Kurdistan · Guide
The Kurdistan Region is the only place in Iraq where a foreigner can own an entire company outright. That sentence appears in almost every guide on the subject.
What almost none of them say is how. And the mechanism matters, because the three explanations in circulation differ by about five months of process and by an entire list of eligible sectors.
The ownership map across Iraq
| Route | Maximum foreign ownership | Where |
|---|---|---|
| Ordinary company registration | Up to 100% | Kurdistan Region |
| Ordinary company registration | 49% | Federal Iraq, since 2019 |
| Board of Investment licensed project | Up to 100% | Kurdistan Region |
| National Investment Commission licensed project | Understood to permit majority or full | Federal Iraq |
| Branch of a foreign company | Wholly foreign by nature | Both, easier in the Region |
Federal Iraq's ceiling is not an interpretation. Law No. 17 of 2019 amended Article 12 of Companies Law No. 21 of 1997 to require Iraqi persons or entities to hold at least 51% of an LLC or JSC. It reversed the position that had applied since the CPA era.
The Region did not follow. The disagreement is about why.
- 1997Companies Law No. 21 enacted, applying across Iraq
- 2004CPA Order No. 64 amends it. Full foreign ownership permitted throughout the country
- 2019Law No. 17 amends Article 12. Federal Iraq requires 51 percent Iraqi shareholding, capping foreign ownership at 49 percent
- Jan 2022The IKR Companies Law and Industry Law are amended to allow 100 percent foreign ownership in the Region, per the US State Department
Three accounts of the same rule
| Account | Source | What it would require of you |
|---|---|---|
| The IKR Companies Law was amended in January 2022 to allow foreigners to own 100% of companies incorporated in the Region. The Industry Law was amended the same month for factories | US Department of State, Investment Climate Statement 2025 | Ordinary registration. No licence |
| The Region never adopted the federal 2019 amendment and still applies Companies Law No. 21 of 1997 as amended in 2004, which permitted full foreign ownership | The legal basis the KRG's own eRegulations portal cites for all three registration procedures | Ordinary registration. No licence |
| The Kurdistan Region Investment Law permits 100% for projects licensed by the Board of Investment | Global Law Experts | A KBOI licence first, at three to six months |
The first two are different histories of the same outcome and both point at ordinary registration. The third points somewhere materially different.
The evidence that leans toward ordinary registration
The KRG publishes its registration procedures in full, including both routes for registering a foreign company, with every document, every fee and every legal reference.
- Neither procedure mentions a local partner.
- Neither mentions a maximum foreign shareholding.
- Neither requires an investment licence as a prerequisite or an attachment.
- The legal basis cited is the Companies Law and Law No. 119 of 2017, not the Investment Law.
Absence of a restriction in a procedure is not the same as a rule granting a right, and this should not be treated as settled. But it is the closest thing to a primary source available, and it is consistent with the State Department's reading.
What to do. If full ownership is the reason you are looking at the Region, get this confirmed in writing for your sector before you commit to a date or a budget. Three weeks and six months are different projects.
- 1Do you want full ownership of a trading company?Ordinary registration in the Region. No licence needed on the reading followed by the US State Department
- 2Do you want ten years of tax exemption and allocated land?Board of Investment licence. Three to six months, and only in sectors the Board is approving
- 3Is your sector commercial or residential real estate?The Board has moved away from licensing this. The licence route is effectively closed
- 4Do you already have an established foreign company?A branch is wholly foreign by nature, and Erbil does not require a government contract for one
- 5Do you need federal Iraq too?A separate federal entry. A Kurdish entity and a KBOI licence do not extend south
The Board of Investment route, and what it is actually for
The licence is not primarily an ownership device. It is an incentive package, and it is worth having for the incentives rather than for the right to own.
| What the licence gives | Detail |
|---|---|
| Tax exemption | Ten years from the start of services or actual production, on all non-customs taxes and duties |
| Customs on raw materials | Exempt for five years, in types and quantities the Board sets |
| Equipment and machinery | Exempt on import, including for expansion and modernisation |
| Land | Allocated by the Board according to the project's actual needs, in exemption from otherwise applicable laws |
| Repatriation | Full repatriation of investment and profits |
| Equality | Local and foreign investors treated equally under the law |
What the exemption is worth against the ordinary 15% rate, and where deemed profit still applies, is in Kurdistan corporate tax.
