Investment Law

The Investment Law No (13) of 2006 (an amended)

In the name of the people,

The Presidency Council,

Pursuant to what was approved by the Council of Representatives and endorsed by the Presidency Council and based on the provisions of paragraph (First) of Article (61) and paragraph (Third) of Article (73) of the Constitution, the following law is promulgated:


The Investment Law

Chapter One

Definitions

Article 1
The following terms, wherever mentioned in this Law, shall have the following specific meanings unless the context indicates otherwise:

A. The Council: The Council of Ministers.

B. National Investment Commission : The Commission established in accordance with this law responsible for drawing up the national policy and laying out its guidelines and monitoring the implementation of these guidelines and instructions in investment. It shall specialize in investment projects of a federal nature exclusively.

C. Region's Commission: The investment commission of the region responsible for granting investment licenses in the region.

D. Governorate Commission: The investment commission of the governorate not organized in a region responsible for investment planning and granting investment licenses in the governorate.

E. The Commission: The National Commission for Investment or the Region's Commission or the Governorate Commission as the case.

F. Chairman of the Commission: The Chairman of the National Investment Commission.

G. The Project: The economic activity subject to the provisions of this law.

H. The Assets: The tools, apparatuses, equipment, machineries, requirements, gear, transportation means and office furniture specified for exclusive use in the project, and the furniture, furnishings and the requirements of the hotels, tourist cities, hospitals, schools and colleges.

I. The Foreign Investor: The investor who does not hold the Iraqi nationality in the case of a real person, and is registered in a foreign country in the case of a juridical or legal person.

J. The Iraqi Investor: The investor who holds Iraqi Nationality in case of a real person and is registered in Iraq in the case of a juridical or legal person.

K. Taxes and Fees: All types of taxes and fees levied in accordance with the applicable laws.

L. The designed production capacity: The production capacity designed within a specific unit of time (hour, day ... etc) in accordance to what is fixed in the documents attached with the machines of the supplier.

M. Investment Portfolio: A collection of investments in shares and bonds.

N. Investment: Is the investment of capital in any economic or service activity or project that results in a legitimate benefit for the country.

Goals and Means

Article 2

This law aims at the following:

First: To promote investment and transfer modern technologies in order to contribute to the process of developing and enhancing Iraq, and expanding and diversifying its production and service base.

Second: To encourage the Iraqi and foreign private sector to invest in Iraq by providing the required facilities for establishing investment projects and enhancing its competitive capacities in the local and foreign markets for projects included in this law.

Third: To develop human resources based on market demands and provide work opportunities for the Iraqis.

Fourth: To protect the rights and properties of investors.

Fifth: To expand exports and improve the balance of payments and the balance of trade of Iraq.

Article 3

The following means shall be adopted to realize the objectives of this law:

First: To grant projects covered by the provisions of this law the necessary privileges and guarantees for its continuation and development by providing support in a way that enhances the competitive capacities of these projects in the local and foreign markets.

Second: To grant projects that obtained an investment license from the Commission, additional facilities and exemptions from taxes and fees in accordance with the stipulations of this law.

Chapter Two

The National Commission for Investment and the investment commission in regions &governorates

Article 4

First: A Commission shall be established and called the "The National Commission for Investment". It shall enjoy a juridical personality and shall be represented by the Chairman of the Commission or the person authorized by him. It shall be responsible for drawing up the national policies for investment and drawing up its plans, regulations and guidelines as well as monitoring the implementation of these guidelines and instructions in investment. It shall specialize in strategic investment projects of a federal nature exclusively.

Second: The National Commission for Investment shall be managed by a Board of Directors comprised of nine members who must be competent and specialized, and hold a college degree that suits the specialty of the Commission. They must not have been sentenced for a felony or misdemeanor of moral turpitude, or have declared their bankrupt.

Third:

A. Upon a request by the Prime Minister, the Council of Ministers shall nominate a Chairman of the Commission at a grade of Minister and a Deputy Chairman at a grade of Deputy-Minister for a period of five years and present them to the Council of Representative for approval.

B. The Prime Minister shall appoint four members for a period of five years at a grade of Director General.

C. The Prime Minister shall select three members from the private sector for five years after their nomination by Chairman of the Commission and specifying their compensations according to the bylaws.

