# Commercial Agency in Iraq: Licence and Agency Contract Registration under Law No. 79 of 2017

Author: Othman Al-Juboori

*Short answer:* To obtain and operate a commercial agency in Iraq, a licence issued by the Companies Registrar at the Ministry of Trade is required (Art. 5); the commercial agency contract is registered with the Registrar after being authenticated as the law requires (Art. 10); and the licence is renewed every year within the first sixty days of the year (Art. 6).
*Official source:* Commercial Agency Regulation Law No. 79 of 2017, Official Gazette (Al-Waqa'i Al-Iraqiya) No. 4469, 13 November 2017 (Arts. 1–24).
*Author:* Othman Al-Juboori, Founder and Managing Director, Member of the Iraqi Bar Association
Commercial agencies in Iraq are governed by the Commercial Agency Regulation Law No. 79 of 2017, published in the Official Gazette (Al-Waqa'i Al-Iraqiya) No. 4469 on 13 November 2017. This page sets out its main provisions as stated in the text. Commercial agencies are also among the legal services of Al-Taswia Legal Services Company, set out in the section "Commercial agencies among the services of Al-Taswia" below.
It matters to foreign companies that wish to sell goods or services in Iraq through an agent or distributor, to Iraqi persons and companies acting as agent or distributor for a foreign company, and to anyone who wants to know how to obtain a commercial agency in Iraq and register the agency contract.
How to obtain a commercial agency in Iraq: the steps as stated in Law No. 79 of 2017
Step | What the text says | Article
1. Licence | Application to the Companies Registrar with supporting documents; decided within ten working days | 4, 5
2. Contract registration | Application by the agent after the contract is authenticated as the law requires | 10
3. Renewal | Every year within the first sixty days of the year | 6
4. Agent's book | Record of profit or commission, shown to the Registrar and submitted to the General Commission for Taxes | 11
5. Cancellation | Loss of a licence condition or non-renewal; contract registration has its own cancellation cases | 7(1), 8
What is a commercial agency
A commercial agency is a contract under which a natural or legal person is entrusted with selling or distributing goods or products, or providing services, inside Iraq as agent, distributor or franchisee of the principal outside Iraq, for a profit or commission, and who performs after-sales services, maintenance and the supply of spare parts for the products and goods it markets (Art. 1(3)).
The commercial agent is the Iraqi natural or legal person who performs any of the acts of a commercial agency; the principal is the foreign natural or legal person from outside Iraq for whose benefit the commercial agent works (Art. 1(4) and (5)).
The licence is the certificate the Registrar issues to the commercial agent, and the Registrar is the Registrar of Companies (Art. 1(2) and (6)).
The Law aims to regulate commercial agency work and to regulate the dealings of State departments and of the public, mixed and private sectors with foreign natural and legal persons (Art. 2). It pursues these aims through obtaining a licence to carry on commercial agency work, registering commercial agencies in a special register, and monitoring the activity of commercial agents (Art. 3).
The Ministry of Trade and commercial agency
The applicant submits the licence application to the Registrar of Companies, who issues the licence (Art. 1(2) and (6) and Art. 5). The agent presents the agent's ledger to the Registrar of Companies' department, commercial agencies section (Art. 11). The Companies Registration Department is one of the departments of the Ministry of Trade, and its official website (tasjeel.mot.gov.iq) states that its tasks include registering commercial agencies and granting licences to commercial agents.
The Minister in the Law is the Minister of Trade (Art. 1(1)); a refusal or a cancellation of the licence may be the subject of a grievance before the Minister (Arts. 5(2)(b) and 7(2)).
The entry of a foreign company's goods or services for the purpose of trading is prevented except through its licensed commercial agent, by the Ministry of Trade (the Iraqi General Company for Trade Fairs and Services) and the Ministry of Finance (the General Commission for Customs) (Art. 13).
