Investment in Iraq
New Iraq became a freedom society based on democracy, expression, free trade and the rule of law, Iraq will require massive infusion of capital and investment in all fields and sectors.
 
Investment in Kurdistan region
Kurdistan is a uniquely attractive place to do business in the Middle East. Kurdistan has bright, hardworking, and resourceful people, rich agricultural resources, abundant natural resources including oil, phosphate, and sulphur, a population of close to 5 million people, and a central Middle East location. Kurdistan is rapidly recovering from the effects of the war and decades of under-investment. When the recovery is over, the potential of Kurdish people and abundant resources newly free markets.
 
Investment law in Kurdistan region
Kurdistan region Government has made a special investment law of the region has opened wide horizons for international firms and private sector to inter Iraqi market and compos a real partnership with businessmen in the country.
 
 
Download the Kurdistan law investment File English
Download the Kurdistan law investment File Arabic


Investment Possibilities In Iraq & Kurdistan
IRAQI KURDISTAN OIL AND GAS *
BANKING, FINANCE & insurance *
CONSTRUCTION & Housing *
AGRICULTURE *
IRRIGATION *
HEALTHCARE *
Information Technology *
POULTRY
ENVIRONMENT
General Production
MINING AND MINERAL RESOURCES
EDUCATION *
ENERGY Utilities *
MUNICIPAL SERVICES
CULTURE AND MEDIA
DEMOCRACY
SECURITY *

 

Energy & Utilities
The energy and utilities sector in Iraq & Kurdistan - mainly comprising electricity, heating, ventilation and lighting - is critical for the rebuilding of Iraq & Kurdistan Development. The sector is in desperate need of repair, with the power sources in operation only supplying a fraction of the electricity the country needs.
To satisfy peak demand for electricity in the country, an additional 50 per cent of power needs to be generated. Years of fuel shortages and a lack of regular maintenance have severely limited the supply of dependable electricity. Looting and sabotage following the war left a number of Iraq's major transmission lines inoperable. Given these requirements, companies will have a wide range of opportunities within the power sector.
The United Nations (UN) has undertaken several projects, one of which concerns the rehabilitation of the Iraqi electricity sector. The UN Development Program (UNDP) has implemented the Electricity Network Rehabilitation Program (ENRP) to rehabilitate the networks in the northern governorates of Erbil, Dohuk and Suleimaniya across the generation, transmission, substations and distribution sectors. Through this, the UNDP has built up capacity to implement an operation of $800 million. This work has had a stabilising effect for approximately 380,000 households (approximately 2.7 million people). ENRP has so far awarded 25 contracts with a combined value of $238 million.
Iraq's Ministry of Electricity has proposed the construction of combined cycle plants, transmission line additions, the completion of thermal power stations (some of these were started under the Oil For Food Program) and the training of technicians. Major power infrastructure projects have also been incorporated within the potential scope of the US Agency for International Development's (USAID) Capital Construction contract.

Communications
Demand for communications within Iraq varies greatly, with many opportunities for companies looking to help restore Iraq's telecommunications network. A variety of products and services are needed within the sector, from wired and fixed wireless networks for voice, data and Internet services to other equipment such as cables and connections, telecom masts and antennae, public networks and repair equipment.
There is a huge need for investment within the sector, with the Ministry of Communications looking to generate significant funds to implement its regeneration program. Set up by the former Coalition Provisional Authority in 2003, Iraq's National Communications & Media Commission (NCMC) is the independent media and telecommunications regional body in Iraq and is committed to opening up the industry to competition to generate funds to aid the sector's development.
Iraq suffers from low teledensity, with less than three in every 100 Iraqi citizens enjoying the use of fixed landlines. Priority has been given to the establishment of a fully functioning telecommunications system in Iraq in order to help foster economic development. The ubiquity of the need for communication networks, be it satellite systems to aid conventional banking practice, audio visual technology to help address security issues or general telephony for ensuring construction projects are undertaken in accordance with each other, has made it one of the key issues in Iraq's development drive.
Estimations from the World Bank have set the cost of developing the sector from 2005-2007 to around $2.3 billion. With so few people enjoying fixed landlines, Iraq's population of 27 million are increasingly dependent on mobile networks, with three regional licences awarded in 2003 to set up Iraq's first mobile networks. Since then, more than two million people have signed up, making Iraq one of the world's fastest-growing mobile markets.

