How is an investment licence applied for, and who grants it?
The Law Office of Ali Barakat in Baghdad sets out how an application for an investment licence is made, what the application must contain, and which periods Investment Law No. 13 of 2006, as amended, fixes for the decision, for sectoral consultation, and for objection and grievance. The original of the law was published in the Official Gazette, issue 4031 of 17/1/2007, and was amended by Law No. 2 of 2010 and Law No. 50 of 2015. The page arranges the procedure as it appears in articles 7, 9, 19 and 20.
Who grants the licence, and what must the application contain?
The investor obtains the licence in addition to obtaining the other licences, in order to enjoy the advantages and exemptions the Commission offers, under article 19, first. The Commission grants an investment licence for the establishment of the project on an application the investor files. The application includes, under paragraph second: the application form prepared by the Commission; a financing plan for the project, accompanied by a guarantee from the financing body, being an accredited financial institution; the projects the investor or the investor’s partners have carried out in Iraq or abroad, and the bodies supporting the investor in implementing it; the details of the project in which investment is intended and its economic feasibility; and a timetable for completing the project. After obtaining the licence, the investor is given a special investor identity under which those advantages are enjoyed, organised by instructions and controls issued by the National Investment Commission and ratified by the Council of Ministers, under paragraph third.
Which commission is approached? The National Investment Commission for strategic projects and projects of a federal character; the governorate commission in a governorate not organised in a region; and the Region’s commission in the Region, under articles 4 and 5, as set out on the page When to approach the Baghdad Investment Commission, and when the National Investment Commission?. The Commission accepts applications for projects whose capital is not less than the minimum fixed by the Council of Ministers, or by the Council of Ministers of the Region as the case may be, in a regulation issued on the proposal of the Commission, under article 7(a). The approval of the Council of Ministers must be obtained before the licence is granted if the value of the project is more than two hundred and fifty million dollars, under paragraph (b). The Commission must decide applications for an investment licence within a period not exceeding forty-five days from the date the application is filed, under paragraph (c). Decisions of the Commission concerning approved investment projects are binding for the purposes of this law, under paragraph (d).
The Commission’s objects, under article 9, include simplifying registration and licensing procedures and following up existing projects; establishing a one-stop window composed of authorised delegates of the relevant government bodies, which recommends the grant of the licence after the approval of the bodies concerned has been obtained in accordance with the law; providing advice and information; and facilitating the obtaining of the property needed to establish projects, in the manner the Commission determines.
The one-stop window, the periods, and objection and grievance
Article 20, first, provides that the Commission issues the investment licence through a one-stop window composed of authorised delegates of the ministries and the relevant bodies. Through that window, the Commission consults the sectoral bodies, by means of their delegates, in order to obtain their approval of the investment project. Those bodies must issue their decision — approval, refusal or a request for amendment — within fifteen days of being notified. The government delegate must obtain the reply within that period. Failure to reply is treated as approval, and a refusal must be reasoned, under paragraph second (a). If the period expires, or if the refusal is unreasoned or arbitrary, the one-stop window may submit its recommendation that the licence be granted to the head of the commission concerned, or to the board of directors as the case may be, with a view to its issue, under paragraph (b). After the licence is issued, all government bodies must cooperate with the Commission to complete the requirements for starting the project within thirty days of the date of issue, under paragraph (c).
If there is a disagreement between a decision of the National Investment Commission and another relevant body over the grant of a formation licence other than the Region’s commissions, the disagreement is referred to the Prime Minister for decision, under article 20, third. The wording of that paragraph is read as it stands.
If an application for formation is refused, the applicant may request a reconsideration from the head of the Region’s commission or of the commission of a governorate not organised in a region, within fifteen days of being served with the refusal, and the head of the commission concerned must decide the request within seven days of its registration in that office, under article 20, fourth (a). The applicant may object to the National Investment Commission within fifteen days of the date of the refusal, and the Commission must decide the objection within fifteen days of its registration in the office of the head of the National Investment Commission, under paragraph (b). If the National Investment Commission refuses an application for formation filed with it, the applicant may request the Commission to reconsider it within fifteen days of being served with the refusal, and the Commission must decide the request within seven days of its registration in the office of the head of the Commission. That decision may be objected to before the Council of Ministers within fifteen days of service, under paragraph (c).
If the investment licence is withdrawn by the commission that granted it, for any reason, the investor may file a grievance with the head of the commission concerned within fifteen days of the grievance being registered with the Commission. Failure to reply within that period is treated as a refusal of the grievance, under paragraph (d). A person whose grievance has been refused, actually or by implication, may file a grievance with the head of the National Investment Commission within fifteen days of being served with the refusal, and the head of the Commission must decide the grievance within fifteen days of its registration in that office, under paragraph (e). If the grievance is refused, or if the period in paragraph (e) expires without the grievance being considered, the investor may challenge the decision before the court mentioned in paragraph (f) of article 20. The text uses a general expression in that paragraph. A court is named only if the law has designated it.
| Step | Period | Article |
|---|---|---|
| The Commission’s decision on an application for an investment licence | Forty-five days from filing | 7(c) |
| The sectoral body’s reply to the consultation; silence is treated as approval | Fifteen days from notification | 20, second (a) |
| Government bodies’ cooperation to complete the requirements for starting work after the licence is issued | Thirty days from issue | 20, second (c) |
| Request for reconsideration of a refusal of formation, before the head of the Region’s or governorate commission | Fifteen days from service of the refusal; decision within seven days of registration | 20, fourth (a) |
| Objection to the National Investment Commission against a refusal by the Region’s or governorate commission | Fifteen days from the refusal; decision within fifteen days | 20, fourth (b) |
| Reconsideration of a refusal by the National Investment Commission, then objection to the Council of Ministers | Fifteen days for the request for reconsideration (decision within seven days), then fifteen days to object to the Council of Ministers | 20, fourth (c) |
| Grievance against withdrawal of the licence, before the head of the commission concerned, then before the head of the National Investment Commission | Fifteen days for each grievance; failure to reply to the first is a deemed refusal | 20, fourth (d) and (e) |
Legal basis and sources
- Investment Law No. 13 of 2006 (Official Gazette No. 4031 of 17/1/2007)
- First Amendment Law No. 2 of 2010 (Official Gazette No. 4143 of 8/2/2010)
- Second Amendment Law No. 50 of 2015 (Official Gazette No. 4393 of 4/1/2016)
Frequently asked questions
What is attached to an application for a licence?
What article 19, second, lists: the form; a financing plan accompanied by a guarantee from an accredited financial institution; previous projects and supporting bodies; the details of the project and its feasibility; and a timetable for completion.
What if the sectoral body does not reply within fifteen days?
Failure to reply is treated as approval, under article 20, second (a). If the period expires, or if the refusal is unreasoned or arbitrary, the one-stop window may recommend that the licence be granted.
How long does the Commission have to decide the application?
A period not exceeding forty-five days from the date the application is filed, under article 7(c), subject to the approval of the Council of Ministers if the value of the project exceeds two hundred and fifty million dollars.
Where is a challenge brought after a grievance against withdrawal of the licence is refused?
Paragraph (f) of article 20 opens a challenge before the court that paragraph mentions.
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.
- 02The 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.
- 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.
- 04Industrial investment land in Basrah under the Investment LawHow Law 13/2006 as amended treats title or musataha of industrial land for a project in Basrah, without listing unconfirmed plots.
- 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.