Overview
The State Companies Law (also called the Public Companies Law) is the legal framework for Iraq’s state-owned enterprises. Its private-sector counterpart is Companies Law No. 21 of 1997. Before 2003, these two laws together regulated the public and private sectors.
The law was issued in August 1997 based on a decision of the Iraqi National Council. Its purpose is to organize public companies, covering how they are established, managed, and liquidated, under unified financial and administrative rules aimed at raising the performance of the national economy.
Key Features
Legal and financial independence. A state company is a separate legal entity with financial and administrative independence that operates on economic principles. It is registered with the Companies Registrar at the Ministry of Commerce.
Link to a ministry. Each state company is tied to a sponsoring ministry. Under the amended law, the ministry is not a shareholder. The company is owned by the state, and the ministry oversees its operations.
Partnerships with foreign and private companies. Article 15 is the law’s most important economic provision. Paragraph 3 allows a state company to partner with foreign companies to carry out work within its field of activity inside Iraq. This is the legal basis for many contracts to rehabilitate and operate factories and plants with private and foreign investors.
Transformation. The law also allows state companies to be converted into private or public shareholding companies.
Amendments
After 2003, the Coalition Provisional Authority amended the law through Order No. 76, which allowed wholly state-owned companies to be merged into ministries, or two or more companies with similar or integrated activities to be merged into one. The Iraqi parliament later passed several further amendments, including the fifth amendment, Law No. 28 of 2015.
Current Relevance
The law is still used to create new state companies by decision of the Council of Ministers. It sits at the centre of debates about Iraq’s large and often loss-making public sector, and about whether to reform, restructure, or privatize state-owned enterprises.