- What is an investment license?
The Kurdistan Regional Government supports investments in the region by granting public benefits to projects that fall within the scopeof the Investment Law. Focal contact point and responsible for the licensing process is the BOI (one stop shop concept); investors willing to obtain an investment license have to apply at the respective branch office in each governorate. The BOI evaluates project proposals, decides on eligibility, facilitates land allocation and issues an investment license that grants public benefits, which are supervised and followed up during the construction and operation phases.
- Does every investment project in Kurdistan Region need to have an investment license?
Investors that do not wish to receive public benefits for their projects may also invest without applying for an investment license at the BOI. The first contact point for such projects should be the relevant sector ministry.
- What public benefits can be obtained by holding an investment license?
Based on the Investment Law, benefits include provision of land plots for nominal lease charges in specified areas, exemption from taxes and custom duties as well as provision of public infrastructure to the project fence. Exemptions from corporate taxes and customs duties are granted for ten and five years respectively starting from the beginning of operations.
- What is “strategic status”?
Investment projects which are declared as strategic receive additional benefits namely transfer of land ownership instead of lease. According to the Investment Law, the Supreme Council of Investment will transfer land ownership at a promotional price or free of charge for projects that receive strategic status. Candidate projects are assessed based on a set of criteria, e.g. the economic and environmental impacts of the project. The decision regarding “strategic status” is normally taken once a project is operational.
- Are foreigners doing business in Kurdistan obliged to be officially registered?
All companies wishing to directly do business in Kurdistan Region need to officially register. However, for companies already registered in Iraq or individual investors, no further registration is required.
- Are foreigners allowed to own land in Kurdistan?
Under the Investment Law, foreign and national investors are treated equally so that any investors may own the land of their investment project, e.g. if the investment project is granted strategic status.
- Is it possible for a foreign investor to invest without a local partner?
The Investment Law of Kurdistan Region treats foreign and local investors equally. Foreign investors may choose to invest in Kurdistan with or without local partners.
- How does employment take place in the region?
Laborers, executives, technicians and other staff are employed either through direct contracts with companies or with individual business owners. Priority is given to projects which employ a high share of local staff and ensure a high degree of knowledge transfer. Please refer to the applicable labor law for more information.
- Do investors have the right to employ foreign employees to work in investment projects in the Kurdistan Region?
Investors have the right to employ foreign employees in their projects. Additionally, foreign workers have the right to transfer their income to the country of their choice.
- Can foreign investors transfer income generated by their investment projects to their countries of origin?
Based on the Investment Law, full repatriation of profits is allowed. Additionally, every investment project is exempted fromtaxes for ten years from its start of operations.
- Can foreign investors transfer the project to other foreign nationals?
An investor may transfer his investment totally or partially to another foreign investor, or may assign the project to his partner with the approval of the Board. The new investor then replaces the previous one with having the same rights and obligations related to the project.
- Is the investor able to open up a bank account for the project?
An investor can open bank accounts for his project licensed under this law in national or foreign currency or in both irrespective of whether the bank is located inside or outside the region.
- Does the BOI offer loans or financial support to the investors?
Besides the public benefits mentioned in the Investment Law, no form of financial support is offered by the BOI.
- What are the BOI's commitments to local and foreign investors?
The BOI is the focal contact point for all investors in the region. The Board will facilitate and initiate all administrative procedures necessary to realize investment projects in Kurdistan Region, as well as grant public benefits for licensed project proposals.
- May investors obtain insurance coverage for the investment projects?
An investor may obtain insurance coverage for his investment project from any foreign or national insurance company that he sees fit, as such all aspects of operations that he carries out will be insured.
- Does the legal form of investor companies have an impact on the nature of projects?
Without prejudice to applicable laws regarding the boards of directors of joint-stock companies, the projects registered under the Investment Law shall be deemed as private sector projects, regardless of the legal form and nature of their shareholder funds.
- How is confidentiality ensured for investors?
An investor maymaintain confidentiality, technical and economic know-how of the project, and may uphold the investment initiatives in accordance with the previous of laws, regulations and directives applicable in the region. The respective law will punish any person who discloses any information related with the investment initiative and with technical, economic or financial aspects of the project.
- Who may the investor contact in case of detailed questions or more information needed?
For governorate specific questions the respective branch offices namely Erbil, Duhok and Sulaymaniah shall be contacted. General information, e.g. on investment opportunities and incentives in Kurdistan Region is provided by the central BOI
- What different process steps have to be taken during the licensing process?
The licensing process at the respective governorate BOI branch office will go through the following six process steps:
1) Submission of investment proposal
2) First assessment of submitted proposal for eligibility to receive public benefits
3) Land allocation for approved projects and submission of detailed plans
4) Second assessment and licensing
5) Construction commencement and completion in compliance with BOI license
6) Operation commencement in compliance with BOI license
For detailed information about the individual process steps please enquire at the respective governorate BOI branch office.
- How long does the licensing process take?
The BOI is committed to complete the investment licensing process as quickly and smoothly as possible. Due to the involvement of several government authorities, the processing time varies from case to case and depends mostly on land allocation. However, to minimize the processing time the investor should promptly submit sufficient and well prepared documents and follow up regularly on the progress.
- Where does the investor have to apply for an investment license?
The application should be made at the respective governorate branchoffices in Erbil, Duhok and Sulaymaniah.
- Which other permits does the investor need to implement an investment project? Which other ministries does the investor need to contact?
The first stop is the respective branch office of the BOI, which is centrally coordinating the process. After approval of projects it will direct applications to the relevant ministries/KRG bodies. Investors do not need to address other ministries without being requested to do so.
- Which documents does the investorneed to submit for an application?
Please contact the respective governorate offices for a list of required documents.
- What qualifies the project for obtaining an investment license?
Proposals should demonstrate a significant economic impact, have a sound business model, fulfill technical and architectural requirements, minimize negative environmental impacts and belong to the eligible sectors.
- To what sectors is the Investment Law applicable?
The provisions of the Investment Law apply to the projects approved by the BOI which belong to the following sectors:
- Manufacturing industries, electric power and related services.
- Agriculture, whether crop growing or animal farms, forestry and related services.
- Hotels, tourist and recreational projects, funfairs, and amusement parks.
- Health and environment.
- Science, technology research and information technology.
- Modern communication and transport.
- Banks, insurance companies, and other financial institutions.
- Infrastructure projects including construction, reconstruction and housing projects, roads and bridges,railways, airports,irrigation and dams.
- Free zones, modern commercial markets, and relevant advisory services.
- Education at all levels, within the framework of the educational policy of the region.
- Any other project in any other industry which the council agrees to fall within the scope of the Investment Law provisions.
- Is there any priority given to certain sectors by the BOI?
Currently, the priority sectors include Agriculture, Industry and Tourism.
For further information regarding the aforementioned matters, please refer to the websites of the Ministry of Planning, the Department of Foreign Relations or the publication “Doing Business in the Kurdistan Region in Iraq”. For general information, please also refer to the main website of KRG.