Iraq

Starting a Business in

Iraq

Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Iraq. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.

This information was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 189 economies. The most recent round of data collection was completed in June 2014.

Compare Iraq to 188 other economies.

  • Standardized Company

  • Legal form: Private Limited Liability Company
  • Paid in minimum capital requirement: IQD 1,000,000
  • City: Baghdad
No. Procedure Time to Complete Associated Costs
1 Reserve a unique company name at the Baghdad Chamber of Commerce and the Federation of Chambers of Commerce
Agency: Baghdad Chamber of commerce and Federation Chambers of Commerce

The company name should be an Arabic name. A special department at the Chamber of Commerce, Trade Names, starts by searching the suggested name through their system to see if the name is already taken or reserved by another company. Once a name is agreed upon and available, the name is reserved upon payment of a nominal fee. The Federation of the Chambers of Commerce is informed in order to ensure that the chosen name is not taken through other Iraqi chambers of commerce. This procedure likely requires more than one visit to both chambers and client coordination, ending with the reservation of the trade name by virtue of a letter addressed to the Company Registrar Office of the Ministry of Trade, issued by the Federation of Chambers of Commerce. In order to facilitate the company name reservation process, the Chamber of Commerce will open an office at the company registration office.
2 days IQD 500,000
2 Hire a lawyer to draft articles of association
Agency: Lawyer

Because lawyers are required to draft the articles of association, they are often also in charge of completing the registration process. The cost varies with the law firm. The lawyers drafting and signing the articles of association are usually licensed by the Company Registrar as a Company Registrar Agents.
1 day about IQD 1,500,000
3 Deposit the initial capital at a commercial bank and Obtain proof thereof
Agency: Bank

The company deposits the initial capital and obtains a confirmation receipt, which must be filed with the company registration application submitted to the Companies Registrar. The capital will be blocked in the bank account under the name of the company. It can be withdrawn immediately upon the issuance of the certificate of registration by the Registrar.

The fee varies depending on the bank of choice. It ranges from IQD 5,000 is paid if the bank is a public bank, up to IQD 25,000 for some private banks.
2 days IQD 5,000 - IQD 25,000
* 4 Obtain the shareholders' tax clearance certificates from the General Commission of Taxation
Agency: General Commission of Taxation

Every founder/shareholder must submit a tax clearance certificate issued by the General Commission of Taxation in order for the Registrar to accept the new company registration.
1 day (simultaneous with previous procedure) IQD 1,000 per tax clearance certificate
5 Apply for registration at the Companies Registry
Agency: Companies Registry

Fees are paid directly to the Companies Registrar. The fee schedule adopted by the Companies Registrar at the Ministry combines different fees (Registrar fees of approximately IQD 50,000; stamp duty of 2/1000 of the company capital; filing fees; certain checking process, etc.).

The Companies Registrar circulates the registration certificate to Al Rashed Bank, Al Rafidian Bank, Social Security Agency, Ministry of Trade, Ministry of Planning, the Central Bank, the tax authority, and other relevant agencies (including labor and so forth).

The following documents and information must be presented to the Registrar:
- Chambers of Commerce Union letter (to ensure the consistency of the company or trade name with other registrations)
- Certified letter of capital deposit from the bank
- Tax clearance for all the founders of the company
- Iraqi identify cards, and Proof of Iraqi certified citizenship
- Ration card revocation (food distribution form) by the Ministry of Trade
- Lease (Address) certificate letter from the mayor's office
- Phone number(s), email address(es), and P.O. box number(s) of the company's founder(s)
14 days IQD 250,000 - 350,000
6 Obtain the registration certificate
Agency: Companies Registry

The Companies Registrar issues the certification of registration and publishes the company formation announcement in an internal Bulletin.
On the date of issuance of the certificate of registration, the company acquires its legal personality. A registration circular will be sent to all the concerned entities.
1 day included in procedure 4
7 Make a company seal
Agency: Seal maker

Seal makers often ask for a copy of the certificate of registration in order to make a company seal which will reflect the exact name of the company as written on the registration certificate.
2 days IQD 20,000
8 Register for taxes at the General Commission of Taxation
Agency: Tax Authority

The Tax identification Number (TIN) is assigned to the company when the Registrar circulates the company registration certificate to the Tax Authority.
2 days IQD 450,000
9 Legalize accounting books
Agency: Accountants Union

The General Body of Taxes must notarize or register the company accounting books and any new accounting books.
2 days USD 150
10 Register employees for social security
Agency: Social Security Office

The cost for social security registration depends on the number of employees. The employer will deduct 5% from the employee’s salary and add to it an amount equal to 12% of the employee’s salary, resulting in a total contribution of 17% to the Social Security Authority.
3 days IQD 20,000
* Takes place simultaneously with another procedure.

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