Iraq is Open For Business The Era of Transformation: Reforms and Investment during Iraq Reconstruction Phase Kuwait City, Kuwait. February 2018

PRIVATE SECTOR LED GROWTH: KEY REFORM PILLARS Reforming investment policies: These reforms focused on attracting investment, facilitating investor entry, and improving investor retention. Reforming the regulation of business operations: Reforming the regulatory framework and practices around business operations, including registration of businesses and property and cross-border trade. Reforms focused on the public-private partnership framework and reforms related to state-owned enterprises and their role in the economy. Governance reforms: These reforms are focused on the broader governance context for investment and government-to-business relations in Iraq, including procurement, anti- corruption, and the creation of high-level ownership of reform delivery and change management.

INVESTMENT CLIMATE REFORMS ACROSS THE INVESTMENT STAGES Investment Entry & Establishment Investment Protection & Expansion Investor Incentives

INVESTMENT CLIMATE & COMPETITIVENESS: THE FIRST WAVE OF REFORMS Creation of the High-level Committee for Investment and Construction: Recognizing the critical importance of foreign direct investment (FDI) for Iraq, on May 16, 2017 the Prime Minister of Iraq (PM) established the inter- ministerial “High-Level Committee for Investment and Construction”. Creation of the Economic Reform Unit in the Prime Minister’s Office: Recognizing the critical importance of economic reform, an Economic Reform Unit (ERU) has been established within the Iraqi Prime Minister’s Office (PMO). It has been established to help set overarching economic and commercial policies to ease doing business in Iraq, attract FDI, and optimize the role of FDI in the country’s overall investment and socioeconomic development strategy. Adopted and published National Investment Policy Statement reflecting a coherent and conducive investment policy vision to confirm GoI commitment to investor growth and protection. Enhance the National Investment Commission One-Stop-Shop for investors by implementing a sector-specific “fast track” approach to expedite the process of Investment Licensing. In addition to strengthening NIC capacity to for the attraction, retention, and growth of domestic and foreign investment within priority sectors and specific investment projects. GoI Implement a Specialized Aftercare Services (SAS) program as a mechanism to help identify and prevent investors’ grievances at an earlier stage. Enactment of a comprehensive incentives package both fiscal and non fiscal with special focus on high potential economic sectors.

INVESTMENT CLIMATE & COMPETITIVENESS: THE FIRST WAVE OF REFORMS Implemented an Action for streamlining the Investor visa issuance procedures, and establish a clear and distinct “investor visa” category. NIC is authorized to issue entry visa to the foreign investor within a period not exceeding 48 hours from the date of submitting of the application. Enactment of best practice PPP legislation that addresses key requirements for a successful development of a PPP market. Investor Protection & Dispute Settlement: GoI has undertaken transformational reforms to improve the domestic arbitration regime. GoI is currently adopting modern Arbitration Law based on best international standards. Accession to the NY Convention: GoI is in the process of implementing an adequate international standard mechanisms for recognizing and enforcing foreign arbitral awards by finalizing its accession to the NY Convention. Public procurement reforms: three critical tools to ensure the effective and efficient use of public resources: (1) National Bidding Documents; (2) Sector Bidding Document; and (3) a National Implementation Manual (NIM).  

INVESTMENT CLIMATE & COMPETITIVENESS: THE SECOND WAVE OF REFORMS Amend the National Investment Policy to include and strengthen the concept of SEZs. This includes the development of a conducive SEZ legal and regulatory framework and the related institutional structure. Reduce number of procedures, cost and time to register a company Reduce procedures, cost and time to transfer property Reduce the number of documents and time to trade across boarders To amend the to permit investors to freely and directly hire qualified national and foreign labor for projects licensed under the NIL. Title of Presentation

NATIONAL INVESTMENT LAW NO. (13) OF 2006 INVESTMENT ENTRY & ESTABLISHMENT: NATIONAL INVESTMENT LAW NO. (13) OF 2006 NATIONAL INVESTMENT LAW NO. (13) OF 2006 Investment license is an entitlement of the investors and may not be withdrawn arbitrarily. Such withdrawal requires a series of procedures and legal warnings and substantiation of a violation committed by the investor (Article 28). No discrimination among the foreign investors or between the foreign investor and the local investors in terms of rights and duties (Article 1.9 and 1.10). The investor shall have the right to take out the capital brought into Iraq and its proceeds (Article 11/1). Joint guidelines have been issued by NIC and CBI regulating this guarantee without the investor incurs any burden for this transfer. Expatriate personnel are entitled to transfer their salaries and remuneration gained from working in an investment project in Iraq. (Article 12/Fourth). .

INVESTMENT PROTECTION AND EXPANSION . NATIONAL INVESTMENT LAW NO. (13) OF 2006 Any amendment to the Law shall not have any retroactive affect regarding the guarantees, exemptions, and rights. Investment project may not be expropriated or Nationalized save by a final judicial decision (Article 12/iii/a). Investment project may not be expropriated except for the public interest and with fair compensation (Article 12/iii/b).

INVESTMENT ENTRY & ESTABLISHMENT: RIGHTS UNDER NVESTMENT RELATED LAWS NATIONAL INVESTMENT LAW NO. (13) OF 2006 The right to establish a local company with foreign capital and be wholly owned by the foreign investor. (Companies Act No. 21 of 1997, as amended) The right of foreign investors to obtain residence in Iraq for a period of three years, renewable for another period. (Law No. 76 of 2017) Guidelines for opening Escrow account prepared by NIC and CBI to manage sales proceeds of the residential projects. Foreign investors are permitted to invest in the service sector and enter into partnerships with the public sector (Public budget law of 2016 and 2017. Another similar text is also available in the 2018 draft budget). Title of Presentation

NATIONAL INVESTMENT LAW NO. (13) OF 2006 INVESTOR INCENTIVES NATIONAL INVESTMENT LAW NO. (13) OF 2006 Exemption from taxes and customs duties throughout the project implementation period (Article 17). Exemption from income tax for 10 years from the date of the commercial operation (Article 15). The right to own lands for housing projects at an allowance set at 10% of the value of the land (Article 10). The right to obtain an investment license for up to 50 years validity and renewable for another 50 years for commercial, industrial and other projects. The right to use foreign labor and up to 50% of the total labor required to operate the project in the event that it is not available locally. The right to sell the investment project if the completion rate exceeds 40% of the project (Article 10). The right to obtain local and foreign loans with the project assets as collateral once the completion rate reaches 25% (Article 9.8). The right to open a branch for the company in Iraq. .

INVESTOR PROTECTION: BILATERAL INVESTMENT PROTECTION TREATIE Iraq has signed a number of BITs, and all of them include general provisions on providing all facilities and guarantees that attract foreign investors to invest in Iraq. In addition to the guarantees already provided for in the NIL, these BITs include a provision on the right of the investor to submit a dispute it may have with a public agency to international arbitration, in an attempt to create enabling legal environment for the investor who may not be aware of the Iraqi legal framework. These BITs were signed with a number of countries, including with Kuwait, Kuwait, Jordan, Japan, Germany, Italy and France. Multilateral Investment Treaties: Iraq's accession to the Washington Agreement on Settlement of Investment Disputes (ICSID) of 1965 as a means of resolving disputes in a number of BITs and investment contracts for some strategic investment projects. Work is ongoing for Iraq accession to 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards to ensure the proper enforcement of arbitral awards in accordance with the terms of the Convention. The aim is to offer a guarantee to investors with international arbitration awards in their favor that their awards are enforceable in Iraq. Title of Presentation

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