Doing Business in Iraq: Regulations & Requirements (2025 Guide)

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 Iraq is becoming one of the most strategic markets in the Middle East, driven by vast natural resources, significant reconstruction needs, and increasing demand for international expertise. Whether you are an investor, contractor, oil & gas operator, service provider, or a new market entrant, understanding Iraq’s legal, tax, and regulatory environment is essential for successful and compliant operations.

This guide provides a clear, accurate, and up-to-date overview of the requirements for doing business in Iraq, based on current laws, market practice, and regulatory standards.

Foreign companies seeking to operate in Iraq must choose the correct legal presence. Each has different obligations, tax exposure, and scope of activity.

A. Branch of a Foreign Company (Most Common):

• Requires registration with the Companies Registrar (MoT)
• Mandatory for companies executing a contract with a government entity
• Fully taxable in Iraq
• Must appoint a local manager and maintain statutory accounting records
• Valid for the duration of the contract
   

Best for: EPC contractors, oil & gas service providers, suppliers, engineering firms.

B. Trade Representation Office (RO)

• Cannot conduct commercial activity
• Used for marketing, liaison, research, tenders
• No revenue allowed
• Not taxed unless converted into a branch
   

Best for: Companies exploring the market before committing to operations.

C. Iraqi Limited Liability Company (LLC)

• Allows commercial operations in the private sector
• Requires at least two shareholders
• Can be 100% foreign-owned
• Subject to Iraqi corporate tax and social security rules
• Must operate from a leased office inside Iraq
   

Best for: Long-term investment, trading, manufacturing, or expansion into multiple sectors.

 Iraq’s Labour Law No. 37 of 2015 governs employment rules.

Key points:

• Written contracts are mandatory
• Standard working hours: 8 hours/day, 48 hours/week
• Overtime compensation required
• Annual leave: Minimum 21 days, increasing with seniority
• Termination rules require notice and severance conditions
• Social security contributions starts from 17% (12% employer + 5% employee)
   

Foreign employees require:

• Work permit
• Residency card (Iqama)
• Employer sponsorship

• Corporate income tax rate  15%
• Oil & gas sector: 35%
• Branch profits taxed as if earned locally
• Withholding tax on services: 1.8%–15% depending on sector
• Payroll tax: Progressive up to 15%
• Capital gains taxed at normal corporate tax rate
   

Full details can be found in Iraq Tax Guide.

•  Transactions often conducted in IQD
• USD widely used in contracts but monitored by the Central Bank
• Cross-border payments may require tax clearance
• Banks require:
• Company registration certificate
• Tax registration
• Office lease 
• Authorized signatory documents

 Companies importing materials into Iraq must comply with:

• Pre-inspection (SGS, Bureau Veritas, or approved bodies)
• Certificate of Conformity (CoC)
• Customs duty (typically 5–30%, depending on category)
• Oil & gas imports often require specific approvals from MOO or relevant operator
   

For southern Iraq (Basra), customs procedures are more streamlined through:

• Umm Qasr Port
• Safwan Border Terminal

 Registered companies must submit:

Annually:

• Audited financial statements 
• Corporate income tax return
• Social security annual filings
   

Monthly:

• Payroll tax declarations 
• Social security payment
• WHT deductions (if applicable)
   

Non-compliance leads to:

• Penalties 
• Freezing of bank accounts
• Work permit rejections
• Contract payment holds

 🛢️ Oil & Gas:

• Drilling services 
• EPC packages
• Tanks, pipelines, and refinery upgrades
   

⚡ Energy & Power:

• Grid rehabilitation 
• Solar projects
• Gas capture & processing
   

🏗️ Infrastructure:

• Roads & bridges
• Housing
• Logistics corridors
• Ports & airports
   

🏢 Professional Services:

• Tax advisory 
• Compliance
• Engineering & project management
• Supply chain & procurement
   

🌾 Agriculture & Industry:

• Food production 
• Fertilizers
• Construction materials 

 Based in UAE & Iraq, ASHUR provides full support for foreign companies, including:

• Company registration & licensing 
• Branch or LLC setup
• Corporate tax advisory & filing
• Payroll + social security setup
• Oil & gas regulatory support
• Contract advisory
• Local content & compliance consulting
• Trading, procurement & supply chain support
• Chemical supply to operators
   

We ensure your operations in Iraq are legal, compliant, and efficient.