The conditions attached, which are firmer than the marketing
- Priority sectors are tourism, manufacturing and agriculture. The Board decides what it approves.
- Commercial and residential real estate has effectively been closed because those markets are oversaturated. The Board once gave more than half of all licences to housing.
- The land is tied to the licence. If the licence lapses or the project misses its milestones, the allocation can be revoked.
- Misuse is penalised at double. Sublet or use the land for another purpose without the Board's approval and the Region recovers the plot and charges twice the amount for the period concerned.
- Fines and confiscation are available to the Board where a project does not start within its time limits.
Those land conditions belong on the project plan rather than in the legal file, and they sit alongside the annual obligations in Kurdistan company compliance.
Thirty days or six months?
Both figures circulate and both are correct, which is worth explaining rather than leaving as a contradiction. The statutory period starts when your file is complete, and everything before that point is the part that takes the months.
The statutory thirty days runs from completeness, not from submission. Assembling a complete technical, legal and economic file across several ministries is the part that consumes the calendar.
What full ownership still does not give you
Owning 100% of the shares is not the same as being able to do anything with them. Four limits sit outside the ownership rule.
| Limit | Effect |
|---|---|
| Territory | A Kurdish entity is reported not to trade in federal Iraq. A KBOI licence covers Erbil, Sulaymaniyah and Duhok only |
| Banking, insurance, financial investment | Separately licensed, with their own foreign caps under the Central Bank of Iraq and the Insurance Diwan |
| Hydrocarbons | Direct foreign ownership of the resource is constitutionally restricted across Iraq |
| Real estate outside investment zones | Ownership by non-Iraqis is generally prohibited in federal Iraq. The Region permits it under Law No. 4 of 2006 |
That last row is a genuine regional advantage rather than a limit, and it is one of the few places where the Region is clearly more open than the federal regime rather than merely faster.
Control, residency and the people in your file
Ownership is one thing, control is another, and the Region attaches residency to control.
- The managing director may be a foreign national, and must reside in the Region.
- The authorized manager, legal agent and authorized employee must all reside in the Region and appear before the Registrar in person.
- Appointing a foreign national as manager of a foreign-owned company requires additional clearances, which sit on the registration critical path.
- The statutory accountant and lawyer are reported to require Iraqi nationality. You own the company, you do not choose their passports.
- Investor residence permits run three to five years where the Board confirms investor status, against one year for an ordinary employee work permit.
A structure that gives you every share and no resident officer does not register. Plan the people at the same time as the shares, not after, and see where those appointments sit in the sequence in company registration in Kurdistan.
The Region against the federal routes to 100%
| Kurdistan Region | Federal Iraq | |
|---|---|---|
| Ordinary registration | Up to 100% | 49% maximum |
| Licensed project | KBOI, 3 to 6 months | NIC licence, understood to permit full ownership |
| Tension in the licence route | None reported | Unresolved tension with the Companies Law |
| Branch | No government contract required | Government contract generally required |
| Ministry of Interior clearance | Not part of the published procedure | Mandatory for every foreign shareholder |
The federal licence route carries a complication the Region does not: practitioners describe an unresolved tension between the Investment Law's permission and the Companies Law's ceiling. The federal picture is set out in foreign ownership in Iraq.
Who this works for
- A foreign founder who wants to own the whole trading company. Ordinary registration in the Region.
- A capital project in tourism, manufacturing or agriculture. The KBOI licence earns its months.
- An established foreign supplier. A branch, which registers faster and needs no contract here.
- A property developer. Neither. The Board has closed the sector.
- A business selling into Baghdad and Basra. The Region alone is not enough.
The bottom line
The Kurdistan Region genuinely offers what federal Iraq does not, and the ownership advantage is the strongest single reason to register here.
