Industrial investment land in Basrah under the Investment Law
The Law Office of Ali Barakat in Baghdad sets out the framework that Investment Law No. 13 of 2006, as amended, lays down for land allocated to an industrial investment project, including a project in Basrah. The office writes this page from Baghdad.
Title and musataha as they appear in article 10
Article 10, first, provides that an Iraqi or foreign investor enjoys all the advantages, facilities and guarantees, and is subject to the obligations, laid down in this law. Paragraph second (a) allows title to be granted to an Iraqi or foreign investor over land allocated to residential projects and belonging to the State and the public sector, and allows an Iraqi or foreign investor to purchase land belonging to the private or mixed sector for housing projects only, provided that does not conflict with the uses in the master plan. It also allows title to be granted to an Iraqi investor over land allocated to industrial projects and belonging to the State and the public sector, and a partnership with a foreign investor may be formed in financing or management, and an Iraqi investor may purchase land belonging to the private or mixed sector in accordance with a regulation issued by the Commission.
The investment-project contract is concluded with the sectoral body that regulates the activity, or with the commission that grants the licence, while the contract relating to the property is concluded with the owner, under paragraph second (b). A restriction on disposal is annotated on the title deed until the investor performs his or her obligations, as confirmed by the commission that granted the licence, under paragraph (c). A person to whom property has been granted must use it for the purpose for which title was given. In the situations described in paragraph (e), the property is returned to its former owner, on the commission’s application, against repayment of the sale price after a fair rent for the period is collected.
An Iraqi or foreign investor has the right to lease property, or to take it under musataha, from the State or from the private or mixed sector, in order to establish investment projects on it, for a period not exceeding fifty years, renewable with the agreement of the licensing commission and of the body mentioned in the article, after the nature of the project and its economic feasibility have been considered, except for industrial projects built in industrial cities, title to which is granted for a consideration and in accordance with the instructions, under article 10, third (a). The fifty-year limit is the rule for musataha or lease in this paragraph, not a price. The consideration in industrial cities is read in the instructions and the regulation.
Ministries, bodies not linked to a ministry, and municipalities in the governorate must provide properties suitable for investment projects and inform the National Investment Commission of their numbers, areas, ownership, category and uses, by preparing a map that is updated annually, under article 10, fourth (a). If the owners do not do so within sixty days of a request from the National Investment Commission, the Council of Ministers may transfer ownership of the land to the Commission without consideration, and the Commission allocates it to investment projects, under paragraph (b).
What applies to a project in Basrah?
Basrah is a governorate not organised in a region. An investment commission is formed there under article 5, with power to grant an investment licence and to plan within the governorate. A strategic project, or a project of a federal character, is taken to the National Investment Commission, under article 4. If the value of the project exceeds two hundred and fifty million dollars, the approval of the Council of Ministers is required before the licence is granted, under article 7(b). The choice of commission is set out on the page When to approach the Baghdad Investment Commission, and when the National Investment Commission?. The same logic applies to Basrah: the governorate commission within its scope, and the National Investment Commission in the federal and strategic sphere.
Article 10, third (g), allows investment in stalled projects in sectors of a strategic and federal character, and their rehabilitation and implementation, in coordination with the relevant bodies, with the licence obtained from the National Investment Commission exclusively. Paragraph (h) prohibits the transfer to investment of projects completed by the government that generate economically feasible revenues (self-financing companies). Paragraph (i) requires the local authorities to bring external infrastructure services up to the boundaries of the investment projects.
These provisions are a general legal framework. They do not take the place of a reading of the title deed, the category of the land and the master plan, or of the property contract with the owner. The numbers and areas of properties appear in the map prepared under article 10, fourth, and in the records of the Real Estate Registration Department.
Legal basis and sources
- Investment Law No. 13 of 2006 as amended (Official Gazette No. 4031 of 17/1/2007)
- Second Amendment Law No. 50 of 2015 (Official Gazette No. 4393 of 4/1/2016)
Frequently asked questions
Is industrial land granted in title to a foreign investor in the same way as to an Iraqi investor?
Article 10, second (a), allows title to industrial land belonging to the State and the public sector to be granted to an Iraqi investor, and allows a partnership with a foreign investor in financing or management. The grant of title to a foreign investor is set out in the same paragraph, in detail, for residential projects and their conditions. The text is read against the facts. The paragraph is not reduced to a general phrase.
What is the period of a musataha?
It does not exceed fifty years, and may be renewed with the agreement of the licensing commission and of the body mentioned in article 10, third (a), subject to the exception for industrial projects in industrial cities.
Related topics and articles
- 01When to approach the Baghdad Investment Commission, and when the National Investment Commission?When to apply to the Baghdad or National Investment Commission under Law 13/2006 as amended: strategic and federal projects, and Cabinet approval.
- 02How is an investment licence applied for, and who grants it?Applying for an investment licence under Law 13/2006 as amended: application, one-stop window, 45-day decision, sectoral reply in 15 days, grievance.
- 03Free Zones Authority Law No. 3 of 1998What Free Zones Authority Law No. 3 of 1998 provides: link to the Minister of Finance, the board, and deciding investment applications inside a free zone.
- 04The Kurdistan Board of Investment and an investment licence in the RegionInvestment Law 13/2006 on the Region’s commission and a Kurdistan licence, with no regional law number cited without a published official instrument.
- 05The legal framework for setting up a factory or industrial project in IraqTwo routes to a private or mixed industrial project in Iraq: a formation licence from the General Directorate of Industrial Development under Industrial Investment Law No. 20 of 1998, or an investment licence under Investment Law No. 13 of 2006. Who may use each, what each offers, and what the project owner must do.