(Last updated: 20 Jan 2011)

Business etiquette

Business tips

Knowing a few simple Arabic words and phrases such as 'Marhaba salam alekom' (hello), 'Shukran' (thank you), 'Men fadlak' (please), 'Keif Halac' (how are you) is always helpful.

When referring to people, they are generally referred to in the following way. For example, Yusef bin Ali translates to ‘Yusef the son of Ali’ (note that bin is the same as ibn). The family name is often omitted.

If you are proposing to meet with Iraqi businessmen it is normal for discussions to occur over lunch or dinner. You should initiate the invitation as an indication of your interest in developing business relations.

Please also note: Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. For more information, go to the Attorney General's Department on foreign bribery.

Tariffs and non-tariff barriers

The information provided in this section does not constitute legal advice, and it is not intended, or should it be used, as a substitute for specific legal advice from qualified legal counsel. Austrade does not warrant the accuracy of the information, and urges those intending to do business in Iraq to consult with qualified legal counsel.

Tariff

Commercial regulations

The United Nations lifted sanctions against Iraq in May 2003. The Australian Government subsequently implemented regulations to remove Australia’s domestic restrictions on trade with Iraq and normal trade patterns have resumed Iraq (Reconstruction and Repeal of Sanctions) Regulations. However, the embargo on the trading of arms and related material with Iraq remains in place.

Customs requirements and import tariffs

All goods imported under the Iraq Reconstruction Programme are tax exempted. Including goods for the United Nations, World Bank, multilateral agencies, coalition forces, reconstruction contractors, NGOs, international organisations, diplomats and Coalition governments; It is important to request for a levy exemption letter if you are working with one of the above bodies.
The Iraqi Embassy in Canberra is fully functioning and would be able to legalise any import-related documents.

Non-tariff barriers

Non-tariff barriers include inadequate infrastructure and trade capacity, significant customs processing delays, security considerations and some specific import and export bans.

Product certification, labelling and packaging

Cargo moving to Iraq should be well stabilised, secured and preferably have the contents fully concealed.

Marking on boxes or crates should be directly on the box or crates in ink or paint rather than on removable tags or labels. Country of origin should be clearly marked and indicated.

The date of manufacture and expiration of canned and preserved food items has to be embossed or printed on the packaging.

The contents of pharmaceutical products must be clearly printed on the packaging.

Pesticide labelling must be in Arabic and English.

Local business people may only import products that comply with the labelling and marking requirements issued by the Department of Standards and Specifications or the responsible government ministry.

Methods of quoting and payment

Quotations may be C&F US dollars or Euro.

Some importers may request CIF Um Qasar quotations.

Payment is usually by irrevocable letter of credit.

Some importers may request deferred payment terms on L/C's from three to six months. You may work with Iraqi companies through third country banks such as; Jordan or UAE.

Setting up in Iraq

Setting up a business in Iraq involves several steps and needs to be undertaken by an authorised lawyer. The following steps provide a guide to establishing a Private Limited Liability Company. Please ensure you consult a lawyer as requirements can change quickly.

Step 1 – Search for a company name; obtain a name reservation letter from the Baghdad Chamber of Commerce
Step 2 – Hire a lawyer to draft articles of association
Step 3 – Deposit initial capital at commercial bank and obtain confirmation receipt
Step 4 – File for registration at the Commercial Registry
Step 5 – Advertise incorporation notice in the newspaper
Step 6 – Make a company seal
Step 7 – Obtain registration certificate
Step 8 – Report to tax authority to establish tax registration
Step 9 – Legalise accounting books
Step 10 – Register employees for social security
Step 11 – Apply for a trade license

Austrade can help you through providing services including those listed below.

Market analysis and research:

• Strategic advice and realistic market intelligence
• Market risk analysis
• Coaching on the process of supply to the World Bank, UN agencies and the US contracting office

In-market support:

• Excellent links with key Iraqi stakeholders, government and ministries
• Experienced advisory with key local contacts
• Identify the right potential partner/agent
• Keep you updated with leads and opportunities
• Network you with active regional players in Iraq
• Qualify any local contact
• Suggest secure method of payments and commercial conditions

Taxation

In 2004 and subsequent years, individual and corporate income tax rates is 15 per cent.

For additional tax information, please visit -www.export.gov/iraq/bus_climate/businessguide_current.html#com_env

Tax exemption for approved projects

Austrade works in conjunction with the Australian Taxation Office ('ATO') to administer the income tax exemption available under section 23AF of the Income Tax Assessment Act 1936 ('Tax Act').

Section 23AF should assist the international competitiveness of Australian companies and governmental organisations competing to win international tenders. Further information is available.

Intellectual property protection

Brands, trademarks or copyrights are theoretically protected by the Iraq Intellectual Property Rights Law, however, the Iraq Governments ability to enforce IPR protection remains weak.

Banking and finance

The Iraq Ministry of Finance approves budgets, manages debt, and establishes economic policy. It pays Iraq's 1.8 million pensioners and 1.4 million state employees, and collects taxes and customs revenues.

The banking system in Iraq has three different structures: central, state-owned and private. Below is a list of the banks operating in Iraq:

Central Bank:

• Central Bank of Iraq

State-owned banks:

• Rafidain Bank
• Rasheed Bank
• Industrial Bank of Iraq
• Agricultural Cooperative Bank of Iraq
• Real Estate Bank of Iraq
• Iraq Bank
• Trade Bank of Iraq

Private banks:

• Al Baraka for Investment & Financing Bank
• Al-Warka Investment Bank
• Babylon Bank
• Bank of Baghdad
• Basrah International Bank for Investment
• Commercial Bank of Iraq
• Credit Bank of Iraq
• Dar Es Salaam Investment Bank
• Dijla and Furat Bank
• Economic Bank
• Gulf Commercial Bank
• Industrial Union Investment Bank
• Investment Bank of Iraq
• Iraqi Islamic Bank
• Iraqi Middle East Investment Bank
• Mosul Bank
• National Islamic Bank of Iraq
• North Bank
• Sumer Bank
• United Investment Bank