Introduction
The Republic of Iraq “IRAQ “has its standalone law concerning formation of legal entities under the companies’ law number 21 for the year 1997 an amended by law no. 17 for the year 2019. collectively called the law. the law states that foreign companies are allowed to be registered, or being shareholders in Iraq with the competent authorities by taking on of the below forms:

• Limited liability company (LLC) foreign shareholders shares restriction applicable.
• Branch office of a foreign Company. Foreign shareholders shares restriction not applicable.
• Joint stock company (JSC). Foreign Shareholders share restrictions applicable.
• Holding companies. Foreign Shareholders shares restriction Applicable.

Nothing that joint ventures are not recognized as legal entity under Iraqis companies’ law.

The most common forms of companies’ registration are the LLCs and branches of foreign companies, where the holding companies is a new concept of legal entities recognized in Iraq.

Foreign ownership restrictions & corporate restructuring

• Amendment no 17 for 2019 to the company’s law has abolished the right and privilege for foreigners under the previous amended law to hold 100% of the shares in Iraqi companies, and now it is mandatory to have in Iraqi shareholder(s) with a share of it least 51% of the company prescribed shares.
• Changing the shareholding structure call the need and business requirements to restructure the management rights, power, signing rights, etc. therefore, a foreign shareholder is advised to consult a local law firm to undertake the restructuring of the company to preserve and secure the rights and interests of the foreign shareholder.

Forms of legal entities “business vehicles” – Available for foreigners

• Selecting legal entities largely depends on the potential investors
• “Foreigners corporates |Individual” 
• Which legal entity mostly suits Their requirements, business activities, capital requirements, whether or not they are allowed to fill management positions, e.g. manager, deputy manager, member of board of directors etc. all above are indicative but are not limited elements but practically determines which legal entity is recommending, this is without ignoring the businesses climate and other factors other than legal aspects

 A. The limited liability company (LLC)

• According to law No. 21 for 1997, an LLC can be established with one shareholder or more, up to a maximum of 25 shareholders.
• It can be set up with one director who can be a non-resident foreign national furthermore, share capital of at least
• (1,000,000) must be deposited with an Iraqi bank prior to company registration.
• Any foreigner, whether a natural person or a legal entity, must pass security clearance by the Iraqi ministry of interior (MOI) before being permitted to becoming a shareholder in an Iraqi company. the procedures approximately but not a definitive timeline may take generally (6) six weeks depending on the process of the registration application by the registrar of Companies and may take considerably longer in specific cases and/or circumstances. Shareholders may transfer the shares in an LLC and, if such transfer involves a foreign buyer the same security clearance procedure will apply again.
• To register an LLC company, the applicant is required to submit the following documents to the company’s registrar of the Ministry of trade.
• Proposed name of the company.
• Type of intended business activity (s);
• Head office address. and contact details (including address, phone number, mobile number, and email address);
• Details of the founders. including id and copy of passport, contact details etc.);
• Memorandum of association.
• Share capital.
• Appointment of an auditor.
• Appointment of the LLC’s manger.

FAQ’s	Limited liability company “LLC”	Branch office	Joint stock Company “JSC”	Holding company
Corporate tax payable in Iraq	15%	15%	15%	The related law has not yet identified the mechanism for calculating taxes.
How long does it take to open a company bank account?	Around 1-2 months with governmental banks around 4-14 days with private banks.	Around 1-2 months with government banks around 4-14 days with private banks.	Around 1-2 months with government banks around 4-14 days with private banks.	Around 1-2 months with government banks around 4-14 days with private banks.
Corporate bank account needed?	Yes	Yes	yes	yes
Can rent office in Iraq?	Yes	Yes	yes	yes
Can rent in a residential area?	No	No	No	No
Tenancy agreement required before incorporation?	No	No	No	No
Allowed to import raw materials?	Yes	Yes	yes	yes
Allowed to export goods?	Yes	Yes	yes	yes
Can the entity hire expatriate staff in Iraq?	Yes	Yes	yes	Yes
Do you need to visit Iraq for incorporation/registration?	No	No	No	No
Resident director/manger required	yes	yes	yes	yes
Resident shareholder required?	No	No	No	No
Minimum number of directors	1	1	1	1
Minimum number of shareholders	1	Not limited	5	1
Individual shareholders allowed	yes	Not applicable	yes	yes
Corporate shareholders allowed?	Yes	Not applicable	yes	Yes
Corporate director(s) allowed to be shareholders?	Yes	Not applicable	yes	Yes
Annual return declaration is required to be submitted to the tax authority?	yes	yes	yes	Yes
Accountant needed	yes	yes	yes	Yes
Lawer needed	yes	yes	yes	Yes
Can I transfer my turnover/profit generated in Iraq outside the country?	yes	yes	yes	Yes
Total business setup fees/ one-time payment	Around 1500$	Around 3000$	Around 3000$	Around 4000$