The Minister may issue instructions to facilitate implementation of the Law (Art. 23), and the conditions for registering an agency contract are set by instructions issued by the Minister (Art. 14).
The commercial agency contract and the distribution agreement
"Distributor" appears in the definition of a commercial agency: a contract under which a person is entrusted with selling or distributing goods or products, or providing services, inside Iraq as agent, distributor or franchisee of the principal outside Iraq, for a profit or commission (Art. 1(3)). The principal is the foreign person from outside Iraq (Art. 1(5)).
The Law exempts only licensed scientific offices for the promotion of medicines (Art. 21). The Registrar may decide, on the basis of legal evidence, that any commercial activity carried on in Iraq by a person is to be treated as a commercial agency subject to the Law (Art. 9).
The Law ties the prevention of entry of a foreign company's goods to its licensed commercial agent "within the agent's area of activity in Iraq" (Art. 13), and does not define what that area means.
The Instructions to Facilitate Implementation of the Law, No. 1 of 2020, state that a commercial agency includes the commercial agency, the commission agency, the distributor agency and the franchise agency (their Art. 1), and define the distributor agency as a contract under which the foreign principal authorises the Iraqi distributor to buy the goods for the distributor's own account, ownership passing to the distributor, who then resells them on the distributor's own terms for a profit and provides after-sales services (their Art. 1(3)).
Conditions for a commercial agency licence
An applicant for the licence must be (Art. 4(1)):
Iraqi, with full legal capacity.
Not convicted of a felony or of a misdemeanour involving dishonour.
The holder of a commercial office in Iraq for carrying on the work.
Affiliated to a chamber of commerce in Iraq, and the holder of a trade name.
Not a public employee or a person charged with a public service.
The holder of at least one commercial agency contract authenticated in accordance with the law.
Where the applicant is a company, then in addition to the conditions on the commercial office, the chamber of commerce, the trade name and the agency contract, it must be an Iraqi company whose capital is wholly owned by Iraqis, and its authorised manager must meet the conditions of Iraqi nationality, full legal capacity, no conviction for a felony or a misdemeanour involving dishonour, and no public employment (Art. 4(2)).
Applying for the licence
The applicant submits the application to the Registrar of Companies together with the documents proving that the conditions are met (Art. 5(1)).
The Registrar decides on the application within ten working days of its registration as received at the Registrar's office; when the period ends, an application that meets the conditions of the Law is deemed accepted. An express refusal must be reasoned (Art. 5(2)(a)).
A refusal may be the subject of a grievance before the Minister (the Minister of Trade) within thirty days from the day after the applicant is notified. The Minister decides within ten working days; when the period ends the grievance is deemed rejected, and the Minister's decision, express or deemed, may be challenged before the Administrative Court (Art. 5(2)(b) and (c)).
The Registrar issues the licence when the conditions for granting it are met, on a form prepared for that purpose (Art. 5(3)).
Renewal and cancellation of the licence
The commercial agent must apply to renew the licence annually within the first sixty days from the beginning of the year, regardless of the date of issue or last renewal (Art. 6).
The licence is cancelled in any of these cases: loss of any condition in Art. 4; cancellation, for one of the reasons in Art. 8, of the registration of the only commercial agency registered in the agent's name, where no new agency is submitted within one hundred and eighty days of the cancellation; failure to renew after the period in Art. 6 has passed (Art. 7(1)). The cancellation decision may be the subject of a grievance before the Minister within thirty days from the day after notification (Art. 7(2)).
Registering a commercial agency contract
The agent submits an application to the Registrar to register all of the agent's commercial agencies for foreign natural and legal persons after they have been authenticated in accordance with the law (Art. 10).
Agency contracts submitted by the agent must be on behalf of companies that produce or manufacture the goods and services, or through the original company that is owned by the producing or manufacturing company and officially authorised to grant sub-agencies in Iraq. The conditions for registering an agency contract are set by instructions issued by the Minister (Art. 14). Instructions issued under Law No. 51 of 2000 remain in force to the extent they do not conflict with the new Law, until replaced or repealed (Art. 22).
