Requirements to register a company in Iraq

Requirements to register a company in Iraq differ according to the company’s business nature and its intended seat. The Republic of Iraq consists of two regions. They are the central\ Federal Iraq which is usually referred to as the Government of Iraq (GOI) and the Kurdistan Region which is referred to as Kurdistan Regional Government (KRG).

Although it looks like the laws and legislation are apply in the GOI are also applicable in the KRG. But actually there are differences in practice and application of those laws and legislation. So if you want to establish your own company or start your own business, you must first decide as we mentioned in the beginning, where do you intend to establish that company, in Central Iraq or in the Kurdistan Region. Because establishing a company 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.

In this blog, however, we are talking about registering a domestic company in Central Iraq. Although there are differences in practice and application between that and the KRG.

Requirements to Register a Business in Iraq:

1. Business name.
2. Original Articles of Incorporation\ Memorandum of Association and Shareholders’ Agreement.
3. Shareholders’ IDs, passports, residency, etc.
4. POAs from shareholders to the local counsel who will carry the registration process.
5. Physical office and original lease.
6. Nominee Managing Director’s IDs, passports, residency, etc.
7. Bank statement confirming the deposit of minimum capital.
8. Nominee statutory lawyer’  agreement.
9. Candidate statutory accountant’s agreement,
10.  Nominee statutory engineer’s agreement (only for construction companies)
11. Sectoral entity’s consent letter (only in special cases and for special companies), and
12. Competent security authority’s consent (only for expat shareholders or Managing Director).

Details of Requirements to Register a Company in Iraq

Business name

The Iraqi law provides that a business\ trade name must be Arabic. But cannot be in any foreign language. Due to such name is not a property of a business entity that’s established and registered abroad. This provision doesn’t apply to the KRG where even a foreign name owned by a local national, entity or company is accepted.

Original Articles of Incorporation\ Memorandum of Association and Shareholders’ Agreement

Shareholders must have a written agreement showing the company’s name, capital, business nature, and shareholders’ names, nationalities and every shareholder’s percentage to the capital. The Articles of Incorporation\ Memorandum of Association of an LLC is its governing document and should set out the following: Name and form of the company, and its purpose; Main office address in Iraq; Name and nationality of the shareholders, and Shared capital.

POAs from shareholders to the local counsel who will carry the registration process,

First of all and before the application filled, and as an requirement of register a company, each and every shareholder must authorize the legal counsel who shall take care of the registration process by a legal POA. The POA could be via a local notary or an Iraqi embassy or consulate at which the shareholder resides.

Physical office and original lease,

Excising a physical office requirements to register a company in Iraq. Every company must have a physical office that shall be its registered seat or main office. The applicant/shareholders have to present privately owned or leased property office. The Inspection department at the Registrar’s office shall begin a due diligence process and verify the existence of the office and the accuracy of address.

Bank statement confirming the deposit of minimum capital,

The minimum capital of an LLC is IQD1,000,000. Capital is one of requirements to register a company in Iraq. The Iraqi Company Law prohibits the issue of shares with a higher or lower value. Shareholders must pay the shared capital. Further the amount deposit into an account with a bank authorized to operate in Iraq. Also shall remain in deposit until registration procedures will be finished. And documents showing that the establishment formalities have been completed are presented to the bank with which the capital is deposited. Contributions in kind are also permissible. But must be recorded in the memorandum of association. Certainly the shareholders must approve the value.

Statuary lawyer, accountant, and\ or engineer

Every company must have a statutory legal advisor and an accountant. In the same vein for construction companies, If the company’s business is construction or engineering the applicant has to present a statutory engineer.

Sectoral entity’s consent letter (only in special cases and for special companies)

Some companies’ business nature require approval of competent sectoral authority or authorities. Consequently if a company’s business is transportation. As a result the shareholders should get permit from the Ministry of Transportation. Telecommunications company needs approval of the Ministry of Telecommunications. Private security companies need approval of the Ministry of Interior and Security police, and so on.

 Competent security authority’s consent (only for expat shareholders or Managing Director):

If the managing director of a company is a foreign national therefore he\ she must obtain the security police’s consent and approval to work in Iraq. Likewise to the shareholders.But it can be easier if the managing director is a local national.

To get more information or register a company Contact KY law firm.