Doing Business in Iraq: Opportunities and Realities
Although doing business in Iraq has its own set of unique and dynamic challenges, the economic potential of Iraq is enormous.
The World Bank’s Ease of Doing Business report and Transparency International’s Corruption Perceptions Index regularly place Iraq toward the bottom of their rankings.
Nevertheless, Iraq is considered to be one of the world’s wealthiest nations, brimming with long-term potential.
Despite the military victory against the Islamic State, terrorism still affects daily life for many Iraqis. Coupled with bureaucracy, weak governance, and the inconsistent interpretation and enforcement of regulations, Iraq may appear daunting to risk-averse investors.
Commercial laws remain outdated and are often misaligned with Western standards, particularly when it comes to contract formation and enforcement.
Iraq is potentially one of the world’s richest countries, thanks to its vast hydrocarbon reserves, large population, and predominantly young demographic.
Legal and Technical Progress
On paper, Iraq has made notable legal and technical progress since 2003. Between 2004 and 2008, Iraq passed around 30 economic and business-related laws, covering areas such as:
- Financial institutions
- Foreign investment
- Intellectual property
- Telecommunications
- Tax reform
Notably, Iraq is among the very few countries in the Middle East that impose virtually no restrictions on foreign investment across most sectors.
Still, more must be done to modernize Iraq’s economy. There is an urgent need for a new, comprehensive legal framework across oil, gas, power, and telecommunications. As expected, any major reform depends on political will—often hindered by political instability in Baghdad, leaving many draft laws unreviewed.
Open for Business
The good news is that Iraq remains open for business, with a generally positive attitude toward Western investors.
Senior Iraqi officials frequently tell the Iraqi-French Business Council:
“We want Western businesses to come. The door is open.”
In addition to Iraq’s vast proven oil reserves, the country’s gas industry is gradually developing and expected to generate significant future revenue. Moreover, Iraq has yet to begin large-scale exploitation of its mineral wealth—gold, platinum, and other valuable resources lie beneath its deserts and mountains.
Power Sector
In the power sector, major projects are being developed with the involvement of leading French companies such as TotalEnergies, which has signed multi-billion dollar agreements in Iraq’s oil and gas sector, and Engie, which is exploring opportunities in power generation and energy infrastructure.
Untapped Opportunities
Investment opportunities exist—and will continue to grow—in nearly every sector, including:
- Manufacturing
- IT and telecommunications
- Agriculture
- Retail
- Healthcare
- Education
- Construction
- Banking and professional services
The Kurdistan Region of Iraq
The Kurdistan Region is a semi-autonomous part of Iraq, with its own government (the Kurdistan Regional Government – KRG), institutions, and judicial system.
Federal Iraqi laws generally apply unless they are specifically amended or replaced by the Kurdistan Parliament. There are also notable differences in how laws are implemented between the Kurdistan Region and Federal Iraq.
More information can be found at:
🔗 www.krg.org
🔗 www.kurdistaninvestment.org
Strategic Investment in Reconstruction
With its abundant natural resources, both the Federal Government of Iraq and the Kurdistan Regional Government are investing billions in reconstruction—the scale of which is arguably unprecedented in modern history.
Current and planned investments include:
- Rebuilding the oil and gas infrastructure
- Laying thousands of kilometers of new pipelines
- Constructing state-of-the-art export terminals
- Developing millions of housing units, schools, hospitals, power stations
- Expanding roads, railways, sewage systems, and ports
Iraq deeply values Western expertise, which creates substantial opportunities for companies with the right level of resilience and long-term vision. However, Iraq is not a destination for short-term profit seekers. As one senior executive put it:
“Iraq is definitely a long-haul destination.”