Privileges and Guarantees Offered to Investors:

1. Taking out the capital brought into Iraq with its revenues in hard currency

2. Dealing with the Iraqi securities market

3. Leasing land needed for the project or using it on condition that the term does not exceed a period of 50 years that can be renewed

4. Insuring the investment project at any national or foreign insurance company

5. Opening accounts in Iraqi or foreign currency or both at Iraqi banks or at banks outside Iraq

6. Obtaining residency and facilitating investors entry to Iraq and leaving Iraq

7. Non-confiscation or nationalization of the investment project

8. Non-Iraqi workers have the right to transfer their salaries and indemnities outside Iraq

9. Exemption from fees and taxes for ten years beginning with the date of starting the project. This period is renewable. Also, furniture and assets needed for expanding and modernizing the project are exempt.

Investors Commitments:

1. Informing the commission of the date of starting work on the project

2. Maintaining accurate book-keeping checked by an authorized lawyer

3. Presenting economic and technical feasibility studies with all the maps related to the project

4. Keeping a record of imported materials, protecting the environment, and commitment to qualitative control systems

5. Complying with Iraqi laws and the action plan methodology presented by investors

Areas of investment:

The law opened all areas of investment before Iraqi and foreign investors except:

1. Investment in the field of extracting and producing oil and gas

2. Investment in the sectors of banks and insurance companies

3. Land cannot be owned except for housing projects. It can be owned by Iraqis as separate units; otherwise, it is given for a period of fifty years, which is renewable.

Investment Commissions in Iraq:

The law stipulates the formation of two commissions in Iraq:

1. The National Commission for Investment: It is a legal entity managed by a board comprised of nine members who have had a minimum of ten years of experience and specialization and who hold university degrees. The commission will be responsible for the formulation of the national policy for investment, the development of plans and controls, and monitors the application of controls. It exclusively specializes in federal investment projects. The government nominates its head on the level of a minister and a deputy head on the level of an undersecretary. Both will be approved by the parliament for a period of five years. The board also has four members on the level of general managers and three representatives from the private sector chosen by the prime minister.

2. Commissions in regions and governorates. Since the federal structure in Iraq has been approved through the law on the formation of regions, which then will enjoy legislative, executive, and judicial powers, the investment law has provided for the establishment of commissions in federal regions. Governorates which are not organized as regions enjoy financial and administrative powers, and thus the law has regulated the right of formation of investment commissions in governorates as well.

The commissions in regions and governorates have powers to grant investment licenses, encourage investment, and open branches in areas under their jurisdiction in consultation with the national commission and in accordance with this law.

Each of those commissions is comprised of seven members who have a minimum of seven years of experience and specialization. The regions’ commissions are coupled to the prime ministers of the regions, and the governorate commissions are linked to the governors and monitored by the respective governorate council. The law authorizes regions and governorates to form these commissions, which draw up investment plans in such a way that does not contradict the federal investment plans.

The law allows governorates and regions to exercise their role in encouraging investment as the national commission will be limited to the role of federal investments only and thus not take over the role for investment in the regions and governorates.

The national commission has a special budget. It has to deal with license applications within 45 days. It also has to facilitate granting licenses and use electronic correspondence.

Evaluation:

The new investment law will surely make a big qualitative change in the Iraqi economy by means of incoming capital and foreign experience, which will contribute to establishing the basic infrastructure of the Iraqi economy. Iraq suffers from lack of capital available for reconstruction and development due to the accumulation of loans as well as lack of experience due to ongoing wars. This law will immensely help in meeting this need.

The Iraqi federal budget is derived to 93-95% from the proceeds of crude oil. These proceeds are spent on the subsidies for the ration cards, low fuel prices, the social welfare system, as well as the salaries and wages of workers in the Iraqi state. The remainder is not enough to realistically rebuild in Iraq an infrastructure that needs hundreds of billions, which are not readily available according to the reality of the Iraqi state that owes more than 130 billion dollars to the rest of the world, and on the other hand we cannot boost the state through the small projects that cannot achieve sustainable development. And thus, like many countries in the world, it must resort to investment.

The Iraqi economic infrastructure has been destroyed over more than 25 years since the beginning of the Iraq-Iran War in 1980. With the increase of its population Iraq may become an economic machine that will not stop for fifty years in the areas of services, housing, economy, agriculture, and commerce. This law will enable this progress by means of establishing a secure environment for investment.

That the investment law establishes the basic rules for the investor with guarantees and protection is a very good step in the field of investment, although the land problem remained unresolved or at least not in the way that we want it to be where the investor could own property except for the housing projects which are to be owned by Iraqis. In our opinion this is a tautology as every Iraqi has under the constitutional right to own property, reside and travel in any region of Iraq.

More than nine governorates, in addition to Iraqi Kurdistan, have a secure environment for investment. The growth and development of these governorates will create an incentive for governorates which lack security to seek to create a secure environment. Surely the economy, through investment, will contribute to achieving security in the country. (Source)Niqash