# Foreign branch or LLC in Iraq? How to choose

Author: Othman Al-Juboori

اقرأ بالعربية

Foreign branch or LLC in Iraq? How to choose

Searches for company registration in Iraq often reach one early question: foreign branch or Iraqi LLC? This article orders decision criteria before any capital figure and before translating a pack. We do not state a limited-company minimum capital here; confirm the figure in force at filing.

Othman Al-Juboori, Iraqi lawyer, expert in Iraqi labour law, Member of the Iraqi Bar AssociationIraqi lawyer, expert in Iraqi labour law

Page: company registration
1) Start with activity and parties, not paperwork
Describe the activity in one sentence. Who contracts in Iraq, the parent directly or a local entity? Who signs contracts and guarantees? Do you need a separate Iraqi legal person (an LLC) or representation of the parent (a branch)?
2) Branch path: parent eligibility first
Foreign Company Branches Regulation No. 2 of 2017, as amended: the branch represents the foreign company in Iraq (Art. 1). The parent must be at least one year old (Art. 2 as amended). Art. 2 documents (articles of incorporation, a valid registration certificate, the board or managing-director list and authorised signatories, the resident branch manager's authorisation, and the final accounts for the last or previous financial year) are filed translated into Arabic and authenticated in the country of incorporation. The registration licence is not an operating permit for activities that need a separate licence (Art. 4). The branch is managed by a manager resident in Iraq (Art. 7), and the branch has the annual duties the Regulation sets.
3) LLC path: a separate Iraqi entity
Companies Law No. 21 of 1997, as amended, frames the limited company as an Iraqi legal person from the registration certificate. Capital is in dinars. Art. 28 sets a minimum. Confirm the figure in force at filing. No figure is stated here. Design the partners, the manager and their authorities before filing. After the certificate, plan tax and social security as an employing establishment. Do not confuse Registrar registration with clearance certificates.
4) Quick decision table

Question Answer Initial lean
Parent younger than one year? Yes LLC, or wait, not a branch
Need contracts in the parent's name via representation? Yes Branch after Art. 2
Need a separate Iraqi entity for local partners or finance? Yes LLC
Activity needs a sector licence? Yes Either path still needs that licence separately
Hiring from day one? Yes Plan social security and permits with registration
5) Staffing and social security after either path
Work fee: IQD 2,000,000 once for each foreign worker entering Iraq (Law 18/2023, Art. 106/First). The permit is valid for one year and is renewed annually (Instructions 1/2026, Art. 5). Social security (Law 18/2023): employer 12%, or 25% for private and mixed-sector employers whose profits come from selling Iraqi oil and hydrocarbons; worker 5%; state 8%. The end-of-service gratuity is due in all cases, including resignation. See social security for employers.
6) What to bring to the first meeting
Parent name, country and incorporation date; activity description; branch or LLC preference and the reasons; available documents; manager or partner candidates; draft premises. We serve clients in Baghdad, the Kurdistan Region (Erbil, Sulaymaniyah and Duhok) and Basra from our Baghdad office.
Closing a branch later is a separate process: Closing a foreign company branch in Iraq.
About Al-Taswia Legal Services Company
Founded in 2018 in Baghdad; team of 15 lawyers. Lead specialty: Iraqi labour law. Also: civil law, banking law, criminal cases, company registration, investment, debt collection, real estate and property management, review of Iraqi legislation, and Arabic–English legal translation. We serve clients in Baghdad, the Kurdistan Region (Erbil, Sulaymaniyah and Duhok) and Basra from our Baghdad office. Office: Al-Yarmouk, Four Streets, next to Soya restaurant, Baghdad. Hours: Sat–Thu 5:00–9:00 PM. +964 771 100 2200 · info@al-taswia.com · www.al-taswia.com
This article is general information, not legal advice.

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