Iraq under the provisions of branches regulations order No. (2) of 2017 as amended by order 4 of 2023 (“Order”).
The key changes that the 2023 amendment applied to the Order are:
- The term “foreign company” that is recognized under the Order to open a branch was widened to include, companies, establishments, and any other entity formed under a foreign law. Of course, this applies to commercial (for-profit) entities only.
- The amendment to the text of Article (2) whereby a branch may be licensed for a foreign company that was incorporated one year before its filing for branch licensing. This duration was conditional to two years before the amendment.
- Article (2) also updated the list of required documents to be as follows:
- The parent company’s incorporation contract or similar document that replaces it.
- A valid certificate of registration (incorporation) of the foreign company or similar document that replaces it.
- A list of the names of the members of the board of directors or the authorized director and the nationality of each of them. The names of the persons authorized to sign on behalf of the company and their supporting documents of appointment/authorization.
- A document authorizing the branch manager with the capacity to manage/run the branch in Iraq; the manager should be an actual resident in Iraq.
- A resolution authorizing the person responsible for submitting an application to open the branch in Iraq.
- The financial statement of the parent company for the last financial year or the previous financial year.
- Executing/signing the standard pledge form prepared by the Companies Registrar.
- Any other document the Registrar may require. (Usually, nothing is requested here).
The above documents must be certified by the competent authorities in the country of establishment before submission to the Registrar and then translated into Arabic. The certifying authorities are the competent Ministry of Foreign Affairs in its country of incorporation, the Iraqi Embassy in that country, and the Iraqi Ministry of Foreign Affairs in Baghdad.
The registration license in Iraq does not entitle the Branch to perform activities in case a post-registration approval/license is required from a sectorial authority for such activities pursuant to the provisions of Articles 4 and 5 – First, paragraph (c) of the Order.
- The timeline for the Registrar’s decision on branch licensing application was reduced from 30 to 15 days. If no decision is made within 15 days, the application shall be deemed approved. The change also includes that the requirement to publish the Registrar’s decision in a local newspaper by the applicant is no longer effective or a condition.
- A Bar Association letter to appoint an attorney as an advisor is now a registration requirement.
- Article 6 / 2 of the Order was amended to require the conclusion of an investment contract, not only obtaining an investment license. other paragraphs remain unchanged.
- Article 7 /2 was amended to allow 60 days’ notice in case of a change of branch manager rather than just 30 days.
- Article 11 / 3 was also amended applying restriction on the Registrar to publish its liquidation decision within 15 days. As for the publication of liquidation decision it is assigned to the liquidator under Article 12 / 4
- Article (15) of the Order was amended by adding the following: the Companies Law No. (21) of 1997, shall apply on branches, to the extent that does not conflict with the provisions of the Order. Also, the Council of Ministers, based on the Minister’s of Trade proposal, was given the authority to exclude foreign companies from the provisions of the Order, which means not having to fulfill part or all of the licensing/registration requirements stated in the Order.
- All other provisions of the Order issued in 2017 shall remain unchanged. English copy thereof can be found here.