Agriculture & Environment  
Iraq possesses an abundant supply of land and water resources, placing the agricultural sector at the forefront of the country's economy. Agriculture constitutes 29 per cent of Iraq's gross domestic product (GDP) and 20 per cent of the country's employment.
However, over the last 20 years the sector has all but collapsed, with agriculture levels declining by more than 2.6 per cent each year from 1990. Over 50 per cent of Iraq's population is affected by insecurity over food, with over half of the country's supplies imported. A large percentage of the people are dependent on food rations.
Iraq's agriculture sector does however have a great deal of potential, with 27 per cent of the land's population suitable for cultivation and over half of this enjoying plentiful rain levels. It is estimated that less than 50 per cent of this land is currently being cultivated; this leaves room for tremendous potential growth. The lack of resource utilisation from a country once self-sufficient in agriculture can be attributed to a lack of basic farm machinery and equipment, severe water shortage, low level of technology uptake and a lack of financial incentive.
The World Bank estimated that the immediate cost of recovery for the agricultural sector will be around $3.6 billion. The capital expenditure budgeted is only $2.4 billion; this leaves a further $1.2 billion needing to be found in external funding. Additionally, research and training is also needed to enable market liberalisation, competitive levels of production and the eradication of state subsidies. 

Construction & Housing
Iraq's design and construction industry has been in a state of disrepair for more than a decade as a result of the trade sanctions imposed during the reign of the previous regime. The reconstruction and rehabilitation of Iraq has created a huge demand for building equipment and basic building materials, finishing products, engineering skills, technology, environmental awareness and maintenance systems. With international agencies bringing projects into the country and pressing for the involvement of local companies, Iraqi construction firms stand to learn much about western industry practices.
The shortage of housing and the poor quality of existing structures mean that Iraq's housing market is one of the biggest potential markets in the country, with an estimated shortage of 1.4 million housing units. Additionally, there is a desperate need for the construction of both prisons and schools. There is a great deal of confusion over land ownership, with uncertainty surrounding issues such as titles and deeds having an adverse effect on financing, mortgages and other banking functions.
Iraq has an extensive network of approximately 24,000 miles of roads and highways, the majority of which were constructed in the 1970s and 1980s and have not been sufficiently maintained since. The strain caused by both heavy military use and overlapped trucks have added to the problems, producing poor road conditions throughout the country.
Baghdad is connected to Iraq's various cities by a series of 'primary' roads - often consisting of four lanes - along with a network of military roads facilitating troop movement along the borders for the purpose of defence. There are also a number of smaller secondary roads that need paving, many of which also require expansion
There is a clear lack of road safety, due to a combination of poor road conditions, missing signage, congested areas and poor interchanges. Public sector road administration and maintenance is gradually improving but is still in need of considerable funding, with a great deal of work still needing to be done

Education
Prior to 1991, the education system in Iraq was one of the best in the region, with over 100 per cent gross enrolment rate for primary schooling and high levels of literacy, both for men and women. Iraq's higher education, particularly in scientific and technological fields, was of an international standard and staffed by high quality personnel.
As Iraq finds itself once again an active member of the international community, the renewal of the education system needs to reflect the universal norms and standards which will enable its children to fully understand democratic principles and processes while at the same time retaining their rich and multi-faceted cultural identity.
There are approximately 19,000 schools in Iraq, with around six million school pupils in total. Unfortunately, there are only 14,000 available buildings to host them, a shortage of around 5,000. As a result, schools are forced to work on double and triple shift systems with high pupil density. The Ministry of Education is embarking on a plan to build 1,000 schools per year, though with growth in enrolment amounting to 3-4 per cent per year, it is expected that it will take longer than five years to overcome the shortage.
Another problem for the education sector is the provision of textbooks and other school requirements such as desks and blackboards. The ministry is still in the process of devising a suitable plan to ensure the delivery of textbooks to pupils. Short term activities will include the development of baseline indicators to measure educational progress, procuring and distributing essential school materials and providing equipment and supplies.
Teacher training is also badly needed, many teachers have not received any sort of training for over two decades. Particular emphasis will be placed on emergency teachers or those who have been newly appointed or reappointed. The ministry has deemed this as one of its core objectives.
Cross-cultural awareness is crucial to Iraq's busines growth potential. In order to allow the cultural community to have its voice heard in the reconstruction planning process, foundations and institutions have been invited to recommend strategies for collaborating with the people of Iraq. These include the preservation of cultural heritage, protecting the environment, socially responsible investment (SRI) funds, education and diplomacy, along with multicultural industrial design, marketing, healthcare and safety practices

Bank, Finance & Insurance
A key component in rebuilding a stable infrastructure in Iraq is a well-regulated modern banking and financial sector. In October 2003, Iraq's private banks gained authorisation from the Central Bank to process international payments, remittances and foreign currency credit letters.
In January 2004 the Central Bank of Iraq (CBI) announced that it was to fully liberalise interest rates on all deposits, loans, credits, securities and other domestic financial instruments, having set the original rates itself. This represented a major step in the development of Iraq's financial system; liberalising interest rates will facilitate the modernisation and development of a financial system based on modern principles. It is estimated that the gross domestic product (GDP) of Iraq may increase by more than four times to $125 billion within a decade, spurred on by a rise in oil production and operational output.
A number of international insurance companies have stated that they will not be able to cover their business activities in Iraq, while many of those that are prepared to provide assistance for projects in the country have set their premiums very high.

