratic business environ - ment. Despite the Iraqi Investment Code No 13 of 2006’s provision of a one-stop shop at the National Investment Commission for all licens - ing needs, investors still need to obtain licences and authorisations from each individual ministry, delaying operations for several months to over a year. De-dollarisation policy The Iraqi government’s “de-dollarisation” policy is still continuing, and has now been coupled with a broader move towards mandating elec - tronic payments in nearly all aspects of official transactions, as well as a significant portion of the private sector. For the past two decades, the US dollar has been widely accepted in Iraq for commercial dealings and investment activities. However, in 2023, the government and the Cen - tral Bank of Iraq introduced stringent restrictions on the use of the US dollar in an effort to boost confidence in the Iraqi dinar. These measures included strict conditions for foreign currency transfers and repatriation of profits, leading to a shortage of dollars and a gap between the offi - cial exchange rate and parallel market rates. Recent requirements by the Companies Reg - istrar, as mentioned above, were based on the Federal Budget Law for 2023, 2024, and 2025. These require companies to register an Iraqi website with an Iraqi top-level (.iq) domain and lease an Iraqi PO Box within a 60-day grace period starting from 16 January 2024. Non-com - pliance will result in the suspension of corporate files until these requirements are met, adding more obstacles to the licensing process despite government efforts to streamline it. Although the government has previously pro - posed laws and regulations aimed at digitalising
the company registration process, these propos - als have yet to be enacted into law. Neverthe - less, certain regulations, as mentioned above, have been put in place to initiate digitalisation efforts, including streamlining government pro - cedures, including tax and customs processes, and enacting an access to information law. Meanwhile, discussions are ongoing regarding the repeal of the 2019 law that amended the Iraqi Companies Law, which currently caps foreign ownership of federal Iraqi companies at 49%. However, the current momentum suggests an amendment to this law is more likely, reducing the local shareholding requirement to just 30% of the shares, down from 51%. Presently, foreign investors typically need an Iraqi partner or must devise alternative corporate governance strate - gies to retain control over their businesses. Conclusion While the Iraqi government aims to attract more foreign investment and has initiated infrastruc - ture development, the implementation of legis - lative reforms to streamline processes remains crucial. The construction sector and other attrac - tive sectors will continue to offer opportunities and challenges for investors. Corruption and security risks persist, hindering investment along with the delay in the implementation of the new developments due to the lack of a wide vision and understaffed offices. Real estate remains a significant sector for money laundering. The opaque Iraqi bureaucracy presents challenges and hampers business opportunities. Mitigat - ing these risks requires a nuanced understand - ing of the sector’s practices and frameworks. However, these practices continue to change as new legislative challenges appear, such as the recent overruling by the Court of Cassation. Political and legal instability persists while the government simultaneously seeks to ensure
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