Foreign Company Registration in Iraq: Key Legal Changes & Practical Insights

Foreign companies entering the Iraqi market are increasingly facing a regulatory framework that balances strict legal compliance with selective flexibility. Over the past few years, Iraq has introduced a series of legislative changes governing the registration of foreign entities, particularly in the context of government contracts and supply agreements.

A major shift began with Regulation No. (2) of 2017 on Foreign Company Branches, which established a clear rule: foreign companies may not conduct commercial activities in Iraq without registering a local branch. This marked a strong move toward formal regulation and oversight of foreign business presence.

However, the practical application of this rule has not been entirely rigid. Later in 2017, the Companies Registration Department clarified that companies engaged solely in supply contracts—where no physical presence in Iraq is required—may be exempt from registering a branch. This interpretation introduced an important distinction between on-the-ground operations and cross-border supply activities.

In 2023, the regulatory environment tightened again. Regulation No. (4) of 2023 required foreign companies awarded public tenders to complete branch registration within 15 days of award notification, failing which they risked being considered non-compliant. This step reflected a clear governmental intent to strengthen control over foreign participation in public procurement.

Yet, this stricter approach was short-lived. In December 2023, a new directive from the Council of Ministers reinstated the exemption for companies engaged exclusively in supply contracts that do not require local execution or presence.

The position was further clarified in 2025 through Regulation No. (1) of 2025, which introduced an important refinement: foreign companies supplying goods and services are exempt from branch registration unless the contract involves service delivery inside Iraq for a period exceeding one year.

Practical Implications for Foreign Businesses

These developments highlight a recurring pattern in Iraq’s regulatory policy—one that seeks to maintain oversight while avoiding unnecessary barriers to international trade.

For foreign companies, the key consideration is the nature of the contract:

• Does it require physical presence in Iraq?
• Does it involve service delivery over an extended period?
• Is it linked to a government tender?

Answering these questions is critical in determining whether branch registration is required.

For a more detailed breakdown of procedures and compliance requirements, businesses may refer to this practical guide on foreign company registration in Iraq.

Conclusion

Iraq’s approach to foreign company registration continues to evolve, reflecting both regulatory caution and economic pragmatism. While the legal framework is becoming more defined, companies must remain attentive to ongoing changes and ensure proper legal structuring before entering the market.

Understanding these nuances is essential not only for compliance, but also for mitigating legal and operational risks in Iraq’s complex business environment.

About the Author

Furat Kuba is a corporate and commercial lawyer with over 20 years of experience advising on government contracts, cross-border transactions, and regulatory matters in Iraq. He is a Managing Partner at Al-Nesoor Law Firm, where he works with international investors, contractors, and institutions on complex legal and commercial matters.

Learn more: https://alnesoor.com