Healthcare
The establishment of regular and professional healthcare is regarded by many as being the most pressing of all needs for post-war Iraq. The current healthcare system is currently in a state of ruin, suffering from a lack of equipment, depleted ranks of trained personnel - with many having fled the country - and an overall poor standard of care. The principal areas that require improvement are cardiovascular treatment capability, general hygiene products, dialysis and a lack of functional laboratories.
The healthcare system supported by Saddam Hussein was riddled with corruption, healthcare quality varying according to ethnic region. Southern regions of Iraq, mainly populated , had higher infant mortality rates than Baghdad, while health standards in the city of Kirkuk were manipulated. Companies wishing to sell pharmaceutical products to the Iraqi Ministry of Health were required to offer a 'service charge' of 10 per cent.
 
There are approximately 240 hospitals operating in Iraq, with around 1,200 primary healthcare clinics also in the country. Since March 2003, 49 hospitals and clinics have been rehabilitated, with plans for a further 131 units to also be improved. Most of the equipment at the hospitals and clinics is either broken, outdated or inadequate, with the better services generally located around Baghdad and the country's northern regions.
Iraq's Ministry of Health has a professional staff of around 100,000, over 80 per cent of which are female. A large percentage of Iraq's healthcare professionals are specialised in their respective fields, with a severe lack of primary healthcare workers. Additionally, there is a distinct lack of first-tier pharmaceuticals available.
Malnutrition is also a major issue in Iraq, particularly in the southern and central regions, where almost a third of children are sufferers. Many women in these regions suffer from Anaemia. Child mortality rates are high, through a combination of low breast-feeding levels, low birth weights, diarrhoea and respiratory infections.
The Iraqi healthcare system under the previous regime was highly centralised, tending to concentrate on curing illnesses as opposed to looking to prevent them. Decentralisation of the management system has been deemed a priority. Other targets include the establishment of a body to oversee healthcare standards and to license healthcare professionals that will adhere to those standards; the incorporation of definitive legislation, updating whatever regulations are already in place. Satisfactory training and education programs also need to be put in place, along with the necessary infrastructure to enable healthcare management, planning and finance

Information Technology
As the newly rebuilt Iraq will demand the best on offer in terms of information technology, contractors will be looking for providers of a full range of industry solutions and other e-business products, with considerable demand expected for office software, security systems, multimedia, desktop publishing (DTP), information management, mobile computing and multilingual software.
A number of attempts are being made to bring modern information technology (IT) to the people of Iraq. IT was considered a major threat to established society under the previous regime. Iraq's facilities - three teaching hospitals and a spinal cord treatment centre - have lacked modern medical information resources for decades. There are plans to bring computer-based medical resources to Iraq, providing IT equipment and training to youth and higher education centres.
Restrictions were imposed on access to computer equipment, with less than 15 per cent of the population having access to a PC. Increasing the number of computers in the country and enabling greater ease of access to the Internet throughout Iraq will be a great aid to the country's economic development.
A number of opportunities are available for Internet service providers (ISPs) to do business in Iraq. The Internet was scarcely available previously, with less than 30,000 Internet subscribers in the entire country, services courtesy of the State Company for Internet Services. There was an annual membership charge of $55 for Internet call centres, while Iraqi companies had to pay between $2,500 and $8,000 per year to install the Internet in their offices.

Oil & Gas
The utilising of Iraq's valuable oil and natural gas resources holds the key to the wealth and prosperity of the country. The oil sector dominates the Iraqi economy, with oil exports traditionally being responsible for around three quarters of the country's gross domestic product (GDP). The sector also accounts for roughly 90 per cent of the country's foreign exchange earnings.
Iraq has an estimated 112 billion barrels of potential oil resources, second only to Saudi Arabia in the entire world. Many within the petroleum sector feel that Iraq's undiscovered resources could increase the quantity of oil held to as much as 200 billion barrels. The country also has world-class natural gas resources, estimated at 110 trillion cubic feet. It is felt that this figure could increase significantly as exploration continues.
It has been estimated that with its natural resources Iraq has the potential to earn between $10 billion and $15 billion over the next few years. Estimates for oil export revenue generated in January 2004 were approximately $1.3 billion, with the re-establishment of the country's pre-1991 production capacity of 3.5 million barrels per day deemed a high economic priority. One aim is to be producing six million barrels per day by 2010; this goal has been based on the country's natural resources and estimated potential undiscovered resources. The production goal defined by the former Coalition Provisional Authority (CPA) is two million barrels per day.
In the 1990s Iraq was able to increase its oil production, though this was accomplished largely through the use of improvised maintenance techniques, randomly located spare parts and the cannibalising of the country's equipment supplies, in particular at Iraq's refineries. The infrastructure of Iraq's oil and gas industry is heavily outdated, requiring a sizeable investment to repair and upgrade. Additionally, the development of dozens of designated oil fields will require a massive investment.
 
