Executive departures in Iraq raise risks that go well beyond ordinary employee exits. A general manager, branch manager or finance director often holds registered corporate authority, bank signing rights, powers of attorney, relationships with authorities and clients, and access to sensitive information. If the departure is not managed carefully, the business may be unable to sign documents, access bank accounts or respond to authorities, while the departing executive retains powers that could be misused. In contentious departures, these risks are heightened.
Planning executive departures with attention to continuity, authority and information protects the business during a vulnerable period.
The Labour Law No. 37 of 2015 governs the termination of executive employment, including notice and end-of-service entitlements. The Companies Law No. 21 of 1997, as amended, governs the appointment and removal of managers and the registration of changes with the companies registry. The Iraqi Civil Code No. 40 of 1951 governs agency and powers of attorney. The Residency Law No. 76 of 2017 governs foreign executives’ residence. Banking requirements govern changes to signatories.
Mapping the executive’s roles in executive departures in Iraq
Before the departure, the business should identify everything the executive holds:
- Registered position as manager or director.
- Bank signing authority and online banking credentials.
- Powers of attorney granted to the executive.
- Authority registered with tax, social security and other authorities.
- Licences or registrations held personally on behalf of the business.
- Relationships with key clients, ministries and partners.
- Access to systems, documents and confidential information.
- Company property, such as vehicles, phones and laptops.
Appointing a successor or interim manager
Continuity requires someone with authority to act. The business should appoint a successor or interim manager through the required corporate process and register the change promptly. Registration may take time, so the business should plan for the interval, for example by ensuring that another authorised signatory is in place. Corporate advice in Iraq can assist with appointments and registry filings.
Revoking authority
Bank mandates should be updated to remove the executive and add the successor. Powers of attorney should be revoked formally, with notice to persons who may rely on them. Authorities and key counterparties should be informed of the change. Until revocation is registered and communicated, third parties may continue to rely on the executive’s apparent authority.
Protecting information
Access to systems should be revoked on departure. Company documents and devices should be returned. Confidentiality obligations in the contract should be reiterated. Where there is a risk of misuse, the business should consider monitoring and, if necessary, legal action.
Employment terms and settlement
The executive’s contract will govern notice, entitlements and any restrictive covenants. Many executive departures are negotiated, with a settlement agreement covering payments, cooperation during handover, return of property and release of claims. Employment law advice in Iraq can draft settlement terms.
Foreign executives
For foreign executives, work and residence permits must be cancelled or transferred. Final payroll tax should be settled before departure, and the executive’s cooperation may be needed for exit procedures.
Handover
A structured handover covering ongoing matters, contacts, documents and pending deadlines reduces disruption. The settlement agreement can make part of the payment conditional on completing handover.
Common mistakes
- Removing the executive before appointing and registering a successor.
- Leaving bank mandates and powers of attorney unchanged.
- Delaying system access revocation.
- Failing to notify authorities and counterparties.
- No structured handover.
- Overlooking permit cancellation and final tax for foreign executives.
Practical checklist
- Map all authorities, access and relationships held by the executive.
- Appoint and register a successor or interim manager.
- Update bank mandates and revoke powers of attorney.
- Notify authorities and key counterparties.
- Revoke system access and recover property.
- Negotiate settlement and handover terms.
- Complete immigration and payroll tax steps for foreign executives.
Bank mandates and signatories
Executives often hold bank signing authority, sometimes in several banks and for several entities. On departure, the company should notify each bank in writing, provide board resolutions appointing new signatories and confirm that the departing executive’s authority has been removed. Until the bank processes the change, the company should monitor accounts closely. Delays in updating bank mandates are a frequent source of risk, particularly where relations with the departing executive are difficult.
Government and regulatory records
Executives may be registered as company managers with the companies registry, as authorised representatives with ministries, or as contact persons with regulators. Each record should be updated. Where the executive is the registered manager, a new manager should be appointed through the required corporate procedure and the registry updated, because third parties may continue to rely on the registered details.
Communication with clients and partners
Clients, government counterparties and partners who dealt with the departing executive should be informed of the change and introduced to the new contact. A short, factual communication protects relationships and reduces the risk that third parties continue to deal with the former executive.
Non-compete and non-solicitation enforcement
Where the executive is subject to restrictive covenants, the company should remind them of their obligations in the exit letter and monitor compliance. Enforcement of restrictive covenants in Iraq can be uncertain, so the company should focus on practical protections such as confidentiality, return of information and client relationship management.
Illustrative example. A foreign company removes its Iraqi general manager after a dispute. The manager remains the registered manager and sole bank signatory for several weeks while the successor’s appointment is registered. During that time, the manager signs a lease extension and withdraws funds. The company subsequently adopts a protocol requiring a second registered signatory at all times and planning registry changes before any executive departure.
Key takeaways
- Executive departures in Iraq require planning for corporate authority, banking, information and continuity.
- Successors should be appointed and registered before or immediately upon departure.
- Powers of attorney and bank mandates must be formally revoked and communicated.
- Settlement agreements can secure handover and cooperation.
How Etihad Law Firm Can Help?
Careful planning of executive departures in Iraq protects the business from loss of control, information leaks and operational disruption.
Etihad Law Firm advises employers on executive exits, corporate authority changes, settlement agreements and related immigration steps in Iraq.