A foreign company that wants to operate in Iraq has two main routes: register a branch of the existing foreign company, or incorporate a separate Iraqi company — usually a limited liability company — with foreign shareholding. Both give you a lawful presence. They are not interchangeable, and the right answer depends on what you actually intend to do in Iraq.
Choosing badly is not a small mistake. It affects who bears liability, which contracts you can sign, how you are taxed, and how easily you can exit.
What a branch actually is
A branch is not a separate legal person. It is the same foreign company, registered to operate in Iraq. The parent remains directly liable for what the branch does, and the branch's activities are limited to the scope for which it was registered.
Branch registration is administered through the Companies Registrar and is subject to conditions that do not apply to an ordinary Iraqi incorporation. Among the recurring practical requirements is that the foreign parent must be an established, operating company rather than a newly formed shell — Iraqi practice looks for a genuine trading history before admitting a branch.
Branches are the natural fit where a foreign contractor has been awarded a specific project or contract in Iraq and needs a registered presence to perform it, invoice for it, and employ people for it.
What an Iraqi LLC gives you instead
Incorporating an Iraqi limited liability company creates a new legal person under Iraqi law. It contracts in its own name, holds its own assets, and — this is the point — confines liability to the company rather than reaching back to the foreign parent.
It is generally the better structure where the intention is a durable commercial presence: an ongoing business, local staff, a growing customer base, local suppliers, and the expectation of bidding for work over time rather than performing one identified contract.
It also tends to be easier to deal with locally. Iraqi counterparties, banks and public bodies are thoroughly familiar with the LLC, and it presents fewer unfamiliar questions than a branch of a foreign entity.
The questions that actually decide it
Is the work one identified project, or an open-ended business? One defined contract points towards a branch. An ongoing business points towards an Iraqi company.
How much liability separation do you need? A branch offers none — the parent is on the hook. If the work carries real execution risk, that matters a great deal.
Who will you be contracting with? Some tenders and public contracts specify what kind of registered entity may bid. Check the requirement before you choose the structure, not after.
What is the exit? Closing an Iraqi company and deregistering a branch are different procedures with different consequences. It is worth understanding both before entering.
Does the sector restrict foreign participation? Some activities are restricted or reserved. The activity you intend to carry on can narrow the options on its own.
Documents and authentication: start early
Whichever route you take, the foreign company's own documents will have to be presented to Iraqi authorities in a form they accept. In practice that means the parent's constitutional and registration documents, a board or shareholder resolution authorising the Iraqi presence, and a power of attorney for whoever will act locally.
Those documents will generally need certified translation by a translator licensed for the purpose and legalisation through the consular chain before they are acceptable in Iraq.
This is the step that most reliably derails timetables. It is administrative rather than legal, it sits outside your control, and it cannot be accelerated once the rest of the file is sitting ready. Begin it before anything else.
Investment incentives are a separate question
Iraq operates an investment framework administered through its national and provincial investment commissions, under which qualifying projects can obtain an investment licence carrying benefits not available to an ordinary registration.
This is a distinct track from company registration and it does not replace it. Whether a project qualifies depends on the sector and the nature of the investment. If your project might qualify, assess it before you register, because the structure you choose can affect eligibility.
Common questions
Can a branch bid for public tenders? Sometimes — it depends on the tender conditions, which frequently specify the form of registration required. Read the conditions before choosing.
Can we start with a branch and convert to an LLC later? These are not convertible into one another. You would register the new entity and wind down the old presence, which costs time and money. Choose deliberately.
Do we need an Iraqi partner? Not as a general rule for an LLC, though sector-specific restrictions can change the answer for particular activities.
Does a branch pay tax in Iraq? A registered branch generates Iraqi tax obligations on its Iraqi activity, and both structures require tax registration. Tax treatment should be modelled alongside the structuring decision, not after it.
Practical takeaway
Match the structure to the commercial reality. A single defined contract with a clear end date usually points to a branch. A business you intend to build in Iraq points to an Iraqi company, and the liability separation alone often justifies it.
Then, whichever you choose, start the document authentication immediately — it is the long pole in every one of these timetables.
Talk to us
We advise foreign companies entering the Iraqi market on structure, register branches and Iraqi companies, manage the authentication of foreign corporate documents, and draft the local contracts that follow.
If your company is planning to operate in Iraq, contact our office to discuss the options, or read about our corporate services and commercial and business law practice.