Guidance

Doing business in Iraq (including the Iraqi Kurdistan region): Iraq trade and export guide

Updated 11 July 2024

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This publication is available at https://www.gov.uk/government/publications/exporting-to-iraq/doing-business-in-iraq-including-the-iraqi-kurdistan-region-iraq-trade-and-export-guide

Managing risk

Find out how UK companies can control risks when doing business in Iraq.

Export opportunities and advice

Find more export advice and explore opportunities overseas on great.gov.uk.

1. Iraq export overview

Iraq, including the Iraq Kurdistan Region, is open for business. However, this is a challenging, high risk, but potentially high return market in which to do business.

The political and security situation remains fragile in Iraq. Despite this, commercial opportunities are huge as the country rebuilds its infrastructure and main institutions.

Sizeable contracts have been and continue to be signed with UK businesses robust enough and strategically placed to do business in Iraq

Iraq is highly dependent on oil. In 2021, this constituted 37% of Iraq’s GDP, 84% of government revenue and 96% of exports.

There are many British companies operating in Iraq, including BP, Shell, Standard Chartered, PwC, EY, Astra Zeneca, Land Rover Jaguar and JCB.

Benefits for UK businesses exporting to Iraq include:

  • long and established trade links between the UK and Iraq
  • growing economy
  • middle income country
  • British goods and services are considered as iconic by the Iraqis
  • immense scale of opportunities

Strengths of the Iraqi market:

  • fifth largest economy in the Middle East and 51st largest in the world

Contact UK Export Finance (UKEF) about trade finance and insurance cover for UK companies. You can also check the current UKEF cover position for Iraq.

2. Challenges doing business in Iraq

Iraq is a challenging market. It’s ranked poorly in the World Bank’s ‘Ease of Doing Business’ listing.

The main issues are:

  • security concerns
  • lack of transparency
  • stifling bureaucracy
  • ranks very low in Transparency International’s Corruption Perceptions Index
  • poor infrastructure
  • weak banking sector
  • difficulties in obtaining letters of credit and payment guarantees and delays in payments
  • arbitration can take months, if not years

Read the Overseas Business Risk report for Iraq.

You should ensure you take the necessary steps to comply with the requirements of the UK Bribery Act.

3. Growth potential

3.1 Economic growth

Following an economic slump caused by the Covid-19 pandemic, the International Monetary Fund (IMF) assessed that non-oil real GDP would rebound by 12% in 2021. Fiscal and current account balances were expected to improve significantly. Higher oil revenues presented the opportunity to tackle Iraq’s significant vulnerabilities, strengthen resilience, and achieve durable and more inclusive growth.

Huge hydrocarbon wealth is fuelling economic development across a range of sectors including:

  • oil and gas
  • renewables
  • infrastructure
  • security
  • healthcare

Iraq’s economy is dominated by the public sector, which is over resourced and inefficient.

3.2 Gulf region

The Gulf region is a gateway to Iraq for most larger companies based there. It can be an ideal location to conduct business for UK companies unable to travel to Iraq. However, Iraqis emphasise the importance of being present in Iraq to do business.

3.3 Free Trade Agreements (FTA)

Iraq has FTAs in place:

The UK and Iraq are currently negotiating a UK-Iraq Partnership and Cooperation Agreement, following the UK’s exit from the EU.

4. UK and Iraq trade

The UK total export of goods and services to Iraq was £450 million in the four quarters to the end of Q3 2021.

Total exports of UK goods to Iraq in the four quarters to the end of Q3 2021 were £343million.

Top UK goods exports are:

  • medicinal and pharmaceutical products
  • miscellaneous electrical goods
  • beverages
  • electric motors (capital)
  • general industrial machinery (capital)

5. Opportunities for UK businesses in Iraq

Department for Business and Trade (DBT) provides free international export sales leads from its worldwide network. Search for export opportunities.

5.1 Energy

Iraq’s economy in general and particularly the energy sector is heavily dependent on oil. However, since April 2021 the UK government no longer provides support for fossil fuel projects overseas. This is part of the government’s objective to support the sector’s transition to green technology and renewable energy.

DBT Iraq’s energy team in now focused on supporting UK businesses in the renewables, electricity grid, and gas capturing sectors.

The government of Iraq has set out ambitious targets to bolster its domestic energy supply capacity. Therefore, Iraq’s objective is to raise the share of clean energy to 20 to 25% by 2030, helped by a solid expansion in the country’s solar capacity.

Contact Director of International Trade, Iraq ditmeap.enquiries@fcdo.gov.uk for more information on oil and gas opportunities.

5.2 Infrastructure

The government of Iraq has embarked on a large-scale upgrade of its infrastructure projects. There has been strong UK engagement with the Iraqi Ministry of Construction and Housing, which leads on this sector at the federal level. The government of Iraq has expressed a wish to cooperate with a number of international parties, including UK contractors, for the delivery and execution of these infrastructure projects.

UK companies, as part of their market access strategies, are also targeting relevant provinces at the local government level.

Design and construction opportunities include:

  • water infrastructure (including waste water)
  • housing complexes
  • offices

Contact the export support team for more information on infrastructure opportunities.

5.3 Defence and security

There is a great demand to import high quality equipment and services to Iraqi defence and security departments. Iraq has the desire to modernise – in some cases based on British best practice and expertise.

The main opportunities DBT Iraq is negotiating with the Government of Iraq are air traffic control for military airbases, UAV and CUAV, cyber security, heavy machinery and personnel transport vehicles, explosive ordnance disposal, detection devices, mine clearance services, and communication systems.

