Doing Business in Iraq: Frequently Asked Questions

Answers to the questions foreign companies ask us most often about doing business in Iraq. This page is general information, not legal advice for your situation. Last reviewed October 2026.

Questions foreign companies ask us most

Can a foreign company do business in Iraq without registering?

Not on an ongoing basis. A foreign company that carries on business in federal Iraq needs either a registered branch or a local company with the Ministry of Trade companies registrar. Under the Foreign Company Branches Regulation No. 2 of 2017, as amended, the parent must have existed for at least one year, and each branch must appoint a legal advisor who is a member of the Iraqi Bar Association. See our guide on how to register a foreign company branch in Iraq.

Should we register a branch or set up a limited liability company in Iraq?

A branch is an extension of the parent company, so the parent carries its liabilities and the branch can only carry on the parent’s own activities. A limited liability company is a separate Iraqi legal person whose shareholders are liable up to their capital. The right choice depends on the contracts you will sign, your tax position, any sector ownership limits and how you plan to exit.

Do we need a National Investment Commission licence to operate in Iraq?

Not to trade or perform contracts. An investment licence under Investment Law No. 13 of 2006, as amended, is what gives a project access to the law’s incentives, such as tax and customs exemptions and access to land. It is a separate step from company or branch registration and does not replace it.

Who is responsible for work permits for foreign staff in Iraq?

The employer. Under Labour Law No. 37 of 2015 and Instructions No. 1 of 2026 on Recruiting, Employing and Licensing Foreign Workers, the employer files the application, and foreign staff cannot start work before the permit is issued. The permit lasts one year and is renewed in its final month. Foreign workers may not exceed 50% of the workers on a project. Residency is a separate process. See our guide to work permits for foreign staff in Iraq.

What social security contributions do employers pay for foreign workers in Iraq?

Under Article 14 of the Retirement and Social Security Law for Workers No. 18 of 2023, the employer contribution for an Iraqi worker in most sectors is 12%. For a foreign worker the State’s 8% share does not apply, which on our reading of Article 14(2)(c) brings the employer’s share to 20%. Employers in the sale of hydrocarbons pay 25%.

How are foreign contractors taxed in Iraq?

Foreign contractors are taxed on Iraqi source income under Income Tax Law No. 113 of 1982, as amended. Under Instructions No. 2 of 2008, a contract performed in Iraq is taxable, while a supply signed and completed offshore in the Iraqi party’s name is not, and Iraqi contracting entities withhold tax from every payment. The final payment, retentions and guarantees are not released without a tax clearance certificate, which must be obtained within 180 days of completion. Foreign oil companies and their subcontractors pay tax at 35% under Law No. 19 of 2010. See our guide to tax and withholding for foreign contractors in Iraq.

Can a contractor limit decennial liability in an Iraqi construction contract?

No. Article 870 of the Iraqi Civil Code makes the architect and contractor liable for ten years from completion and delivery for total or partial collapse of buildings and other fixed installations, and for defects that threaten their solidity and safety. Any clause intended to exempt from or limit that liability is void. A claim must be brought within one year of the collapse or discovery of the defect, and Article 872 provides a defence where the defects arose from causes that were not foreseeable at the time of construction.

Which rules govern Iraqi public contracts signed in 2026?

Public Contracts Implementation Instructions No. 1 of 2025, published in Al-Waqa’i al-Iraqiyya issue 4849 on 17 November 2025, came into force on 15 February 2026 for contracts above IQD 100 million. Contracts signed under the 2014 instructions remain governed by them, so the signing date decides the regime. The new instructions require a 5% performance guarantee and, for the first time, allow parts of it to be released after final handover of completed sections.

Can a foreign arbitral award be enforced in Iraq?

Yes. Iraq joined the New York Convention by Law No. 14 of 2021, and it has applied to Iraq since 9 February 2022. Iraq applies it only to awards made in another member state on a reciprocity basis, only to commercial disputes, and not to awards issued before it took effect. Enforcement is sought through the Iraqi courts. The reservations and the wording of the arbitration clause both affect the outcome, so the clause should be reviewed before the contract is signed, not after the dispute starts. See our guide to enforcing a foreign arbitral award in Iraq.

Is a company registered in the Kurdistan Region also registered in federal Iraq?

Not automatically. The Kurdistan Region has its own company registration system. The federal registrar in Baghdad keeps a separate register of foreign companies registered in the Kurdistan Region and accredited in Baghdad, so a company working on both sides should confirm its status in each.

Do we need an Iraqi commercial agent to sell our products in Iraq?

Usually yes. Under the Commercial Agency Organization Law No. 79 of 2017, a foreign company that sells or distributes goods or services in Iraq through a local partner must use a licensed Iraqi agent, either an Iraqi individual or a 100% Iraqi owned company, and the agency contract must be registered with the companies registrar. Goods brought in for trading through customs must pass through the registered agent. See our guide on Iraq’s commercial agency law.

Can Iraq Gate represent us before the Iraqi courts and authorities?

Yes. Our Baghdad team is admitted to the Iraqi Bar, appears before the Iraqi courts and files registrar applications in person. Iraq Gate advises on Iraqi law only and does not practise United States law.

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