Joint Ventures Under Iraqi Law
Joint ventures (JVs) are a common market entry structure in Iraq used to combine local capabilities with foreign technical, financial, or operational expertise. JV arrangements are governed by Iraqi Companies Law No. 21 of 1997 (as amended) and may be formed as either an incorporated company or a contractual collaboration depending on the project and regulatory requirements.
Types of JV Models
- Incorporated Joint Ventures (Equity JV): Under Iraqi corporate law, foreign and Iraqi partners may establish a jointly owned company, typically in the form of:
- Limited Liability Company (LLC), or
- Joint Stock Company (JSC) (used for large or strategic projects)
Key characteristics:
- Equity ownership is defined in the Articles of Association
- Shareholders enjoy voting rights, dividend entitlements, and exit rights
- Entity registers with:
- Registrar of Companies
- Tax Authority
- Social Security
- Sector regulators (if required)
- Fully operational legal personality with contracting capacity
Equity JVs are common in long-term oilfield services, industrial operations, construction, and public-private project models.
- Contractual Joint Ventures (Unincorporated JV): Contractual JVs are legally recognized cooperation agreements where parties collaborate without forming a separate company. Under Iraqi practice, these agreements:
- Allocate roles, revenue shares, and liabilities
- Do not create a separate legal entity
- Are often used for bidding or executing specific tenders
Contractual JVs are widely used in:
- EPC and construction tenders
- Oil & gas service contracts
- Project-specific partnerships
- Government procurement participation
- Foreign Partner Participation: Foreign companies may participate in Iraqi JVs through:
- Equity contribution to an Iraqi company
- Branch registration for direct contracting
- Technical cooperation agreements
- Consortium bidding structures
Foreign ownership is permitted except in sectors with special regulatory restrictions.
Legal and Regulatory Considerations
- Companies Law No. 21/1997 (as amended)
- Tax Law No. 113/1982 (as amended)
- Social Security Law
- Sector-specific licensing rules (e.g., oil & gas, telecom, banking, insurance)
Depending on the sector, JV approval may also be required from:
- Ministry of Oil (oilfield services & EPC)
- Communications & Media Commission (telecom licensing)
- Central Bank of Iraq (banking/fintech)
- Insurance Diwan (insurance sector)
- Ministry of Trade (commercial agency overlap)
Governance & Shareholder Arrangements
Iraqi JV partners typically negotiate:
- Board representation
- Voting thresholds
- Reserved matters
- Dividend policies
- Technical support and IP arrangements
- Local content commitments
- Exit and share transfer mechanisms
Such provisions may be recorded in a Shareholders’ Agreement in addition to the Articles.
JVs are frequently adopted in:
- Oil & gas field services and EPC contracts
- Infrastructure and construction projects
- Manufacturing and industrial operations
- Telecommunications and IT services
- Public procurement and PPP arrangements
How Etihad Can Assist
Etihad provides legal and regulatory advisory services to banks, financial institutions, and businesses, supporting compliance with applicable laws, regulations, and regulatory guidance issued by any competent authorities.