D. At the conclusion of the membership of any member of the Commission referred to in Paragraph (A and B) of this Article in cases not involving dismissal and resignation, the Prime Minister shall assign them to any governmental entity at the same grade. Those mentioned in (A) of this article shall be retired on pension when not assigned to a government position equivalent to their grade.

E. The Council of Representatives may directly dismiss the Chairman of the National Commission for Investment and his Deputy, or upon a request by the Prime Minister for compelling reasons.

F. The Council of Ministers may dismiss or replace any member of the Commission or replace him with others in case he does not adhere to the standards and regulations of the Commission.

 

G. The Board of Directors of the National Commission for Investment shall meet at the invitation of its Chairman. The meeting quorum, taking decisions and recommendations shall be specified by absolute majority and the course of work organized by a bylaw issued by the commission.

H. The National Commission for Investment shall be connected to the Prime Minister.

I. The salary scale and entitlements of the Commission's employees shall be determined by a decision of the Prime Minister based on a proposal from the Chairman of the National Commission for Investment.

Fourth: The Commission's headquarters shall be in Baghdad and it may appoint representatives in the regions and governorates.

Fifth: The National Commission for Investment shall draw up an overall national strategic policy for investment identifying the more important of the sectors and shall prepare a map of investment projects in Iraq in the light of the information it receives from the regions and governorates. It shall also prepare lists of investment opportunities in strategic and federal investment projects with initial information about these projects and making it available to those wishing to invest.

Article 5:

first: In the regions and governorates that are not affiliated with a region, Investment Commissions are to be formed, which have corporate personalities, and are represented by their heads or anyone authorized by the head, and are funded from the region or governorate budget, and have the authority to issue Investment Licenses, investment planning, and encouragement, and can open branches in the area where they have jurisdiction in coordination with the National Commission of Investment to ensure that the law is properly enforced.

second:

A- The commission is headed by an employee with expertise and specialization, who is to be appointed in the post of a general manager for (5) years as suggested by the government that is not affiliated with a region and with the approval of the Presidential Council. The head of the commission is to be the chairman of the board of directors for the commission.

B- The head of the commission has a deputy to be appointed in the post of an assistant general manager for (5) five years by the region or the governorate not affiliated with a region, and is to be the deputy chairman of the board of directors.

C- The commission has a board of directors made up of (7) seven members including the head of the commission and his/her deputy.

D- The region or the governorate not affiliated with a region is to appoint two of its local officials from related agencies, with an administrative level of no less than a manager, as part time members in the board of directors for (3) three years.

E- The region or the governorate not affiliated with a region is to appoint, based on the suggestion of the head of the commission, three private sector individuals, with expertise and specialization, and with at least a university degree, and who have committed no felony or disgraceful offence, or declared their bankruptcy, as members in the board of directors for (3) three years, with rewards to be determined according to the internal code of the commission.

F- It is stipulated in the appointment of the chairman of the board and his deputy and the members of a region or a government not affiliated with a region, that it be done in coordination with the National Commission of Investment, and that they are not members in a Governorate Council or be deputies or assistants of the Governor.

G- The Governor, his deputies, his assistants, and the Governorate Council chairman and members do not have the right to be chairman, deputy chairman, or members of the Investment Commission in the region or the governorate not affiliated with a region.

H- The appointment and dismissal of the chairman and members of Investment Commission in the Governorate not affiliated with a region is done in coordination with the National Commission of Investment.

 

Third: The councils of region and governorates not organized in a region shall establish a mechanism of forming the investment commission of the region and the governorate and removing the Commission's members in case he/she does not adhere to the standards and regulations of the Commission.

Fourth: The Investment Commissions of the regions and governorate shall coordinate their work with the National Commission for Investment, and shall coordinate and consult with local governments regarding investment plans and facilities.

Fifth: The regions and governorates commissions shall draw up their investment plan in a way that does not contradict with the federal investment policy and shall prepare list of the investment opportunities in the areas that are subject thereto, with initial data about these projects and offer it to those wishing to invest.

Sixth: The region's Commission shall be connected to the Prime Minister of the region and is subject to the scrutiny of the region's Council. The governorate commission shall be connected to the Governor and is subject to the scrutiny of the governorate council in way that does not contradict with the provisions of this law.

Seventh: Regions and Governorates Commissions board of directors shall convene upon an invitation from their chairman. The quorum of convening and adopting resolutions and recommendations shall be determined by absolute majority. The conduct of work shall be organized by by-laws issued by the Commission.