Other service exports include deep maintenance and repowering of planes’ engines and navy boats, airports and infrastructure static and mobile security, tactical and specialized training, etc.

Contact the Export Control Joint Unit (ECJU) to check your goods you are meeting legal requirements for export.

Contact the export support team for more information on defence and security opportunities.

5.4 Healthcare

Iraq’s healthcare sector is valued at tens of billions of dollars.

Iraq’s healthcare sector is growing fast after years of deterioration. However, the country still holds some unique challenges for companies looking to access the market. The Iraq pharmaceuticals market is worth between $2-3bn per year, according to the Iraqi Ministry of Health.

The number of international companies looking to enter Iraq’s market is increasing. To gain access to the public sector, international companies must engage through the State Company for Marketing Drugs and Medical Appliance “Kimadia” to the Ministry of Health.

In the private sector, scientific offices and pharmaceuticals suppliers negotiate directly with international pharmaceuticals companies, in order to act as their representatives and local agents in Iraq. The country’s legal system and the strict product registration process can be difficult to navigate for companies coming into the market from outside Iraq.

The Government of Iraq considers its healthcare system to be modelled on that of the UK. The UK is therefore well placed to work with Iraq’s central government and local healthcare providers. Discussions between Healthcare UK and the Kurdistan Regional Government are underway.

Specific areas of opportunity for UK businesses are:

  • building hospitals
  • medical equipment and training
  • pharmaceuticals (including generic brands)

Contact the export support team for more information on healthcare opportunities.

5.5 Financial and professional services

Iraq’s financial and professional services sector is in urgent need of reform. The commitment to move away from state owned industry and create a private sector necessitates the need for more diverse and better financial and professional services.

Creative finance and professional solutions to increase liquidity in the market to fund projects is a priority for the Federal Government of Iraq.

Opportunities for UK business include:

  • investment banking to meet the needs of global clients operating in Iraq across various industry sectors, as well as local financing demands
  • budgeting reform and capacity building which will impact gold reserves and currency exchange

Contact the export support team for more information on financial and professional services opportunities.

5.6 Kurdistan Region of Iraq

The Kurdistan Region of Iraq is a semi-autonomous region which presents a number of opportunities in market for different priority sectors for British companies. Most trade opportunities are currently in the private sector. DBT is available to support in all sectors particularly those with the highest growth potential in the coming years, including:

  • infrastructure
  • healthcare
  • food & drink
  • tech
  • education
  • renewable energy

The Kurdistan Regional Government also have an ambitious plan to diversify the economy, broaden their implantation of the cabinets reform agenda, and to attract investment in sectors such as Agriculture, Tourism, and Manufacturing.

Contact the export support team for more information on the Kurdistan Region of Iraq.

6. Start-up considerations

The Iraqi market is not for the fainthearted. It’s more suited to medium to large sized companies with the capability to succeed in a tough market. You must have a proven track record in the Middle East and north Africa region to be likely to succeed here.

The principle options to establish a business in Iraq are to:

  • participate in a local Iraqi company or entity (for example, joint venture)
  • establish a branch office
  • appoint a trusted and well-connected commercial agent or distributor

Contact the Department for Business and Trade (DBT) Team in Iraq for help in setting up a branch office.

6.1 Investment agencies

The Iraqi National Investment Commission (NIC) facilitates foreign investment and is an important partner for the Department for Business and Trade (DBT) in Iraq.

The Iraq Investment Law No.13 provides the foundation for foreign investment in Iraq.

The Kurdistan Board of Investment regulates the Kurdistan Region.

You must comply with the Iraqi federal laws governing business activity.

You should seek in-country legal counsel on the best approach to doing business in Iraq.

Contact the Department for Business and Trade (DBT) Team in Iraq to help find tax and legal advisers before entering into agreements.

7.1 Standards and technical regulations)

Iraq is a member of the International Organization for Standardization (ISO). The Central Organization of Standardization and Quality Control (COSQC) has responsibility for quality control and standardisation issues.

7.2 Intellectual Property (IP)

Iraq is a signatory to the:

IP functions are spread across several ministries:

Enforcement of IP rights is challenging in Iraq.

8. Tax and customs declarations

The Ministry of Finance has responsibility for the Iraqi tax system.

8.1 Sales tax

A flat sales tax of 10% is applied to 5 star hotels and restaurant accommodations.

8.2 Customs

A 5% reconstruction fee on the value of goods imported into Iraq has replaced the original Customs Law, No. 77 of 1955. Projects which have been granted an investment licence are exempt from this tariff for a period of time, as determined by import type. Several categories of goods are also exempt, including food products, medicines, clothes, books and transit goods.

The Free Zones Law provides certain customs exemptions to projects established in one of the 4 free zones in Iraq.

8.3 Documentation

The documents needed for the import and export of goods to/from Iraq are:

  • commercial invoice – initiated by supplier
  • Certificate of Origin
  • Bills of Landing / Airway Bill
  • health and quality certificates (if applicable)

9. Business behaviour

There are 2 official languages in Iraq: Arabic and Kurdish.

The working week is Sunday to Thursday.

The Islamic dress code is not compulsory, but it’s advisable for women to dress conservatively.

10. Entry requirements and travel advice

Please see the FCDO travel advice for entry requirements and travel advice to Iraq.

In the Kurdistan Region of Iraq you can obtain a 30 day visa on arrival at Erbil and Sulaimaniah International Airports. This is valid for travel in the KRI only.

11. Contacts

Contact the Department for Business and Trade (DBT) Team in Iraq for more information and advice on doing business in Iraq, including the Iraqi Kurdistan Region.

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