Setting up a foreign office
Iraq welcomes foreign companies and the establishment procedures are consistent with international standards. ICBC offers guidance, contacts, documents translation, forms, templates and other services to get members started. To set up and run a foreign office in Iraq, the first step is to register with the Ministry of Trade’s Foreign Companies Department. The Ministry allows foreign companies to operate an office in two ways:
  • Branch office: in order to open a branch office a company must first secure a contract with an Iraqi entity
  • Representative office: foreign companies can establish a representative office without preconditions
In order to register a branch or representative office, the company must lease premises in at least one location. A company is entitled to have one or more premises in Iraq. The location of the premises registered with the Ministry of Trade will be considered head office and subject to 9% tax based on the lease annual value. The 9% is applicable to premises used for commercial purposes only.
Branch/representative Office Manager.
Any company operating in Iraq must be represented by an Office Manager. Foreign companies are required to issue a Letter of Authorization (LOA) stating the duties and responsibilities of the Iraq Office Manager.
Appointment of professionals
Companies operating in Iraq must nominate the following professionals:
  • Corporate Attorney
  • Corporate Auditor
  • Corporate accountant or bookkeeper
Foreign companies are subject to taxation in Iraq based on each contract they obtain and must report annually. The taxation is based on profits realized on each project, as stated by an Iraqi certified accountant or accounting firm. The corporate tax brackets are as follows:
  • 3.8% of supply contracts
  • 4.8% of supply and execution projects
Social Security
Iraq’s Labor Law Iraq stipulates the following contributions by both employees and employers:
  • 5% of the employee’s wages to be paid by the employee
  • 12% du salaire de l'employé est payé par l'employeur
NB: When employing Iraqi citizens, they commonly refer to their net salaries. Therefore, employers should take into account the extra costs of both the 5% and 12% taxes mentioned above.
Insurance against the loss of life and property may be purchased in Iraq from various international companies.
Foreign employees
Skilled foreign office workers or laborers may be hired on contract if they obtain work permits/visas. Certain provinces such as Basra and Kurdistan provinces can directly issue their visitor visas or work permit visas without asking Baghdad for permission. However, entry and exit from Iraq would be permitted only through the entry points of the provinces that issued those visas. A visa issued by the Federal Government in Baghdad permits entry and exit from any port or airport in Iraq.
It is much less complicated to register office vehicles in the name of a trusted individual than in the name of a foreign company. If the vehicle is to be operated by more than the one registered person,they may issue authorizations to other parties. It is advisable to obtain a Public Notary’s endorsement of the extra authorizations.