Article 6

In addition to ordinary correspondence, the Commission shall adopt electronic mail with the official entities connected with the work and activity of the Commission through local networks or the Internet according to guidelines set by the Commission.

Article 7

A. The Commission shall accept investment license requests for projects whose capital is not less than the minimum amount determined by the Council of Ministers or the Council of Ministers of region as the case, by a regulation issued based on a proposal by the Commission.

B. The Commission must obtain the approval of the Council of Ministers before granting the license if the value of the investment project is more than two hundred and fifty million dollars.

C. The Commission shall make its final decision concerning the requests of investment license within a period not exceeding (45) forty five days from the date of filing a request.

D. The decisions of the Commission regarding the approved investments projects shall be obligatory for the purposes of this law.

 

Article 8

The Commission shall have an independent annual budget whose income shall be made up of its allocated amounts in the State General Budget.

Article 9

The Commission shall promote investment by working on the following:

First: Building confidence in the investment environment, identifying investment opportunities, and promoting and stimulating investment in them.

Second: Simplifying the procedures for registration, issuing of investment projects licenses, and following up on existing projects and giving them priority in processing with the official entities. Completing the procedures of answering investor requests and obtaining the required approvals for the investor and the project.

Third: Establishing one stop shop at the National Commission for Investment and the Regions and Governorates Commissions, which includes authorized representatives from the ministries, and members nominated by the Councils of the regions and governorates as the case and the concerned authorities; to undertake issuing licenses and obtain the approvals of other authorities in accordance with the law.

Fourth: Providing advice, information, and data to investors and issuing special manuals in this regard.

Fifth: Setting forth and implementing programs to promote investment in different areas of Iraq in order to attract investors.

Sixth: Facilitating the allocation of the needed lands and renting them out for establishing projects for a sum to be determined by the Commission in coordination with the concerned authorities.

Seventh: Establishing secure and free investment areas with the agreement of the Council of Ministers.

Eighth: Encouraging Iraqi investors through providing them with easy loans and financial facilities in coordination with the Ministry of Finance and with the assistance of Banking Institutions, provided that the investor obtaining the loan shall employ a number of unemployed Iraqis proportional with the volume of the loan.

Ninth: Any other tasks related to its work and assigned by the Council of Ministers.

 

 

 

Chapter Three
Privileges and Guarantees

Article 10

One: The Iraqi or foreign investor enjoy the same privileges, facilities, and guarantees, and submit to the obligations stated in this law.

Two:

A- The Iraqi or foreign Investor have the right to own lands and properties which belong to the government, for a revenue to be calculated based on a special system, and have the right to own lands and properties belonging to joint and private sectors for the exclusive purpose of executing housing projects.

B- A mark to prevent discretion is to be placed on the property deed until the foreign investor completes the execution of his obligations, with a confirmation from the Investment Commission that issued the license.

C- The Iraqi or foreign investor commits to abide by the purpose for which the land or property ownership was given, and not to trade in it.

D- If the Iraqi or foreign investor who was given ownership of a land or property as per this law, failed to fulfill their obligations in the period specified in the agreement made with the Investment Commission who issued the license, then the Real Estate Registration office, based on a request from said commission, would revoke the registration and return the land or property to its former owner in return for paying back the sale price.

E- The Iraqi or foreign investor commits to make residential units within a period specified in the agreement, and to sell or lease them to citizens as per the directives issued for that purpose. The Iraqi or foreign investor can handle the rest of the residential project for as long as the license is valid as per the agreement terms made with the investor.

 

Three:

A- The Iraqi or foreign investor can lease lands and properties from the Government, private, or joint sectors to establish investment projects on them for a period that does not exceed the period of the license, which does not exceed (50) fifty years that can be renewed after considering the nature of the project and its economic feasibility.

B- The investment commission which issues the license can make an agreement with the Iraqi or foreign investor to return the project to the government, the region, or the governorate not affiliated with a region after the expiry of the license period and with the terms agreed upon in the agreement signed with the investor.

C- The Iraqi or foreign investor can transfer the ownership of the investment project in whole or in part during the period of the license to any other Iraqi or foreign investor, provided that the new investor continues the work on the project in the same specialization or in another specialization after securing the approval of the commission which granted the license. The new investor replaces the old one in terms of rights and obligations stipulated by this law and the terms of the agreement signed with the said investor. In case the Iraqi or foreign investor transfers the ownership of the project during the period in which they have privileges, facilities, and guarantees granted by the agreement, then the new investor continues to enjoy them until the end of that period.