Kurdistan Region of Iraq

In Kurdistan region of Iraq “KRI”, the Federal Companies Law No. 21 for the year 1997, as amended, is applicable and enforce, on the other hand, the Regulation No. 5 for the year 1985 “The system of branches and representation offices of foreign companies and economic institutions” is currently in force.

The process of registration starts at The General Directorate of Company Registration at the one of Ministry of Trade branch in Erbil Dohuk or Sulaymaniyah depending upon the location of operations in case that a company operates in more than one governorate in KRI, then the registration is needed in the two or three governorates that the operations take place in.

If you are doing business in the KRI, you are required to register a legal presence:

• Limited liability company “LLC”
• Foreign branch office.
• Joint-Stock Company “JSC”.

The most common forms of companies’ registration for foreign entities are the LLCs and branches of foreign companies, where the Holding Companies are not recognized as the KRI did not approve the latest amendment to the Iraqi Companies Law No. 17 of the year 2019.

No Foreign Ownership Restrictions : Amendment No. 17 for 2019 to the Companies Law was not adapted by the Parliament of KRI, and accordingly it is not mandatory to have an Iraqi shareholder(s) with a share of at least 51% of the company prescribed shares, such a condition is in force in the other remainder of Iraq’s jurisdiction except for KRI

Forms of Legal Entities “Business Vehicles” Available for Foreigners: Selecting legal entities largely depends on the potential foreign investors (Corporates or Individuals) and selecting which legal entity suits their requirements, business activities, capital requirements, whether or not they are allowed to hold management positions, e.g. manager, deputy manager, board of director, etc. All above are an indicative but are not limited elements, but practically, support the decision and to determine which legal entity is recommended to form, or take part of, this is without ignoring the businesses environment and other factors other than the legal aspects.

Limited Liability Companies “LLC’s”.

Foreign investors have the right to establish or participate in KRI companies without any ownership restriction/limitations, but with the approvals of the relevant KRI’s ministries/departments as applicable at the time of commencing the formation procedures is in force as a condition to register an LLC.

A limited liability company is subject to the corporate governance rules of Law No. 21/1997 the “Companies Law“) A company may participate in commercial activities as long as they are mentioned in the company’s documents of registration with the competent Chamber of Commerce or any other province chamber of commerce all over Iraq. The company’s constitutional documents must also set out its objectives and corporate powers. It is not possible to use a “general purposes” clause.

Some of the important characteristics of establishing an LLC and its formation under the Companies Law are explained below, where the Memorandum of Association of an LLC is its governing document and should contain the following:

• Name and form of the company, and its objectives;
• Name, address, occupation, and nationality of the founder(s); and.
• Share capital.

The timeline to incorporate an LLC in KRI is considerably shorter in comparison with other regions in Iraq, ordinarily ranging between two to four weeks on average.

Legal requirements for registering a new Limited Liability Company (LLC). Below is an example of requirements, however, the below list is not exhaustive.

• Corporate name must be booked at the local Chamber of Commerce;
• An application form must be completed:
• Articles/ Memorandum of association must be drafted and signed;
• For each corporate shareholder: a certificate of incorporation; articles of association/charter, the financial statements for the last fiscal year, and a power of attorney in favor of a Kurdistan region lawyer is to be signed by the authorized signatory of the corporate shareholder. For individuals; providing copies of their ID’s is required.
• Proper valid lease agreement.
• Appointing a legal adviser.
• Appointing an auditor.