It is felt that the Iraqi Ministry of Oil will need to improve its management of the sector in order to meet international best practices, with the possible need to retrain the industry's 70,000 workers in order to function more efficiently.

Security
Security will be a crucial factor for the prosperity of Iraq. The country is currently in the midst of a security vacuum, with post-regime change environment providing an unusual setting for the conducting of business in the country Those companies operating or planning to operate within Iraq have a number of security issues to consider, ranging from crisis management, product tampering and loss, terrorism and the risk of having to evacuate.
There is insufficient law enforcement within Iraq, despite the efforts of coalition forces. Up-to-date travel warnings for foreign nationals wishing to visit Iraq are issued regularly by the US Department of State, while US and other coalition country companies have been advised to assess the situation with care before entering the country.
Coalition forces do not have sufficient time or resources to protect all of the organisations and individuals involved in the development of Iraq. The security industry has a crucial role to play, in providing services to visitors working on a both a short term and long term basis in Iraq.
Opportunities are available for suppliers of security and emergency service infrastructure, including ambulances and emergency equipment, fire trucks and fire fighting equipment, and police motorcycles.
There is also a need for closed circuit television, control systems and burglar alarms, perimeter protection, surveillance and telecommunications equipment, IT security, identification processing, and uniforms and protective clothing. Companies dealing in crowd and access control management will also have an important role to play

Transport
The rebuilding of Iraq's automotive and transport industry will create a clear demand for auto repair equipment, tools, auto parts and accessories, with unique business opportunities available for manufacturers of heavier vehicles such as trucks and buses, RV makers, motorcycle and snowmobile manufacturers, shipbuilders and boat builders, and makers of rail equipment.
Rebuilding the severely crippled public transport system in Iraq is key to the successful reconstruction of the country. It is a highly complex undertaking that requires logistic competence in all respects, encompassing the rebuilding of public transport services for cargo and passengers, inland waterways and ports, railways, civil aviation, postal services and multi-modal facilities.
There are approximately 108 airports and airfields throughout Iraq. Baghdad, Basra, Erbil both have international airports, while Mosul and Kirkuk have domestic airports.
Iraq's airports are heavily outdated, having suffered from a lack of maintenance and shortages of parts for a number of years. Global commercial airlines have not operated in the country since the early 1990s. Although the nationally-owned Iraqi Airlines operated domestically during the former regime, its fleet is no longer in use having been partially destroyed.
Baghdad International Airport (BIA) is open and has successfully processed more than 4,500 non-military passengers since July 2003. BIA's commercial capability continues to be expanded by a number of renovations, while Basra has completed its commercial preparations. The evaluation of Mosul Airport's reconstruction requirements has also been concluded.
The airports in Iraq have, as in many of the country's sectors, suffered from a shortage of power, water, sewage and telecommunications, with new plans for the installation of a number of communications systems necessary for safe and effective air traffic control measures, enabling safe air travel.  

IRRIGATION
A key objective in helping to rebuild Iraq is the restoration of the country's water and sanitation systems, and ensuring a reliable supply of potable water to the Iraqi people. Both water and sanitation systems are designed to protect public health, although after many years of outdated operating practices and inadequate maintenance the need for rehabilitation of these facilities to their original capacities has become urgent. The need to protect public health and improve water supply to the public means that the planned rehabilitation will go further than merely restoring the system to pre-conflict conditions.
Plans and programs are being established to restore water and sanitation systems in Baghdad and other urban centers across Baghdad. In early 2004 the Ministry of Public Works announced that the average daily water service availability was one hour above pre-war levels. While the vast majority of Iraq's urban population has access to water, the quantities per capita are deemed to be insufficient. Although over half of the overall population has access to potable water, leaking pipes have contaminated those networks in many areas.
Iraq's water treatment system consists of 218 traditional water treatment plants and 1,191 mobile compact plants, the latter mainly serving rural areas. The water distribution system in Baghdad consists of nine charge dams, 18 major barrages and 275 pump stations. The equipment used in these pump stations is more than 20 years old. The plan from the ministry was for all those people with access to water to receive clean quantities by the end of 2004, with the aim for 2005 being to extend that to all Iraqi citizens.
 
 
There were also plans for the extension of sewage treatment in Iraq to 15 per cent of the country, doubling to 30 per cent by the end of 2005. It is hoped this will be achieved despite the fact that only half of Iraq's sewage plants are currently in operation. Additional problems are caused by the increase in sewage flows caused by population growth.