Iraq: Investing

FDI in Figures

Taking into account its big security problems, almost a total lack of institutions and consequently a lack of governance, Iraq has had a hard time trying to attract foreign capital. Nevertheless, the country's natural resources such as gas and oil can assure a certain number of investments.

Most of FDI are in the oil sector. The United States and the countries of the European Union represent the main investors of the country. The year 2011 was marked by the signing of a contract between the regional government of Kurdistan and the American oil group ExxonMobil, which is very present in the rest of the country. Never before a company of such importance had signed a contract with the Kurdish authorities, the direct consequence was regarded as an automatic interdiction of investing in the rest of the territory. This ExxonMobil affair was not finalized, which leaves a lot of incertitude regarding the relations with the Kurdish Iraq. Besides the oil sector, the production of cement and the building and public works sector offer good potentials for investment.

Country Comparison For the Protection of Investors

	Iraq	Middle East & North Africa	الولايات المتحدة	Germany
Index of Transaction Transparency*	4.0	6.3	7.0	5.0
Index of Manager’s Responsibility**	5.0	4.6	9.0	5.0
Index of Shareholders’ Power***	4.0	3.4	9.0	5.0
Index of Investor Protection****	4.3	4.8	8.3	5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

Foreign Direct Investment	2008	2009	2010
FDI Inward Flow (million USD)	1,856	1,452	1,426
FDI Stock (million USD)	3,990.1	5,060.3	6,486.7
Number of Greenfield Investments***	18.0	16.0	-
FDI Inwards (in % of GFCF****)	39.3	22.8	-
FDI Stock (in % of GDP)	16.8	28.1	-

Source: UNCTAD - Last Available Data

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

Tax Rates

Sales taxes (hotels and restaurants only).: 10% (hotels and restaurants only)
Company Tax: 12.5% (35% for oil and gas sectors)
Withholding Taxes: Dividends: 0%, Interests: 15%, Royalties: 15%.
Bilateral Agreement: Egypt and Iraq are bound by a Double Taxation Agreement.
Social Security Contributions Paid By Employers: 12%

Country Comparison For Corporate Taxation

	Iraq	Middle East & North Africa	الولايات المتحدة	Germany
Number of Payments of Taxes per Year	13.0	21.6	11.0	16.0
Time Taken For Administrative Formalities (Hours)	312.0	194.1	187.0	215.0
Total Share of Taxes (% of Profit)	28.4	32.8	46.8	48.2

Source: Doing Business - Last Available Data.

Investment Opportunities

Tenders, Projects and Public Procurement: Tenders Info, Tenders in Iraq
DgMarket, Tenders Worldwide
Setting Up a Company: Consult Doing Business Website, to know about procedures to start a Business in Iraq.
Useful Resources: Egyptian Embassy in Iraq
103, Alley 11, Zone 601,
El-Mansour, Baghdad
Phone: (+9641) 5417370 - 5430572 - 5430573
Fax: (+9641) 5566346 - 5639928 - 2425839
Embassy of Iraq in Egypt
City: Cairo
Phone: 00202 - 7358087
Contact the Embassy via Email

Business Setup Procedures

Setting Up a Company	Iraq	Middle East & North Africa
Procedures (number)	11.00	8.10
Time (days)	77.00	20.00

Source: Doing Business.

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