D- The commission which granted the license can make an agreement with the Iraqi or foreign investor to grant him ownership of the investment project as land and building, or just as building, depending on whether the project was a housing one or not respectively and consecutively, after the end of the license period without enjoying the privileges, facilities and guarantees stated in this law.

Four:

A- The procedures of leasing government properties to Iraqi and foreign investors for establishing investment projects as per this law are excluded from the rules of the Sale and Lease of Government Assets Law No. (32) for the year 1986, or any other law replacing it. The basis of calculating the rent is determined by a system made for this purpose.

B- The procedures of selling government properties to Iraqi and foreign investors for establishing housing projects as per this item of the law are excluded from the rules of the Sale and Lease of Government Assets Law No. (32) for the year 1986, or any other law replacing it.

 

Article 11

The investor shall enjoy the following benefits:

First: The investor shall have the right to take out the capital he brought into Iraq and its proceeds in accordance with the provisions of this law and pursuant to the instructions of the Central Bank of Iraq in an exchangeable currency after paying all his taxes and debts to the Iraqi Government and all other authorities.

Second: The foreign investor shall have the right to:

A- Dealing in Iraq Stock Exchange with shares and bonds that are dealt in it, and acquiring membership of private stock and mixed companies, even when there are properties within the assets of such companies.

 

B. Form investment portfolios in shares and bonds.

Third: Renting or leasing lands needed for the project for the term of the investment project, provided that it does not exceed 50 years renewable with the agreement of the Commission, and provided that the nature of the project and its benefit for the national economy is taken into consideration when determining the period.

Fourth: Insuring the investment project with any foreign or national insurance company it deems suitable.

Fifth: Opening accounts in Iraqi or foreign currency or both at a bank inside or outside Iraq for the licensed project.

 

Article 12

This law shall guarantee the following for investor :

First: The right to employ and use non-Iraqi workers in case it is not possible to employ an Iraqi with the required qualifications and capable of performing the same task in accordance with guidelines issued by the Commission.

Second: Granting the foreign investor and non-Iraqis working in the investment projects the right of residency in Iraq and facilitating his/her entry and exit to and from Iraq.

Third: Non-seizure or nationalization of the investment project covered by the provisions of this law in whole or in part, except for projects on which a final judicial judgment was issued.

Fourth: Non-Iraqi technicians and administration employees working in any project shall have the right to transfer their salaries and compensations outside Iraq in accordance with the law after paying their dues and debts to the Iraqi government and all other entities.

 

Article 13
Any amendment to this Law shall not have any retroactive affect regarding the guarantees, exemptions, and rights recognized by this Law.

Chapter Four 
Investor Obligations

Article 14

The investor shall observe the following:

First: To notify the National Commission for Investment,  the Region or Governorate Commission in writing immediately after the installation and equipping of the fixed assets for the purposes of the project and the date of the beginning of commercial activity.

Second: To keep proper records audited by a certified accountant in Iraq in accordance with the law.

Third: To provide an economic and technical feasibility study for the project and any information, data or documents required by the Commission or other competent authorities regarding the budget of the project and the progress made in its execution.

Fourth: To keep records of the project's duty-free imported materials in accordance with the provisions of this Law and specifying the depreciation periods of these materials.

Fifth: To protect the safety of the environment and to adhere to the valid quality control systems in Iraq and international regulations accredited in this field, also the laws related to security, health, public order and values of the Iraqi society.

Sixth: To adhere to the valid Iraqi laws regarding salaries, vacations, work hours and conditions and others as a minimum.

Seventh: Commitment to the correspondence of the work progress schedule submitted by the investor with actual progress that the time difference shall not exceed six months, and that the National Commission for Investment shall set forth punitive conditions in case of exceeding the six-month period and that the Commission shall have the right to withdraw the license.

Eighth: To train and rehabilitate its Iraqi employees as well as raising their efficiency, skill and capabilities. Priority in employment and recruitment shall be given to the Iraqis.

Chapter Five

Exemptions

Article 15

First: the project that has obtained an investment license from the commission shall enjoy exemption from taxes and duties for a period of (10) ten years as of the date of commencing commercial operations in accordance with the areas of development defined by the council of ministries at the suggestion of the national commission for investment based on the degree of economic development and the nature of investment project second: The Council of Ministers shall have the right to propose draft laws to extend or grant exemptions in addition to the exemptions stipulated in paragraph (First) of this Article, or provide incentives, guarantees or other benefits to any project or sector or region and for the years and percentages it deems appropriate in accordance with the nature of the activity, its geographical location and its contribution to manpower employment and its effect on driving the economic development, and for considerations of national interest.

