Starting a Business · Iraq
Starting a business in Iraq: foreigner's guide (2026)
Iraq shaded by its starting a business status
Starting a business in Iraq as a foreign investor is significantly constrained under federal law, which requires at least 51% Iraqi ownership in LLCs and JSCs following Amendment No. 17 of 2019, capping foreigners at 49%. Workarounds exist via a branch office (no local-ownership requirement), an NIC-licensed investment project, or by locating in the Kurdistan Region of Iraq (KRI) where 100% foreign ownership remains permissible. End-to-end LLC registration is bureaucratically complex and typically takes 6–8 months.
Key points
Amendment No. 17 of 2019 to Companies Law No. 21 of 1997 mandates that at least 51% of shares in any federal Iraqi LLC or JSC be held by Iraqi nationals or Iraqi-owned entities, leaving foreign investors a maximum 49% stake; the Ministry of Commerce actively enforces this threshold on share-transfer applications.
The Kurdistan Regional Parliament did not adopt Amendment No. 17 of 2019, so 100% foreign ownership of an LLC is permissible in the KRI, making it a preferred entry point for investors seeking full foreign control.
A foreign company may register a branch office in federal Iraq without the 51% Iraqi-ownership requirement; branches can be registered in roughly 3–5 months (or 3 months with expedited fees), though they are operationally more constrained than a locally incorporated entity.
Under Investment Law No. 13 of 2006, the National Investment Commission operates a one-stop-shop and must issue an investment license within 45 days of a complete application; licensed projects can receive up to 10-year income-tax holidays, 3-year import-fee exemptions, and may qualify for ownership-restriction waivers.
The minimum paid-in capital for a federal Iraqi LLC is IQD 1 million (approximately USD 860); end-to-end LLC registration realistically takes 6–8 months due to multi-agency sequential approvals, while the US State Department notes that Iraq has yet to reform the bureaucratic processes that hinder investment despite stated policy goals.
Key sequential steps are: (1) name reservation at the MOCI Companies Registrar (1–3 days); (2) notarisation of articles of association (3–5 days); (3) capital deposit in a local bank; (4) registration application filing with the Companies Registrar; (5) tax registration with the General Commission for Taxes; (6) Chamber of Commerce enrollment; (7) Official Gazette announcement; and (8) municipal business licence.
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