Anti-Trafficking Policy for All Labor Recruitment Companies
Anti-Trafficking Policy for All Labor Recruitment Companies The Registrar of Companies has announced, as part of Iraq’s 2026 Annual Anti-Human Trafficking Plan, that all licensed manpower and labor recruitment companies must file a formal corporate social responsibility statement containing explicit anti-trafficking commitments. All recruitment companies must submit an annual anti-trafficking policy to the Companies Registry. Failure to comply risks suspension of the recruitment license. WHAT COMPANIES MUST DO Policies must address worker rights guarantees, supply chain monitoring, and non-involvement in exploitative practices. Submissions are mandatory and must be renewed annually with the Directorate. The requirement follows the Directorate’s circular dated 9 April 2025. Non-compliant companies face license suspension.
Iraq Mandates Certified Accountants for All Private Companies
Iraq Mandates Certified Accountants for All Private Companies The Registrar of Companies in Iraq has announced new mandatory requirements compelling all limited and private companies to appoint a certified accountant registered with the Association of Accountants and Auditors, effective for fiscal year 2026. KEY IMPACT Companies must appoint a certified accountant to prepare annual financial statements. Accounts prepared by unregistered accountants will be rejected by the Companies Registry Directorate. WHAT COMPANIES MUST DO Accountant appointment must be linked to the company’s founding document or an official appointment minutes. Any change of accountant requires prior approval from the Association of Accountants and Auditors. The appointment must align with Retirement and Social Security Law No. 18 of 2023. Non-compliant accounts will not be processed by the registry. HOW ETIHAD LAW FIRM ASSISTS Etihad Law Firm guides businesses through the accountant appointment process, drafts compliant appointment minutes, and liaises with the Association of Accountants and Auditors on behalf of clients.
New Anti-Corruption Measure for Company Transactions
New Anti-Corruption Measure for Company Transactions The Iraqi Ministry of Trade’s Companies Registration Department today announced a significant new integrity measure aimed at increasing transparency and combating corruption. Effective 15 Mar 2026, all companies and their legal representatives must submit a formal pledge confirming the authenticity and accuracy of all invoices related to their transactions. This new directive requires that any transaction submitted for registration must include a declaration from the applicant, confirming that the associated invoices are correct, fully paid, and contain information that matches the company’s official records, including the name of the authorized director, shareholders, and headquarters. Under this new policy, the authorized director will be held legally responsible for the validity of all submitted information. The Companies Registration Department will conduct service-level checks to verify the authenticity of the information provided in the invoices. Any discrepancies or false information discovered will result in legal accountability for the company and its representatives. Impact on Iraq’s Business Environment This initiative is a critical step in the Ministry’s ongoing efforts to enhance the integrity of the business environment in Iraq. By holding company leadership directly accountable, the Ministry aims to create a more transparent and trustworthy market.
Change in Security Check Period
Change in Security Check Period The Iraqi Companies Registration Department announced a significant update to the mandatory security audit period for all companies operating in Iraq. This change follows a directive from the Office of the Prime Minister. Effective immediately, the period for security audits for all companies will be thirty (30) days. Impact on Businesses: This new measure is designed to streamline administrative processes and facilitate a more efficient business environment while upholding necessary security protocols. The shortened timeframe is expected to expedite company registration and operational approvals, allowing businesses to become fully compliant and operational more quickly. This change aims to reduce the delays and encourage investment by making the process more predictable and timely. How We 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. All companies registered in Iraq are instructed to take note of this official change and ensure their compliance with the updated 30-day security audit period.
Bankruptcy Procedures in Iraq
Bankruptcy in Iraq Bankruptcy is a court-supervised legal process initiated when a company or individual is no longer able to meet financial obligations. Under Iraqi law, bankruptcy leads to the liquidation of assets and structured distribution to creditors based on statutory priority. Bankruptcy is typically pursued when restructuring, settlement, or negotiated workouts are no longer viable. Mechanisms Court declaration of bankruptcy Appointment of trustee or liquidator Asset inventory and valuation Liquidation and sale of assets Verification and ranking of creditor claims Priority distribution to secured and unsecured creditors Closure and dissolution of the entity Reasons Persistent inability to pay debts as they fall due Accumulated liabilities exceeding asset value Final cessation of business operations Creditor petitions demanding liquidation Failed restructuring, settlements, or renegotiations Impact on Creditors and Stakeholders Bankruptcy procedures protect creditor interests by ensuring transparent liquidation, equitable distribution, and compliance with statutory priority rules. Secured creditors benefit from collateral rights, while unsecured creditors receive distributions according to available proceeds. 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.
Free Zone Iraq
Free Zone & Investment Vehicle Establishment Iraq’s Free Zones offer foreign and domestic investors a favorable business environment with customs, tax, and regulatory incentives to support trade, industrial activities, and service operations. Companies established in Free Zones may operate with increased flexibility in import/export activities, and can serve both regional and international markets. Legal Framework Free Zones in Iraq are regulated by the Free Zones Law No. 3 of 1998 and its implementing regulations, under the supervision of the General Commission for Free Zones. The law permits full foreign ownership, profit repatriation, and simplified procedures for licensing and project registration. Permitted Activities Trade and commercial activities Import and export operations Warehousing and logistics Industrial and manufacturing projects Maintenance and repair operations Service and consulting activities Establishment Requirements Submit an application for project approval Provide business plan or activity description Register the company or branch entity Obtain zone-specific operating license Open local bank account (when required) Comply with security and customs regulations Customs & Trade Treatment Goods entering the Free Zone are not subject to customs duties unless released into Iraq’s local market, in which case standard customs tariffs apply. Goods exported outside Iraq may leave without customs duties. Investor Considerations Type of activity (industrial, commercial, service) Licensing requirements Customs interaction for dual-market operations Payroll and staffing needs (local vs foreign) Zone infrastructure and logistics capabilities 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.
