Foreign investment in Iraqi transport and logistics is shaped by two intersecting frameworks. The first is the federal Companies Law, which since the 2019 amendments imposes the 51% Iraqi-shareholding requirement. The second is the Investment Law No. 13 of 2006, which offers qualifying projects a separate licensing route administered by the National Investment Commission and provides protections, incentives, and in many cases broader foreign ownership rights than the Companies Law alone permits. Foreign logistics investors should understand both regimes and how they interact at the project structuring stage.
The Investment Law route is applied through the National Investment Commission (NIC) at federal level, or through the Provincial Investment Commission (PIC) of the relevant governorate where the project’s scale and characteristics make provincial licensing appropriate. The Investment Licence is the operative document conferring the rights and incentives below.
Eligible Logistics Activities
Most substantive logistics activities are eligible for Investment Law structuring:
- Warehousing and distribution centres of meaningful scale
- Freight forwarding and integrated logistics operations
- Transport fleet operations including trucking and specialised vehicles
- Cold chain logistics and specialised storage
- Project logistics for infrastructure and industrial projects
- Logistics infrastructure development including ports, terminals, and similar facilities
- Integrated supply chain operations
Strategic or sensitive sub-sectors may engage additional requirements addressed in our sectoral practice.
Foreign Ownership under the Investment Licence
The Investment Law route is one of the principal mechanisms by which foreign logistics investors may participate in Iraqi operations on terms broader than the 49% Companies Law cap. Investment Licence holders may, depending on the sector and project characteristics, hold majority or full foreign ownership of the project entity. This makes Investment Law structuring particularly attractive for foreign investors whose commercial model requires control over the Iraqi operation, provided that the project scale and profile justify the licensing engagement.
Investor Rights and Incentives
Licensed investors enjoy substantial Investment Law protections, including equal treatment with Iraqi investors for most purposes, repatriation of capital, profits, and dividends in convertible currency, protection against expropriation save for public interest with fair compensation, the right to employ foreign managers and technical personnel within defined limits, and access to international arbitration for disputes with the State. These protections apply specifically to projects holding an Investment Licence.
The incentive package for qualifying logistics projects can include:
- Corporate income tax exemption for defined periods
- Customs duty exemption on equipment and vehicles imported for the project
- Exemption from certain other taxes and fees
- Enhanced incentives for projects in less-developed provinces
- Land allocation on preferential terms where State land is involved
The cumulative package is commercially significant for capital-intensive logistics infrastructure.
Application Process
Application to NIC or PIC for an Investment Licence requires comprehensive documentation, typically including investor identification documents, a project feasibility study, the proposed capital structure and financing arrangement, a site plan and land rights confirmation, environmental considerations, an employment plan, and an implementation timetable. Review engages multiple authorities, including transport authorities for sector-specific aspects. Realistic timelines run to several months from complete submission, and throughput is heavily affected by document completeness.
Kurdistan Region Framework
The Kurdistan Region operates a parallel Investment Law No. 4 of 2006 administered by the Kurdistan Board of Investment. Logistics projects in the Region engage the regional framework, which offers comparable or in some respects more favourable terms. Investors choosing between federal Iraq and the Kurdistan Region for logistics operations should evaluate both frameworks against the project’s operational, customer-base, and connectivity needs.
Ongoing Compliance
Holding an Investment Licence engages continuing obligations, including operation within the licensed scope, implementation of the investment plan, satisfaction of employment and other commitments, ongoing reporting to NIC or PIC, and cooperation with oversight visits. Material breach of these obligations can trigger licence review and potential withdrawal of incentives.
How We Can Help
Etihad Law Firm advises on logistics sector foreign investment, including Investment Law structuring and route selection, application preparation, NIC and PIC engagement, sectoral coordination on transport-specific matters, and ongoing compliance support through the project lifecycle.