Third: The National Commission for Investment has the right to increase the years of tax and duties exemption in a way directly proportional to the increase in the Iraqi Investor share in the project to reach fifteen years if the Iraqi Investor share in the project was more than 50%.

Article 16

If the project is moved during the granted period of the exemption from a development area to another, the project shall receive, for the purposes of the exemption mentioned in paragraph (First) of Article (15) during the remaining term, the treatment of the projects in the development areas it is moving to, provided that the commission is informed of such move.  

 

 

 

 

 

Article 17

The project that obtains an investment license shall also enjoy the following:

First: Assets imported for the purposes of the investment project shall be exempted from customs, provided that their entry to Iraq is made within (3) three years from the date of granting the investment license.

Second: The imported assets required for the expansion, development or modernization of the project shall be exempted from customs in case they led to an increase in the designed capacity, provided they are brought in within three years from the date of notifying the Commission of the expansion or development. Expansion, for the purposes of this law, shall mean adding fixed capital assets aimed at increasing the designed capacity of the project in commodities or services or materials by a percentage exceeding (15%) fifteen percent. Development, for the purposes of this law, shall mean replacing project machines with more developed ones, totally or partially or making a development on the standing devices and equipments of the project by adding new machines and devices or parts thereof with the aim of raising the productive efficiency or improving and developing the quality of the products and services.

Third: Spare parts imported for the purposes of the project shall be exempted from customs if the value of these parts does not exceeded (20%) twenty percent of the fixed assets value, provided that they are not be used for any other purpose.

Fourth: Hotels, tourist institutions, hospitals, health institutions, rehabilitation centers and educational and scientific organizations projects shall be granted additional exemptions from duties and taxes on their imports of furniture, furnishings and requisites for renewing and updating purposes at least once every four years, provided that these items are brought into Iraq or used in the project within (3) three years from the date of the approval decision of the Commission on the import lists and their quantities, and provided that these items are not used for purposes other than the imported purposes.

Article 18

If it is found that the fixed assets exempted, in whole or in part, from taxes or duties were sold in violation of the provisions of this law or were used in anything other than the project or for purposes other than the authorized purposes, the investor must pay the taxes, fees, and fines incurred pursuant to the law.

Chapter Six
Procedures for Granting Investment license and Project Establishment:

Article 19

First: The investor shall obtain the license in addition to obtaining the rest of the licenses for the purpose of enjoying the privileges and exemptions provided by the Commission.

Second: The Commission shall grant the license for investment or project formation based on a request submitted by the investor according to conditions facilitated and prepared by the Commission. The request submitted by the investor shall include the following:

A. Filling a request form prepared by the Commission

B. Financial competency from an accredited bank

C. Projects performed by the investor inside or outside Iraq

D. Details of the project intended to invest in and its economic feasibility.

E. A timetable for completing the project.

Article 20

First: The Commission must issue the establishing license through establishing one stop shop in the region or the governorate not organized in a region that includes authorized representatives of the ministries and relevant bodies. The Commission shall grant project formation license and obtain approvals from the entities in accordance with the law.

Second: The Commission must help the investor to obtain licenses by approaching the competent authorities and exploring the opinions of the entities concerning the issuance of the formation license. These entities must issue the decision to reject, approve or request amendment within 15 days from the date of being notified. The failure to reply from the entity from which the opinion is solicited shall be deemed as an approval and in case of a rejection there must be cause for it.

Third: In case of disagreement between the National Commission for Investment decision and the other relevant entity regarding the granting of the license other than the Region's Commissions, the dispute shall be brought before the Prime Minister for settlement.

Fourth:

A- When an investment license request is denied, then the applier can request reconsideration from the head of the commission of the Region or governorate not affiliated with a region within (15) days from the date of notification of the rejection. The head of the addressed commission should make a decision about the request within (7) days from the date the plea was registered in his office.

B- The plea submitter can make an objection at the National Commission of Investment within (15) days from the date the rejection decision was issued. The Commission has to make a decision about the objection within (15) days from the date it was registered at the office of the head of the National Commission of Investment.

