How to start a business in Iraq as a foreigner (2026)
Starting a business in Iraq as a foreigner: restricted.
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.
Legal framework
Companies Law No. 21 of 1997 (as amended by Amendment No. 17 of 2019); Investment Law No. 13 of 2006 administered by the National Investment Commission (NIC)
Key points: starting a business in Iraq
Foreign ownership cap, federal Iraq
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.
Kurdistan Region exception
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.
Branch office route
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.
NIC investment-license pathway
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.
investpromo.gov.iq investpromo.gov.iq investmentpolicy.unctad.org
Minimum capital and timeline
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.
Registration steps
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.
Timeline of decisions
- GuidancePM Al-Sudani Directive: Automate Company Registration & Expand Digital Payments for SMEs
Prime Minister Mohammed Shia' Al-Sudani issued a binding directive mandating automation of company registration processes, simplification of SME procedures, and bank account-opening facilitation for SMEs, to be implemented within six months. The initiative also inaugurated a Digital Transformation and Automation Centre that digitally archived over 103,000 documents and 18 million company records, enabling online transaction tracking.
Muayad & Associates (reporting on official PMO directive)
- Decision · officialWorld Bank B-READY 2024: Iraq Scores Best in Business Entry Among All Assessed Topics
The inaugural World Bank Business Ready (B-READY) report, the successor to Doing Business, gave Iraq its highest pillar score in Business Entry, crediting removal of minimum capital requirements for SMEs and the digitalisation of registration; overall regulatory framework scored 49.39/100, placing Iraq in the bottom quintile due to persistent weaknesses in taxation, insolvency, and market competition.
World Bank B-READY
- GuidanceCompanies Registrar Mandates Iraqi .iq Domain & PO Box for All Registered Companies
The Ministry of Trade's Companies Registrar required every registered Iraqi company to obtain an Iraqi top-level-domain (.iq) website and a local Post Office Box within a 60-day grace period from 16 January 2024, failing which the company's corporate file would be suspended. The measure added a new digital-identity compliance burden on top of ongoing registration obligations.
Al Tamimi & Company
- Decision · officialIraq Launches UNCTAD-Backed Online Single Window for Business Registration (business.mot.gov.iq)
The Ministry of Trade, with support from UNCTAD and the US Government, launched business.mot.gov.iq, a fully contactless portal that collapsed dozens of in-person registration steps into a single digital workflow. Within one year more than 2,981 companies had registered through the platform, a fivefold increase in monthly registrations over the first month of operation.
UNCTAD
- Law · officialCompanies Law Amendment No. 17/2019: 51% Iraqi Ownership Reinstated; Holding Companies Introduced
Published in Official Gazette No. 4554 on 9 September 2019, Amendment No. 17 reversed the post-2004 open-ownership regime by requiring at least 51% of shares in any LLC or joint-stock company to be held by Iraqi nationals or Iraqi-owned entities. The same law introduced holding companies as a recognised legal structure and gave Iraqi-participatory firms priority in government contracts.
Iraqi Ministry of Justice — Companies Law (consolidated text)
- Decision · officialWorld Bank Doing Business 2018: Iraq Recognised as a Reforming Economy for Business Registration
The World Bank's Doing Business 2018 report identified Iraq as having eased business start-up by merging multiple registration procedures, eliminating the mandatory separate tax-authority registration step, and deploying additional resources at the registry, marking Iraq's first notable recognition in an international benchmark for registration reform.
World Bank
- Law · officialInvestment Law No. 13/2006 Enacted: National Investment Commission & 10-Year Tax Holiday
Iraq's National Investment Law established the National Investment Commission (NIC) as an independent one-stop-shop to issue licences, grant a 10-year tax and customs exemption from commercial commencement, guarantee profit repatriation, and allow investors to own or lease land, creating the principal incentive framework still operative today.
UNCTAD Investment Policy Hub
- Law · officialCPA Order No. 64 Amends Companies Law: 100% Foreign Ownership Permitted for First Time
The Coalition Provisional Authority's Order No. 64 amended Companies Law No. 21/1997 to abolish the requirement that Iraqi-registered companies be wholly owned by Iraqis or Arab nationals, permitting 100% foreign ownership of LLCs and joint-stock companies, the foundational liberalisation underpinning post-2003 foreign direct investment, later partially reversed by the 2019 amendment.
CPA Iraq — US National Archives (govinfo.library.unt.edu)
Sources
- state.gov/reports/2025-investment-climate-statements/iraq
- investpromo.gov.iq/
- investpromo.gov.iq/wp-content/uploads/2026/02/Investor-Guide2025.pdf
- investmentpolicy.unctad.org/investment-laws/laws/205/iraq-investment-law-
- tamimi.com/news/new-amendment-to-the-iraqi-companies-law-no-21-of-1997/
- pwc.com/m1/en/tax/documents/doing-business-guides/dbiirq.pdf
- practiceguides.chambers.com/practice-guides/doing-business-in-2025/iraq
- worldbank.org/content/dam/sites/b-ready/documents/pdf/Iraq.pdf
- saltandassociates.net/foreign-business-registration-in-iraq/
Next for Iraq: Crypto & Digital AssetsUnclear
Next topicOrientation, not legal advice: verify against the primary sources linked above. Last verified 24 May 2026. Methodology & how to cite · State of Technology Regulation 2026