Establishing Companies – Oil & Gas
Establishing Companies for Oil & Gas The establishment of companies operating in the oil and gas sector in Iraq is governed by the Iraqi Companies Law No. 21 of 1997 (as amended) and subject to additional sector-specific regulations issued by the Ministry of Oil and its affiliated national oil companies. Oil and gas activities are treated as strategic activities and therefore require special approvals, technical qualifications, and compliance with Iraqi licensing procedures. Legal Basis & Regulatory Authorities Company Establishment (Corporate Law) Foreign companies may register a branch or incorporate an LLC Local companies may operate as LLC or JSC Registration occurs with the Registrar of Companies Social Security and Tax Authority registrations are mandatory post-establishment Sector Licensing & Approvals (Oil & Gas Law & Ministry Regulations) Ministry of Oil Basra Oil Company (BOC) North Oil Company (NOC) Oil Projects Company (SCOP) Iraqi Drilling Company (IDC) Companies performing technical or operational activities must obtain approval to perform work with these national oil companies (NOCs) and may need to be listed in their Approved Vendor Lists. Sector-Specific Regulatory Requirements ✔ Licensing & Qualification Technical capability and experience evidence HSE certifications (ISO, IADC, OSHA when applicable) Iraqi staff employment commitments Space & logistical capability in Iraq ✔ Commercial Registration Obligations General Commission for Taxes General Social Security Department Chamber of Commerce Ministry of Oil (for technical approvals) when applicable ✔ Local Content Requirements Companies must employ Iraqi nationals in certain roles Training & capability programs may be requested Certain subcontracting may require Iraqi participation Common Activities Authorized Under Iraqi Regulation EPC contracting Well drilling & services Oilfield services & maintenance Field logistics & chemical supply Engineering & technical consultancy HSE & training services 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.
Ongoing Corporate Compliance
Ongoing Corporate Compliance & Reporting Requirements Companies in Iraq must maintain ongoing compliance with reporting, tax, employment, and corporate governance requirements. Proper compliance reduces legal and financial risk, supports credibility, and ensures readiness for audits or inspections. Compliance Areas Annual shareholders’ and board meetings Financial statements and audit reports Tax filings and declarations Social security and payroll reporting Contractual and sector-specific reporting Renewal of licenses or registrations Benefits of Compliance Management Avoids penalties and operational disruption Supports business continuity and tender eligibility Enhances investor and customer confidence Facilitates market expansion and financing 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.
Capital Increases of Corproates
Capital Increases Under Iraqi Companies Law No. 21 of 1997 (as amended), companies may increase their capital to onboard new investors, strengthen financial capacity, expand operations, or meet regulatory or contractual requirements. Capital increases require corporate approvals, amendments to registration documents, and filings with the Iraqi Registrar of Companies. Legal Procedures Shareholder Resolution approving the capital increase Amendment of the Articles of Association to reflect the new capital value and share allocation Subscription and Payment of the new capital by existing shareholders or new investors Submission to the Registrar of Companies for approval and registration Issuance of Updated Corporate Documents showing the amended capital Publication Notice for transparency and third-party notification Tax and Social Security Updates reflecting the amended capital for compliance purposes Strategic Reasons Funding expansion or new projects Satisfying regulatory capital adequacy requirements Onboarding strategic investors or joint venture partners Restoring capital adequacy after losses Preparing for mergers, listing, or restructuring events 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.
Commercial Agency in Iraq
Commercial Agency The commercial agency regime in Iraq originally operated under Commercial Agency Law No. 51 of 2000. In 2017, Iraq issued Law No. 79 of 2017, which introduced significant amendments to modernize commercial representation, address market competition, and regulate foreign principals engaging in the Iraqi market through agents or distributors. Changes Introduced by Law No. 79 of 2017 Registration Requirement Reinforced: The amendment strengthened the mandatory registration of commercial agencies with the Ministry of Trade’s Commercial Agency Register. Unregistered agencies may face restrictions related to: Customs clearance Importation rights Enforceability of commercial claims Recognition of Wider Agency Forms: The amendment expanded the scope to cover: Exclusive and non-exclusive representation Distribution and dealership models Commission agencyThis aligned the law with modern commercial distribution practices. Foreign Principal Compliance: Foreign manufacturers or suppliers appointing Iraqi agents must now provide: Authorization letters Contract documentation Corporate evidenceLegalization/attestation procedures were reinforced to ensure authenticity. Contractual Clarity & Termination Rights: The amendment introduced stronger requirements for: Written agency agreements Termination procedures Compensation or settlement mechanisms where applicable Termination without legitimate cause may expose principals to claims depending on contract structure. Consumer & Warranty Obligations: Law No. 79 clarified the agent’s responsibility for: After-sales service Warranty support Spare parts and technical servicing (where applicable) These obligations are especially relevant for high-risk sectors (automotive, industrial, medical, oilfield equipment). Competition and Market Protection: The amendment aimed to prevent: Market dominance through exclusive dealings without justification Parallel import conflicts Abuse of exclusive distribution systems Regulatory authorities may intervene where competition concerns arise. Record-Keeping and Disclosure: Agents are now required to maintain updated commercial records to facilitate: Taxation Customs audits Consumer protection investigations Practical Implications for Foreign Companies Foreign suppliers entering Iraq should: Ensure agency contracts are legally compliant Legalize documentation for registration Address termination compensation clauses contractually Clarify exclusivity, pricing, and warranty responsibilities Failure to properly register may result in: Disputes with customs Enforcement limitations Unofficial distribution channels (parallel imports) Regulatory scrutiny 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.