C- If the National Commission of Investment refused a license request submitted, then the requester can ask the Commission to reconsider its decision within (15) days from the date the requester was notified of the refusal decision. The Commission has to make a decision about the reconsideration plea within (7) days from the date it was registered at the office of the commission head. The commission’s decision can be objected to at the Council of Ministers within (15) days from the date of its notification.

 

Chapter Seven
General Provisions

Article 21

The project capital subject to the provisions of this law shall be made up of the following:

First: Cash transferred to Iraq through financial banks and companies or any other legal means with the aim of investing it for the purposes of this law.

Second: The assets and incorporeal rights imported to Iraq or purchased from the local markets by the cash transferred into Iraq:

A. assets related to the project.

B. machinery, tools, equipment, buildings, constructions, transportation means, furniture and office appliances required for establishing the project.

C. incorporeal rights that include patents, registered trademarks, technical know-how, engineering services, administrative and marketing services and the similar.

Third: Profits, proceeds and reserves resulting from the capital invested in Iraq in the project, if the capital of such a project was increased or was invested in another project covered by the provisions of this law.

 

Article 22

The foreign investor shall enjoy additional privileges in accordance with international agreements signed between Iraq and his country or multilateral international agreements which Iraq has joined.

Article 23

If the project ownership is transferred during the granted period of the exemption, it shall continue to enjoy granted exemption, facilities and guarantees until the end of that period, provided that the new investor continue to work on the project in the same specialization or in another, with the approval of the Commission. The new investor must take the place of the former investor in the rights and obligations consequent to the provisions of this law.

 

 

Article 24

First: The investor, with the approval of the Commission, may sell exempted fixed assets or relinquish it to another investor benefiting from the provisions of this law, provided that he uses them in his project.

Second: The investor, after informing the Commission, may sell the exempted fixed assets to any person or other project not subject to the provisions of this law after paying the outstanding fees and taxes.

Third: The investor, with the approval of the commission, may re-export the exempted assets.

Article 25

In the event two or more companies or enterprises merge, the new company or entity resulting from the merger must set up separate accounts for each project before the merger in order to register and apply exemptions and facilitations stipulated in this law during the remaining period of the exemption.

Article 26

Any project approved in accordance with the provisions of the previous applicable laws shall continue to benefit from all exemptions granted to it pursuant to that law and until the expiration of the exemption period and under the same terms.

Article 27

Disputes arising between parties who are subject to the provisions of this law shall be subject to the Iraqi law unless otherwise agreed, except the cases that are subject to the provisions of the Iraqi law exclusively or the jurisdiction of Iraqi courts.

1- Disputes arising from the work contract shall exclusively be subject to the provisions of the Iraqi law and the jurisdiction of Iraqi courts. Non-Iraqi laborer shall be exempted if the work contract stipulated otherwise.

2- If parties to a dispute are non-Iraqis and in disputes not arising from a crime, the opponents may agree on the law to be applied, the competent court or any other agreement to resolve their dispute.

3- If a dispute between the partners or between the owner of the project and others in a project subject to the provisions of this law resulted in the stoppage of work for a period exceeding three months, the Investment Commission may withdraw the license and ask the owners of the project to settle the dispute within a period not to exceed three months. If such period elapsed without settling the dispute between the partners or between the owner of the project and others, the commission may take legal measures to liquidate the project and notify the owner of the project or one of the partners of such action. The liquidation money shall be deposited in one of the banks after paying the dues of the State or any other dues after final judgment of their entitlement is rendered.

4- If one of the parties to a dispute is subject to the provisions of this law, they may, at the time of signing the agreement, agree on a mechanism to resolve disputes including arbitration pursuant to the Iraqi law or any other internationally recognized entity.

5- Disputes arising between the Commission or any governmental entity and any of those subject to the provisions of this law on matters not related to violations of one of the provisions of this law shall be subject to Iraqi law and courts on civil matters. As for commercial disputes, parties may resort to arbitration provided that such an arrangement is stipulated in the contract organizing the relationship between parties.

 

 

Article 28

In case the investor violates any of the provisions of this law, the Commission shall have the right to warn the investor in writing to remove the violation within a specific period. In case the investor does not remove the violation within the specified period, the Commission shall summon the investor or who represents him to state his position and grant him other period to settle the issue. Upon repeating or not removing the violation, the Commission shall have the right to withdraw the investor's license it issued and order stoppage of work on the project and retain the state's right to deny the investor the granted exemptions and privileges from the date of the violation and allow others to retain their rights to demand compensation for the damage caused by this violation, without breaching any punishments or other compensations stipulated in the applicable laws.