The part to get right is which door you walk through. Ordinary registration is fast and, on the reading followed by the US State Department and by the KRG's own procedural documents, sufficient for full ownership. The Board of Investment licence is a longer, sector-restricted process that buys exemptions and land rather than the right to own.
Confirm your route in writing before you plan around it, and read the land conditions carefully if you take the licence. The penalty for using allocated land for something else is the land back and twice the money.
Frequently asked questions
Can a foreigner own 100% of a company in the Kurdistan Region?
Yes. It is the only route to full foreign ownership in Iraq, where the federal ceiling has been 49% since Law No. 17 of 2019 amended Article 12 of the Companies Law.
Do I need an investment licence to own 100%?
The US State Department attributes full ownership to a January 2022 amendment to the IKR Companies Law, at registration level, and the KRG's own registration procedures cite the Companies Law rather than the Investment Law and mention no ownership cap. Some practitioners tie full ownership to a Board of Investment licence. Confirm for your sector before committing.
How long does a Board of Investment licence take?
The law gives the Board thirty days to decide from the point at which the technical, legal and economic conditions are fulfilled. The US State Department puts the practical duration of the whole process at three to six months, because assembling a complete file across several ministries is not counted in the statutory period.
What does the investment licence actually give me?
Ten years of exemption from all non-customs taxes and duties from the start of services or production, five years of customs exemption on raw materials, import exemption on equipment, allocated land, and full repatriation of investment and profits.
Can I get a licence for a real estate project?
In practice, no. The Board has moved away from approving licences in commercial and residential real estate because those markets are oversaturated, and now prioritises tourism, manufacturing and agriculture.
What happens if I use the allocated land for something else?
The Board recovers the plot, or the part misused, and the investor pays twice the amount for the period of the improper sublease or use. The Board can also fine and confiscate where a project does not start within its time limits.
Do I need a local partner in the Kurdistan Region?
No. Neither of the two official foreign company registration procedures published by the KRG mentions a local partner or an ownership cap, unlike federal Iraq where an Iraqi shareholder must hold at least 51%.
Can a non-resident be the director of a Kurdistan company?
The managing director may be a foreign national but must reside in the Region, as must the authorized manager, legal agent and authorized employee, who appear before the Registrar in person. Appointing a foreign manager of a foreign-owned company requires additional clearances.
Can foreigners own land in the Kurdistan Region?
Yes, under Investment Law No. 4 of 2006, which is a genuine regional advantage. In federal Iraq ownership by non-Iraqis is generally prohibited outside designated investment zones.
Does full ownership in the Region let me trade in federal Iraq?
No. Regional sources report that a Kurdish entity does not operate in federal Iraq, and a Board of Investment licence is valid in Erbil, Sulaymaniyah and Duhok only. Serving both markets means two entries.
Sources
- US Department of State, Iraq Investment Climate Statement 2025: the January 2022 IKR Companies Law and Industry Law amendments, and KBOI licensing timelines
- Kurdistan Region Investment Law No. 4 of 2006: exemptions, land allocation and the penalty for misuse
- Law No. 17 of 2019 amending Article 12 of Companies Law No. 21 of 1997: the federal 49% ceiling
- KRG eRegulations portal: the foreign company registration procedures and their legal basis
The federal 49% ceiling follows Law No. 17 of 2019 amending Article 12 of Companies Law No. 21 of 1997. The mechanism by which the Kurdistan Region permits full foreign ownership is stated three different ways by sources that are each credible, and all three appear below rather than one being selected; the text of the January 2022 amendment to the IKR Companies Law was not obtainable at the time of writing, and gov.krd blocks automated access. Exemption periods, land rules and the doubling penalty come from Kurdistan Region Investment Law No. 4 of 2006 as summarised by the Board of Investment. The thirty day decision period and the three to six month practical timeline are not in conflict and the difference is explained below. Sector restrictions on banking, insurance, hydrocarbons and real estate are federal and their application inside the Region should be confirmed sector by sector. This is not legal or tax advice.