Invest in Iraq

How to Invest in Iraq – A Guide for the Iraqi-French Business Community

1. Why Invest in Iraq?

• A Rapidly Emerging Market: With over 45 million people, Iraq offers a large consumer base and significant demand for infrastructure and basic services.
• Government-Backed Economic Diversification: The newly launched Iraq Development Fund (IDF), established in August 2023, aims to support large-scale projects in energy, agriculture, water, and transportation. It has already attracted more than $7 billion in foreign and domestic investment.

2. Key Investment Sectors

• Energy & Infrastructure: Iraq is partnering with global energy companies such as TotalEnergies, which is currently executing the GGIP – an integrated multi-energy project involving gas production, solar energy, and seawater treatment worth up to $27 billion.
• Agriculture & Tourism: Iraq holds vast arable lands and a favorable climate. The country also hosts world-class archaeological sites such as Babylon, Ur, Nineveh, and Najaf, offering untapped tourism potential.

 

• Manufacturing & Services: Iraq is encouraging investments in pharmaceutical production, food processing, logistics, and transportation, with industrial zones and free trade areas such as Basra and Al-Faw offering tax and customs incentives.

3. Legal & Tax Framework

• Investment Law No. 13 (2006) offers tax holidays of up to 10 years, guarantees for profit repatriation, and exemptions from import duties on equipment and raw materials.
• Legal Setup: Foreign investors may establish a local company, open a branch, or partner with Iraqi entities. Requirements include registration with the National Investment Commission (NIC), a local bank account, and legal representation.
• Taxation:
  • Corporate income tax: 15%
  • Personal income tax: 3% to 15%
  • Withholding tax on foreign services: 15%

4. How to Start Investing

1. Submit an investment application via the National Investment Commission (NIC)
2. Choose the appropriate legal structure (LLC, Branch, Joint Venture)
3. Open a local bank account and deposit the minimum capital
4. Obtain sector-specific approvals and licensing
5. Apply for financial support from the Iraq Development Fund

5. Success Factors

• Work with a trusted local legal and financial partner
• Focus on long-term, sustainable projects with social and economic impact
• Leverage government support mechanisms like NIC and IDF
• Monitor regulatory changes and upcoming reforms, particularly post-election developments

 

📎 Useful Links & Resources

Topic	Link
National Investment Commission	https://investpromo.gov.iq/
Iraq Development Fund (IDF)	https://ifd.gov.iq/en
TotalEnergies Iraq	https://totalenergies.com/iraq
GGIP Energy Project in Iraq	https://totalenergies.com/company/projects/gas/ggip-multi-energy-project-Irak   https://ur.gov.iq/index/org-service/10025

 

📞 Need Assistance?
The French –Iraqi Business Council offers full advisory services for foreign investors entering Iraq. We provide legal guidance, feasibility studies, and direct introductions to public institutions and local partners.

✉️ Contact us via email or our website’s inquiry form.

Download Full Guide

This guide provides a comprehensive overview of the legal framework governing foreign and domestic investment in Iraq. It highlights the key laws, procedures, and institutional support mechanisms that facilitate investment, with a focus on recent reforms and incentives aimed at creating a more transparent, secure, and investor-friendly environment. Whether you are exploring opportunities in infrastructure, energy, industry, or services, this guide serves as a practical resource to help navigate the legal landscape and make informed business decisions in Iraq.

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Iraq’s Investment Law No. 13 of 2006, along with its key amendments under Law No. 2 of 2010 and Law No. 50 of 2015, represents a major step toward building a modern and open investment environment. These laws were designed to reduce barriers for investors and offer tangible incentives such as tax holidays, full foreign ownership in certain sectors, and streamlined approval processes. The amendments introduced greater legal clarity, expanded investor rights—including land ownership for specific projects—and reinforced Iraq’s intent to position the private sector as a central force in economic development. Together, these legal reforms signal Iraq’s readiness to welcome strategic and long-term investments.

Overview of Income Tax and Tax Law in Iraq

Iraqi Tax Law

Iraq’s tax system is primarily governed by Income Tax Law No. 113 of 1982, which has undergone several amendments to reflect economic developments and business practices. This law provides a comprehensive framework for taxing both individuals and corporations operating in Iraq.

Main Types of Taxes in Iraq

1. Corporate Income Tax

• A flat 15% tax rate is applied on net profits for both local and foreign companies operating in Iraq.
• Oil and gas companies are subject to special tax rates depending on the terms of their contracts with the Iraqi government.

2. Personal Income Tax

• Progressive tax rates range from 3% to 15%, based on income levels.
• Family allowances and certain categories of income may be partially or fully exempt from taxation.

3. Withholding Tax

• A 15% withholding tax applies to payments made to foreign companies providing services in Iraq without a registered local entity.
• This includes services such as technical consulting, engineering, and indirect supply of goods.

     Important Notes for Investors

• Iraq has signed Double Taxation Avoidance Agreements (DTAAs) with several countries, including France, to help reduce tax burdens on cross-border investments.
• Investment projects licensed by the National Investment Commission (NIC) may benefit from tax exemptions for up to 10 years.
• Investors are strongly advised to work with a certified local tax advisor to ensure proper compliance, benefit from legal incentives, and stay updated on legislative changes.

📞 Need More Information?

For further assistance regarding taxes and doing business in Iraq, please contact the Iraqi-French Business Council through our official website.

🔗 Useful Links

Description	Link
General Commission for Taxes (الهيئة العامة للضرائب)	https://tax.mof.gov.iq
Ministry of Finance – Iraq	https://mof.gov.iq/Pages/MainMOF.aspx
National Investment Commission (NIC)	https://investpromo.gov.iq/en/