Article 29
All areas of investments shall be subject to the provisions of this law except:

First: Investment in Oil and Gas extraction and production.

Second: Investment in banks and insurance companies sectors.

 

 

Article 30

The Ministry of Finance, and the Ministry of Municipal and Public Works, Baghdad and other governorate municipal administrations, Commissions and other agencies not related to a ministry are committed to provide lands and properties appropriate for establishing investment projects and notifying the National Commission about their numbers, areas, ownerships, classifications and uses. The National Commission assigns them to Iraqi or foreign investors according to a system suggested by the National Commission and with the approval of the Council of Ministers.

 

 

Article 31

The Council of Ministers shall have the right to:

First: Issue regulations to facilitate the implementation of the provisions of this law.

Second: Issue bylaws defining the Commission's formations, divisions, tasks, process of its work, its authorities, financial affairs, employee affairs and any other matters.

Article 32

The Committee may issue instructions to facilitate the implementation of regulations issued by the Council of Ministers pursuant to the provisions of this law.

Article 33

A- The rules of this law apply to mixed and private sector existing projects by request from their administrations and the approval of the commission without a backdated effect.

B- The public sector projects contracted for rehabilitation or operation with private and mixed sectors can have all the privileges, facilities and guarantees permissible by the law. This also applies to projects that were contracted before this law was passed, provided that the application does not mean exemption from any fees or taxes which were due before this law was passed.

 

 

 

 

 

Article 34
No text shall be valid which contradicts the provisions of this law.

Article 35
The (dissolved) CPA Order No. 39 of 2003 shall be revoked.

Article 36

The Arab Investment Law no (62) of 2002 issued by the dissolved Revolution Command Council shall be revoked.

Article 37
This Law shall enter into force from the date of its publication in the Official Gazette.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Justifying reasons :

In order to facilitate and organize work in the National Commission of Investment, and create a climate that encourages investment in Iraq, especially in the housing sector, and to remove any legal obstacles that might stand in its way, in a manner that positively expedites the economical development and rehabilitation in Iraq, this law was passed.

 

System No.(7) for the year 2010(an amended)

 

 

Selling and Leasing the State and Public Sector Properties and Lands for Investment Purposes

 

System No.(7) for the year 2010

 

System of selling and hiring state real estates and lands and public sector for purposes of investment.

Article 1 - the rules of this system are to be obligatory to the Iraqi and foreign investors who got the investment license by virtue of rules of a (amended) Investment Act No(13) for the year 2006.

Article 2- The system aims at the following:

First :- to promote investment, the investment projects generally ,and projects of housing specifically.

Second:- To reduce the costs for the Iraqi citizen to enable him to own a real estate and participate in solving the crisis of housing.

Third:- to enable the investors to execute investment projects in Iraq, specially building housing units in different types of housing to meet the citizen groups' demands within the limit of their financial capabilities

Fourth :- to organize the bases of selling amounts and estimation of rent amount for the state real estates and land for the investors and /or specify the incomes of the state from investment projects established on them.

Article 3-

 First – The Ministries of Finance, Municipalities, Public Works, Secretariat of Baghdad, Municipalities in the Provinces ,Commissions and organizations not affiliated with a ministry to provide the lands and real estate suitable for establishment of investment projects, and notify the National Investment Commission about their numbers, areas, ownership ,type and usages.

Second :- The National Investment Commission is responsible for, with coordination with the Investment Commission in the Region or the Investment Commission in the Province not affiliated with a Region, specifying the real estates and lands suitable for executing the specific investment projects.

Article 4- The lands and properties owned by the State and public sector departments shall be assessed for the investment projects, excluding residential projects, by committees to be formed in the following manner:

A- For the investment project which value is more than USD 250 million, committees shall be formed by the National Investment Commission in the following manner:

 Head of the National Investment Commission – Chairman.

 Head of the Investment Commission in the relevant governorate –Member.

 Director General of the State Board for Taxes – Member.

 Director General of the Real-Estate Registration Directorate – Member.

 A representative of property’s or land’s owner – Member.

B- For the investment project which value is less than USD 250 million, committees shall be formed by the National Investment Commission, in coordination with the investment commission of the region or the investment commission in the un-regionalized governorate, in the following manner:

 Head of the Investment Commission in the relevant governorate –Chairman.

