Iraq: law and taxes review

Hadeel Hassan, senior advocate in Iraq, is based in Baghdad.
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Infrastructure opportunities in Iraq are emerging. UME reviews the state’s legal basics with lawyers working on the ground

Working within an existing legal framework is a requisite of any overseas venture, but with a muddled impression of Iraq’s legislative scene exported through the primary international media channels, many firms with big ambitions may be unsure of the situation within the oil rich nation’s borders.

Hadeel Hassan, senior attorney, based in Baghdad, and Nadia Salem, Iraq team leader, based in Doha, met with UME to put the record straight.

Have you maintained a presence in Iraq?

Nadia Salem: Al Tamimi has had an operational office in Iraq since 2003. In 2006 the security situation took a turn for the worse, so our lawyers remained, but worked from home. That way we kept our physical presence there. Now the situation is better, so we’ve relocated and the office is up and running again.

In terms of dealing with international clients, telecommunications from Baghdad can be troublesome. Largely because of the communication issues, I work out of Doha, but represent our lawyers in Iraq to clients globally.

 What sectors are attracting the most attention?

Hadeel Hassan: Construction and oil are the two sectors where we are already seeing the most growth, and I don’t think that will change for a while. Real estate and infrastructure projects are on the drawing board, but there are still issues with electricity supplies, which are hampering their progress, for example there are no still no functioning traffic lights.

However, the government is working on that, and the fundamental issues that need fixing are getting attention.

NS: Everyone wants to participate in the reconstruction of Iraq, even now when the global economy is facing negative growth, there is a massive interest to invest and rebuild in Iraq.

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NS: We represent clients from the US and UK, but it’s a generally global mix. The potential across many sectors and industries is huge there. Now that the security situation is improving these development projects are back in focus.

People aren’t constantly worried about the safety of their lives, so now they can focus on bringing back the quality of their lives. People want air conditioning back in summer, and functioning telephones, which again, is
getting better.

 What legal framework is the country working under?

NS: The legal framework still exists from before the invasion, so it’s not a lawless country by any stretch. In many ways it is very similar to the legal system in other countries in this part of the world, and because of that continuity it is actually well developed.

In my experience companies have typically appointed an arbitration court outside Iraq too, but this is fairly typical with major international deals where companies operate in a third-party or host country, or where firms from several countries are involved.

 Are there any significant barriers to business?

HH:Until now big companies have not been able to get into Iraq because of the security situation. However, that is improving, and power, infrastructure, and energy projects are all on the radar now.

There are clear signs of improvement all over the country. It’s not just the security zones around Baghdad where business can operate now. It wasn’t that long ago that Fallujah was basically off limits. It was very dangerous even for Iraqi’s, but now that’s not the case, travelling around is much better.

It’s relatively simple to get a visit visa for someone to come to Iraq. The Ministry of Interior is working with embassies to streamline the process as much as possible for contractors, so visa issues shouldn’t be seen as a barrier to business.

Big companies need relationships with the citizens in and around the areas they work in, and that can be hard to do without any local knowledge. What we can do is more than just legal services, by putting them in touch with local companies and services, we can facilitate the relationships that businesses need to get off the ground and be comfortable. Being in Iraq we have an extensive network of colleagues and firms we do business with which is invaluable to our clients, especially with regard to government ministries.