A branch of a company formed outside Iraq

A company that was formed outside Iraq and wants a presence here can do so through a branch. The branch is not a fresh Iraqi company with its own founders and capital; under Regulation No. 2 of 2017 it is the legal person through which the parent company is represented on Iraqi soil. Since the 2023 amendment (Regulation No. 4 of 2023), "foreign company" covers any company, institution or entity that is registered abroad under the law of another state. The registration licence is the paper issued by the Registrar of Companies that declares the branch entered on the register.

The Law Office of Ali Barakat works from Baghdad, al-Yarmouk, on files that run from the opening application, through the licence and the steps that come after it, to the end of a branch's life by strike-off or by liquidation. What follows is a reading of the regulation and of its two amending regulations in the versions published on the Iraqi Legislation Database. Ending a branch is treated on closing a foreign-company branch. Choosing between a branch and a company formed in Iraq is treated on a branch or a limited company. How a branch differs from a subsidiary and from what people call a representative office is set out on a separate page.

The application: where it goes and what accompanies it

The file is lodged with the Registrar of Companies, whose office sits within the Ministry of Trade's department responsible for registering companies. Article 2, in the wording given to it by Regulation No. 4 of 2023, sets two conditions on the company itself: it must intend to undertake trading activity on Iraqi territory, and at least one year must have elapsed since its formation. Before that amendment the waiting time was two years; today the one-year rule applies.

Every document goes in with an Arabic translation and with authentication from the state where the company was formed. The regulation lists:

• the parent's memorandum or deed of formation, or the instrument that replaces it;
• a current certificate showing that the parent is registered, or its equivalent;
• the names of the board members or of the managing director, the nationality of each of them, and the names of the persons who sign on the parent's behalf, together with their identity papers;
• an instrument appointing the person who will run the branch in Iraq, who has to live in Iraq in fact and not on paper;
• an instrument appointing whoever lodges the opening application;
• the parent's closing accounts for its latest financial year, or for the year preceding it;
• the undertaking whose form the Registrar provides; and
• any further paper the Registrar asks for that bears on the parent's business.

The list above simply mirrors the regulation's text, so that a parent company can prepare its translations and authentications in one round rather than several.

Once a complete file satisfying article 2 is in, the Registrar has fifteen working days to say yes or no. Silence past that period counts as acceptance. A rejection has to state its reasons. The regulation recognises a right to object to a rejection, though it does not describe the route that the objection follows. Where the answer is yes, and after the charges laid down have been settled, the Registrar announces the decision in the internal bulletin, and the licence itself follows within seven working days counted from that announcement.

Holding the licence and being allowed to work are two different things

Article 4 leaves no room for doubt on this point: being entered on the register does not, by that fact, authorise the branch to start operating. Once the licence is out, a second set of papers goes to the Registrar:

• an official paper giving the complete address of the branch's place of business inside Iraq, authenticated in the manner the regulation lays down;
• proof that a current account has been opened with a bank holding an Iraqi licence;
• where the planned activity is one that needs the approval of a sector authority, the permit issued by that authority; and
• a letter from the Bar Association (نقابة المحامين) naming the legal adviser assigned to the branch.

Until this second set is complete and lodged, the branch is barred from trading, even though it already holds its licence. The licence is therefore a midpoint in the file under article 4, not its end.

Two standing duties begin at the same time. First, the branch's full name exactly as written on the licence, and the place in Iraq from which it is run, must appear clearly in Arabic on every paper and document it issues; another language may sit beside the Arabic. Second, the branch keeps proper books in Arabic covering everything it does in Iraq, following the accounting system and the laws that govern that subject.

The cases in which the branch may trade

Article 6 does not give a branch a general freedom to trade. It names a short list of situations:

1. performance begins under a contract signed with an Iraqi state body, or with a company of the public or mixed sector;
2. an investment contract is signed under the investment legislation that applies in Iraq;
3. a work permit is obtained from an Iraqi body that the law empowers to grant it; or
4. the branch works with Iraqi private-sector parties under a contract or project whose size meets the floor the regulation sets.

