LEGAL CONSULTANTS TELEPHONE: +964-66-22356-65 E-MAIL: erbil@amereller.com
60th Street, Concept Tower, 4th Floor, Erbil, Iraqi Kurdistan
Doing Business in Kurdistan Regional Government (“KRG”)
i.
Which kind of corporations can be set up in KRG
The two most common forms of corporate presence in KRG are the branch office and the subsidiary limited liability company (“LLC”). The decision on whether to open a branch office or to establish an LLC in KRG is subject to a variety of factors, which will need to be evaluated on the basis of the Company’s commercial intentions in KRG including the taxation effects. The costs related to opening a branch office or establishing an LLC in KRG are very comparable, save for the necessary payment of the LLC's minimum capital of ID 1,000,000.00, which currently equals approximately USD 860.00. Please note that the commercial activity of a branch is always limited to the registered activity of the foreign company, whereas an LLC, as a separate legal entity, is more flexible and can engage in a wider scope of activities.
ii.
Which are the requisite necessary for the setting up of the relevant corporations in KRG
For establishing an LLC in KRG the following documents are required: a. Power of Attorney (“PoA”) from each founder authorizing lawyers in KRG to undertake all registration procedures on their behalf. The PoA must be notarized and legalized up to the Iraqi consulate at the place of issuance. b. Letter of intent to register an LLC in Erbil from each founder. The letter must be notarized and legalized up to the Iraqi consulate at the place of issuance. c. Shareholder or Board resolution from each founder which is a legal entity resolving on the establishment of an LLC in KRG. The resolution must be notarized and legalized up to the Iraqi consulate at the place of issuance. d. The Articles of Association of founders who are legal entities, certified and legalized up to the Iraqi consulate at the place of issuance of the Articles. e. The relevant license/certificate of establishment or other equivalent of a certificate of establishment for founders who are legal entities, certified and legalized up to the Iraqi consulate at the place of issuance. f. Copy of the passport of the individual who will be appointed as the Managing Director of the LLC. Please note that if the proposed Managing Director is a foreigner, a valid residency permit will be required at the time of registration. g. Letter addressed to the Chamber of Commerce from the parent company authorizing the use of its name (if applicable); h. Copy of the lease contract for the LLCs business premises in Iraq, stamped by a certified Real Estate Office or the Real Estate Tax Office. i. Letter from a local bank proving the deposit of 100% of the capital (the minimum capital for the LLC is 1,000,000.00 Iraqi Dinars). To be procured by Mena Associates.
j. Memorandum of Association (called Contract/Statement of Establishment in KRG) according to a model provided by us and completed by the founders. The MoA will be signed by our local lawyers pursuant to the POA. In order to open Branch Office, the following documents will need to be provided:
a.
b.
c.
d.
e.
f. b.
a. c.
Power of Attorney (PoA) from the Parent Company authorizing lawyers in KRG to undertake the registration procedures. The PoA should be notarized and legalized up to the Iraqi consulate at the place of issuance. Letter of intent to register a Branch Office in Erbil signed by representative of Parent Company. The letter should be notarized and legalized up to the Iraqi consulate at the place of issuance. Letter of Undertaking by the Parent Company to assume all liabilities and obligations of the Branch Office. The letter should be notarized and legalized up to the Iraqi consulate at the place of issuance. The relevant license/certificate of establishment or other equivalent of a certificate of establishment of the Parent Company certified by the competent authority and legalized up to the Iraqi consulate at the place of issuance. The Articles of Association of the Parent Company certified by the competent authority and legalized up to the Iraqi consulate at the place of issuance of the Articles. Last audited financial statements of the Parent Company, certified and legalized up to the Iraqi consulate at the place of issuance. Copy of the passport of the individual who will be Branch Manager. Please note that if the proposed Branch Manager is a foreigner, a valid residency permit will be required at the time of registration. Letter of discharge from the General Tax office (this only applies to foreign companies with existing business in Iraq). Copy of the lease contract for the Branch Office's business premises in Iraq, stamped by a certified Real Estate Office or the Real Estate Tax Office. We can provide you with virtual office space at extra cost, if so required.
iii.
How long does it take to set up a new corporations and which are the approximate costs involved?
The registration of an LLC or Branch Office usually takes up to 2-‐3 weeks from the date on which the necessary documents are received by us duly notarized and legalized. The services for the establishment of an entity in KRG up to the issuance of the certificate are usually charged $12000 -‐ $14000 US Dollars flat fee inclusive of administrative costs and expenses related to the registration, including registration fees, appointment of local auditor and legal counsel and their fees and other administrative costs. Translations are usually at cost which is estimated at $35-‐$50/page depending on language, volume and complexity of the documents. All documents received in English or other foreign language will have to be translated to Arabic or Kurdish for submission to the authorities.
iv.
Is there a legal framework which favors (foreign) investments, such as public incentives, young and women entrepreneurship, etc
The 2006 investment Law is one of the most important factors in the rapid economic growth that has been achieved over the last decade. The law states that foreign investors can repatriate their profits in full, are equally treated under the law, are entitled to all the capital of any project, and enjoy the same rights as local investors to purchase and own land. In addition to these protections for foreign investors, the law establishes additional tax incentives and benefits to encourage foreign investment.
v.
Are there bilateral agreements in place between Italy and your KRG (eg. Taxation)
There are no agreements between the Italy and KRG.