 Representative of the National Investment Commission – Member.

 Representative of the State Board for Taxes in the governorate – Member.

 Representative of the Real-Estate Registration Directorate in the governorate – Member.

 Representative of the Property’s or Land’s owner.)

 

Article 5-

First – The National Investment Commission, for residence purposes, may alienate land to the investor free of charge, provided that the land’s price shall not be calculated within the value of residence unit sold to the citizen.

Second – The Committees formed under Article 4 above shall determine the values of lands for investment purposes, except residence. They may resort to competent specialists in this field.)

 

Article 6-

First - A lien is marked on the property bond till the investor meets his obligations and with approval of the investment commission granted the license .

Second- The Iraqi or foreign investor is to stick to the purpose of which the land or the real estate is granted with no speculation is allowed with it.

Third - In case the Iraqi or foreign investor who owned a land or real estate by virtue of this act fails to meet his obligations within the specified period in the contract with the investment commission granted the license, the Real Estate Registration Office, on a request from the above mentioned commission, cancels the registration and returns the land or the real estate to its original owner.

Fourth - The Iraqi or foreign investor is to establish the housing units within the period specified in the contract and sell them to the citizens according to the instructions issued for this purpose by the National Investment Commission. The Iraqi or foreign investor may use the remaining of the housing project in the license period according to the provisions of the contract with him.

Article 7- The National Investment Commission shall dedicate the lands necessary for implementing multi-purpose residence towns (residential compound, entertainment etc.) in the following manner:

First: The Investor shall return the lands used as public utility (gardens, streets… etc.) to the relevant governmental bodies during a year from the project’s execution, free of charge.

Second: - the lands are allocated to the investors for the purposes of establishing service and commercial projects inside housing cities against share amount 7 % of its annual rental amounting  as assessed by the committees referred to in article 4 of this system, by condition to dedicate the mentioned amounting to the relevant governorate and municipalities in half.

 

 Article 8- The National Investment Commission shall lease the required lands for the purposes of executing the industrial, agricultural, tourism, entertainment and other projects in the following manner:

First: The strategic agricultural projects which lead to increase and improve animal and vegetable production as follows:

1- Reclaimed arable lands, which have water share, against rental amounting to 20% of its annual rental as assessed by the committees mentioned in Article 4 of the Regulations 7 for 2010.

2- Non-reclaimed arable lands, which have water share, with a rental amounting to 10% of its annual rental as assessed by the committees mentioned in Article 4 of the Regulations 7 for 2010.

3- Non-reclaimed non-arable lands, which do not have water share, with a rental amounting to 1% of its annual rental as assessed by the committees mentioned in Article 4 of the Regulations 7 for 2010.

Second: The industrial projects erected in the areas determined for the industrial investment projects purposes with a rental amounting to 2% of its annual rental as assessed by the committees mentioned in Article 4 of the regulations 7 for 2010.

Third: Power, oil and other projects located outside the municipality borders, which are executed in the manner of Building, Operation, Ownership (BOO) and Building, Operation, Transfer (BOT) to the beneficiary, with a rental amounting to 2% of its annual rental as assessed by the committees mentioned in Article 4 of the Regulations 7 for 2010.

Fourth: Service projects (hospitals, education centers, universities … etc) with a rental amounting to 5% of its annual rental as assessed by the committees mentioned in Article 4 of the Regulations 7 for 2010.)

Article 9the National Investment Commission allocates the required lands for the purposes of investment projects execution as shown below:

First: tourism projects ( tourism cities, entertainment cities, recreation compounds …etc) against share amounting 10 % annually to land owner of land rental amounting as assessed by committees previously referred to in article 4 of this system.

Second: commercial projects ( trade centers, hotels… etc) against share amounting 10 % annually to the land owner of land rental amounting as assessed by committees previously referred to in article 4 of this system for the first three year of starting commercial operation to the project, after mentioned period finished, the amounting rental would be 5% of land value as assessed by committees previously referred to in article 4 of this system with a reference to the above in the investment contract agreed between the two parties.

 

 

Article 10- maturity date of land amounting rental starts date of starting commercial operation to the project on condition that the investor execute the project in time mentioned  in the contract.

 

Article11 - The head of the National Investment Commission may issue instructions to facilitate executing the rules of this system.

Article12- This system is to be published in the official gazette and considered valid starting from  its publication date.