Article 14 received a third paragraph through Regulation No. 1 of 2025. That paragraph bars a foreign company that holds no registration licence from any trading activity in Iraq and from opening a place of business here. It then carves out one category: a foreign company whose contract is to supply goods or services. The carve-out stops applying where the supply contract also obliges the supplier to deliver services of whatever type on Iraqi soil over a span of one year or longer. The office reads that carve-out strictly, within its own words, and does not stretch it to situations it does not name.

Running the branch and reporting each year

Article 7 places the branch under a manager, or, while the manager is away, under a deputy whom the parent has authorised for that purpose; whoever holds the post must be resident in Iraq. When the manager or the deputy is replaced, the Registrar must be told within sixty working days, and the period starts on the day the Iraqi mission in the parent's home state authenticates the papers. This sixty-day figure comes from Regulation No. 4 of 2023; the original text allowed thirty working days.

A legal auditor holding an Iraqi licence examines the branch's books and operations. For each year, the audited closing accounts go to the Registrar together with a report describing what the branch did in Iraq, and both are due within eight months after the year closes. The Registrar may call for whatever information or papers the Registrar judges necessary, may send one or more inspectors to examine the branch's work where there is ground to do so, and the branch must give those inspectors the facilities their task calls for.

When the parent first takes up any trading activity in Iraq, it reports this to the Registrar on the activity form designed for the purpose. The same form serves the other side of the relationship: state bodies, and the public and mixed sectors, report to the Registrar any trading they conduct with branches of foreign companies.

Key periods in the regulation as amended

Exemptions, and files touching the Kurdistan Region

The regulation gives the Council of Ministers, acting on a proposal from the Minister of Trade, the power to exempt foreign companies from its provisions. The office notes that power in the terms the text uses and draws nothing further from it.

Inside the Kurdistan Region, the procedure before the Region's General Directorate for Companies Registration may not match the federal one. For that reason the office keeps its statement here general: when a file reaches the Region, the regional procedure then in force is examined on its own terms, without taking for granted either that a federal registration covers it or that it does not. The office has no branch office in the Region and follows such files from Baghdad, al-Yarmouk.

Legal basis and sources

1. Foreign Company Branches Regulation No. 2 of 2017 (Official Gazette No. 4438 of 13/3/2017)
2. Regulation No. 4 of 2023 (first amendment) — Official Gazette No. 4734 of 28/8/2023
3. Regulation No. 1 of 2025 (second amendment) — Official Gazette No. 4810 of 13/1/2025
4. Companies Law No. 21 of 1997, as amended by Law No. 17 of 2019

Frequently asked questions

Topics in this area

• 01Closing a foreign-company branch: liquidation and strike-offClosing a foreign-company branch in Iraq: strike-off by the Registrar, or liquidation on the company's request, under Regulation No. 2 of 2017 as amended.
• 02When is a branch chosen, and when is an Iraqi limited company chosen?Opening a foreign-company branch or forming an Iraqi limited company at the Registrar, under the 2017 regulation and Companies Law 21/1997, as amended.
• 03A branch, a subsidiary and a representative office, and what may differ in the RegionA foreign-company branch, an Iraqi subsidiary, and a so-called representative office, with a general note on the Region, under the 2017 regulation.
• 04What did the 2023 and 2025 amendments change in Iraq's Foreign Company Branches Regulation?The first amendment to Foreign Company Branches Regulation No. 2 of 2017, by Regulation No. 4 of 2023, and the second, by Regulation No. 1 of 2025: who counts as a foreign company, one year instead of two, the registrar's deadline and deemed approval, the legal adviser, when a branch is active, and the supply-contract exception.
• 05Can an unregistered foreign company operate or open an office in Iraq?Whether a foreign company may do business or open premises in Iraq without a branch registration licence: article 14 of Foreign Company Branches Regulation No. 2 of 2017, the 2025 supply-contract exception, when activity exists, and the penalty in article 215 of the Companies Law.

Always check the text in force and its amendments in the official source.

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