This law grants numerous advantages and guarantees to the investor regardless of nationality, offering all benefits and guarantees. It also grants both Iraqi and foreign investors a range of advantages and guarantees as an incentive from the state to encourage Iraqi and foreign investors. In turn, these advantages will positively influence the economic environment in a manner consistent with adapting it to facilitate the entry of investments into the country, as follows:

 

Investor Advantages and Guarantees:

• The Iraqi or foreign investor may be granted ownership of state or public-sector land allocated for housing projects. Ownership of land designated for housing projects within the basic design (master plan) is transferred at a sale price of 2% of the land’s value, while land allocated for housing projects outside the basic design is transferred free of charge. Furthermore, 10% of the area of the housing project is allocated to the land-owning entity for investment purposes in accordance with specified regulations.
• The Iraqi or foreign investor may purchase private or mixed-sector land strictly for the purpose of establishing housing projects, provided this does not conflict with the uses designated in the basic design.
• The Iraqi investor may be granted ownership of state or public-sector land allocated for industrial projects. Land set aside for industrial projects within the basic design is transferred at a sale price of 15% of the land’s actual value, while land designated for industrial projects outside the basic design is transferred at a sale price of 5% of the land’s actual value.
• The law allows the investor to transfer capital brought into Iraq, along with any returns, out of the country in a convertible currency, pursuant to the instructions of the Central Bank of Iraq, and after settling all obligations and debts owed to the Iraqi government and other relevant entities.
• The foreign investor has the right to trade shares and bonds listed on the Iraq Stock Exchange and to acquire membership in private and mixed joint-stock companies. The presence of real estate among the assets of these companies does not impede this right.
• The investor has the right to insure the investment project with any national or foreign insurance company it deems appropriate.
• The investor has the right to open accounts in Iraqi or foreign currency—or both—with any duly licensed bank inside or outside Iraq for the licensed project.
• Iraqi and foreign investors have the right to rent or lease real estate, or enter into a musataha agreement with the state or with the private and mixed sectors for the purpose of establishing investment projects, for a period not exceeding fifty (50) years, subject to renewal with the approval of the licensing authority and the relevant entity. This is subject to the nature of the project and its economic feasibility, with the exception of industrial projects located in industrial cities, which may be owned through payment according to specific instructions.
• The investor may transfer the ownership of the entire investment project, or part of it, during the license term to another investor, subject to the approval of the licensing authority, provided that the investor has completed 40% of the project. The new investor assumes all rights and obligations under the law and the agreement concluded, according to the regulations for amending investment licenses, which include detailed provisions on transferring investment projects.
• The investor has the right to employ and hire non-Iraqi workers if it is not possible to hire an Iraqi with the necessary qualifications capable of performing the same task, in accordance with regulations issued by the relevant authority.
• The foreign investor and non-Iraqi workers involved in investment projects have the right to reside in Iraq, as well as facilitated entry into and exit from Iraq.
• The investment project may not be confiscated or nationalized except by a final judicial ruling.
• The investment project may not be expropriated, except in the public interest (in whole or in part), and then only with fair compensation.

 

Customs and Tax Exemptions for the Investor

• A project that obtains an investment license from the Commission is exempt from taxes and fees for (10) ten years from the date of commencing commercial operations for each phase of the project’s construction.
• A licensed investment housing project is exempt from subdivision fees and real estate registration fees, including the notarial fees (fees for the transfer of residential units to citizens).
• A project that obtains an investment license is exempt from taxes and customs duties on imported assets intended for the investment project, provided they are brought into Iraq during the construction phases of the project and prior to the commencement of commercial operations for each phase, in accordance with the project’s basic design and the timeline for its implementation.
• Imported assets necessary for expanding, developing, or modernizing the project are also exempt from fees if such expansion results in an increase in the project’s design capacity. These assets must be brought in within (3) three years from the date of notifying the Commission of the expansion or development. For purposes of this Law, “expansion” refers to the addition of fixed capital assets intended to increase the project’s design capacity for goods or services by more than 15%, while “development” entails replacing older machinery with new, advanced ones or performing upgrades to existing equipment—either in whole or part—in order to enhance production efficiency or improve and develop product quality and services.
• Imported spare parts for the project are exempt from fees, provided their total value does not exceed (20%) twenty percent of the purchase value of the assets, and on condition that the investor does not use them for purposes other than those for which they were imported.
• Projects involving hotels, tourist establishments, hospitals, health institutions, rehabilitation centers, and educational or academic institutions are granted additional exemptions from fees for importing furniture, furnishings, and supplies for the purpose of renewal and modernization, once every (4) four years at a minimum. These items must be brought into Iraq or used in the project within (3) three years from the date the Commission issues its decision approving the import lists and quantities, with the stipulation that they are not used for purposes other than those for which they were imported.
• Raw materials imported for operating the project commercially are exempt from taxes and customs duties if used in the manufacture of items for the ration card system, pharmaceuticals, and construction materials (with the exception of raw materials that are available and produced in Iraq), provided they are environmentally friendly.
• Raw materials imported for commercial operations of the project are exempt from taxes and customs duties according to the proportion of locally sourced materials used in producing the final product, in accordance with regulations set by the National Investment Commission in coordination with the relevant sectoral authorities.
• If it becomes apparent that any or all of the exempted project assets have been sold or used in a manner contrary to the provisions of this Law, or used for unauthorized purposes, the investor must pay any due taxes, fees, and fines.
• The National Investment Commission may extend the tax and fee exemption period proportionally to the increase in the Iraqi investor’s percentage of ownership in the project, up to a maximum of (15) fifteen years if the Iraqi investor’s share exceeds (50%).
• The foreign investor may be granted additional benefits under international agreements concluded between Iraq and the investor’s home country, or under multilateral agreements to which Iraq is a party.

 

Investor Obligations

The Investment Law defines the investor’s obligations in Chapter Four, titled “Investor Obligations,” as follows:

• Notify the National Investment Commission or the Regional/Provincial Investment Commission, as applicable, in writing immediately upon the completion of installing and preparing the assets for the project, and indicate the date for the start of commercial operations.
• Maintain proper accounts audited by a legally licensed accountant in Iraq, in accordance with the law.
• Provide an economic and technical feasibility study of the project, along with any information, data, or documents requested by the Commission or other relevant authorities regarding the project and the progress made in its execution.
• Keep specific records of materials imported for the project that are exempt from customs fees in accordance with the law, while clearly stating their depreciation periods.
  Preserve environmental safety and adhere to the quality control system in force in Iraq, as well as internationally approved standards in this field, and comply with laws related to security, health, public order, and the values of Iraqi society.
• Comply with the applicable Iraqi laws concerning salaries, leave, working hours, working conditions, and so forth.
• Ensure that the project’s progress schedule, as submitted by the investor, corresponds to actual progress, with no time discrepancy exceeding six months. The National Investment Commission must set penalty provisions for any delay beyond six months, and may withdraw the license in such cases.
• Train and qualify Iraqi workers, enhancing their efficiency, skills, and abilities, giving priority to employing Iraqi labor.