A Turkish business may register an operation in Erbil, sign a project in Baghdad and move employees between the two locations. Legal difficulties arise when the contracts describe one establishment while tax, employment and corporate records describe another. The relevant question is whether each activity is supported by the correct legal and administrative position.
Federal Iraq and the Kurdistan Region have distinct registration authorities and administrative procedures. The federal foreign branch framework and the regional registration process should be assessed against the business’s actual structure. An approval issued by one authority should not be assumed to complete every requirement elsewhere.
Identify the entity behind each operation
Begin with the Turkish parent, any Iraqi subsidiary and each registered branch. A branch is an establishment of the foreign company, whereas an Iraqi subsidiary has its own legal personality. That distinction affects who contracts, owns assets, employs staff and bears liabilities.
Compare the company name and registration details on customer agreements, bank accounts and invoices. Describing a branch as a separate subsidiary can create confusion over payment and responsibility. Likewise, the group’s trading name may not identify the legal person entitled to sue for a debt.
The legal review should establish a single, accurate entity description for each contract and filing.
Check authority and permitted operations
Branch registration, manager appointment and signing authority answer different questions. A registration certificate confirms a recorded establishment; the manager’s powers determine which commitments that individual can make on the parent’s behalf.
Review whether the parent authorised the proposed location, business activity and representative. Changes to the manager or scope of authority should be reflected in the relevant corporate records and communicated to counterparties where necessary.
Activity-specific approvals remain relevant. A corporate registration does not itself settle requirements for regulated services, importing particular goods or operating a licensed facility. The need for recognition, additional registration or amendment should be determined from the actual activity and current administrative route.
Reconcile the regulatory files separately
Foreign company reporting obligations in Iraq extend beyond maintaining the registration certificate. The applicable filings and notifications depend on the legal form, jurisdiction and operations.
A coordinated review should cover:
- Corporate registration, addresses and manager appointments.
- Tax files, contracts and financial statements.
- Employee records and social security registration.
- Residency, work authorisations and sponsoring entities.
- Premises and sector-specific licences.
Each file should show the effective date of a relevant change and the evidence of notification. Updating the address with a company registrar does not necessarily amend the tax or social security record. Different authorities may require separate applications and supporting documents.
Allocate transactions using their factual basis
Revenue and expenditure should be traceable to the contracting entity and work actually performed. An internal management allocation between Erbil and Baghdad is not conclusive for tax treatment. The applicable law, location of activities and supporting records require examination.
For example, employees may remain on one payroll while working continuously on a project elsewhere. The arrangement needs review for employment, social security and immigration consequences as well as accounting treatment. Moving the payroll entry alone may leave the underlying obligations unresolved.
Correct inconsistencies without rewriting history
Where records conflict, establish the sequence of events before submitting amendments. Distinguish the date the business moved, the date a corporate resolution was adopted and the date an authority accepted the change. Documents should accurately explain those differences.
Etihad Law Firm provides Iraqi branch compliance support for Turkish businesses, coordinating corporate legal counsel with the relevant tax and employment work. A documented correction plan allows the group to address each outstanding obligation and maintain consistent records as its Erbil and Baghdad operations develop.