When you want to establish a business in Iraq. First of all you have to decide. Where the seat of the company will be? and what business nature is? what are the services that you intend to provide through your company? Answers to these questions have a direct impact on the company set up.
If you study to register a corporate in Iraq, you have to know that the Republic of Iraq consists of two regions. They are the central\ Federal Iraq. which it is usually referred to as the Government of Iraq (GOI). And the Kurdistan Region. which it is referred to as Kurdistan Regional Government (KRG). Although it looks like the laws and legislation applied in the GOI are also applicable in the KRG. But actually there are differences in practice and application of those laws and legislations what related to corporate in Iraq.
So if you want to establish your own company in Iraq. And start your own business. You must first decide as we mentioned in the beginning. Where do you intend to establish that corporate in Iraq? In Central Iraq or in the Kurdistan Region? Because establishing a business in Iraq in one territory, will not entitle you do your business in the other. Unless you register and activate the same company in the other territory by following certain legal procedures. And that of course brings more financial and legal burdens upon you.
However, it is good to know that each territory has some significance in nature and business opportunities. For example; if you are thinking of a maritime transport and operations. Then you must go to Basrah. But if you are an oil and gas company. You must think twice whether you want to establish your company in central Iraq or in the Region. As both territories are oil rich. But there are a lot of differences in practice and application of laws and regulations between the two territories. Procedures in the KRG seem to be much easier and smoother than the GOI.
There are two Company Registrar’s offices in the Republic of Iraq. One central Registrar’s office located in Baghdad. Which is applicants from all governorates and cities of the GOI approach to register and\ or update their companies and\ or to branch offices. On the contrary, the KRG has three directorates that are subordinate to the Directorate General of Companies’ Registration. Which it is the umbrella of those three offices located in the main cities of Erbil, capital of the Region, Sulaimaniyah, and Dahuk.
These three offices are arms of the Registrar, and are very helpful to the business. Unlike the GOI, if you want to establish your own company, or a branch office, or you are required to update your company’s or branch office’s status, you go directly to the competent office with you which are registered or want to register. For example, if you want to work in Erbil, you approach Erbil’s Directorate of Companies’ Registration. And if you want to work in Sulaimaniyah or in Dahuk, you go directly to the office located in that city. That office will send copies of your representations and documents to the Registrar. So you do all the paperwork in your city and the competent office takes care the rest. Another important point is that you should consider the registration cost.
The cost for establishing a company or a branch office in the KRG is much lower (almost 30%) than that in the GOI.
Relationship between the company’s seat and business nature:
In the GOI, the type of services and business nature of the company determine its seat. For example, if the company’s business nature is contracting and wants to operate in an area that’s under the control of the GOI. Then that the company must be established and\ or registered in Baghdad.
But if your business in Iraq usually does business with Turkey or European countries for example. Then it is better to register it with the KRG. Because of the short distance between the Region and Turkey and then to Europe. Of course there are reasons that one must take into account in addition to what has been mentioned. Such as such as Visa and Residence requirements, time and cost. Answers to all those questions give you a crystal clear idea of who to start your business and enable you to make the right decision and manage any potential risks.
To get more information or register a company in Iraq Contact KY law firm.