Instructions to Facilitate Implementation of the Commercial Agency Regulation Law No. 79 of 2017, No. 1 of 2020, were issued under Art. 23 and published in the Official Gazette (Al-Waqa'i Al-Iraqiya) No. 4604 on 16 November 2020. Art. 7 of them repeals the Instructions Regulating Commercial Agency Work No. 1 of 2014, and they took effect on the date of their publication (their Art. 8). They address the documents accompanying the licence application (their Arts. 3 and 4) and the obligations of the commercial agent and the agent's ledger (their Art. 6).
The commercial agent is prohibited from dealing in goods and materials prohibited by law (Art. 12).
The agency contract submitted to the Registrar is the official contract between the parties and the one recognised before government bodies and the courts (Art. 16).
The Registrar may decide, on the basis of legal evidence, that any commercial activity carried on in Iraq by a natural or legal person is to be treated as a commercial agency subject to the Law, by a statement published in one daily newspaper and in the bulletin. Any interested party may object within fifteen days of the last publication; the Registrar decides within ten days, and on expiry of that period the objection is deemed rejected; a rejection may be challenged before the Administrative Court (Art. 9).
Registration of an agency contract is cancelled in any of these cases (Art. 8): the registration was based on incorrect data or documents; the commercial agent or the principal requests cancellation, provided it is not intended to harm either party; the foreign principal company has breached its obligations towards Iraq and has been placed on the blacklist; ninety days have passed since the Registrar notified the agent that the contract term had ended; the agent's licence was cancelled and the agent did not obtain a new one within one hundred and eighty days of cancellation.
Obligations of the agent
The agent keeps a special ledger recording the profit or commission earned, the part of it transferred to Iraq and the commercial transactions made for the principal's account; presents it to the Registrar of Companies (commercial agencies section) when it is opened; and submits it to the General Commission for Taxes at the end of each fiscal year (Art. 11).
The entry of goods, products or services of foreign companies for the purpose of trading is prevented by the Ministry of Trade (the Iraqi General Company for Trade Fairs and Services) and the Ministry of Finance (the General Commission for Customs), except through the licensed commercial agent in whose name an agency contract for that company was registered, within the agent's area of activity in Iraq (Art. 13).
The Registrar supervises the agent's work and may send a delegate to examine the agent's books (Art. 15).
The principal may not terminate the agency contract or decline to renew it unless there is a reason justifying it. The contract may be terminated by agreement between agent and principal, or under an agreement between the parties that sets the arbitration procedures, the venue and the governing law (Art. 20).
Exemptions and penalties
Licensed scientific offices for the promotion of medicines are exempt from the Law (Art. 21).
The Law provides a fine for anyone who carries out commercial agency work without a licence or does not register all of their agencies, and for any agent who acts contrary to Art. 11, and imprisonment for any employee or person charged with a public service who deliberately carries out commercial agency work (Art. 18).
The Law repealed the Commercial Agency Regulation Law No. 51 of 2000 (Art. 22) and took effect on the date of its publication in the Official Gazette (Art. 24). The Minister may issue instructions to facilitate its implementation (Art. 23).
FAQ
What is a commercial agency in Iraq, and who may act as a commercial agent?
A commercial agency is a contract under which a natural or legal person is entrusted with selling or distributing the goods of a foreign principal, or providing its services, inside Iraq (Art. 1(3)). The Law defines the commercial agent as an Iraqi natural or legal person, who must hold the licence under Art. 4.
How to obtain a commercial agency in Iraq and register the agency contract?
The agent obtains the licence by applying to the Registrar of Companies (Art. 5), and then submits an application to the Registrar to register the agent's commercial agencies after they have been authenticated in accordance with the law (Art. 10). The conditions for registering an agency contract are set by instructions issued by the Minister (Art. 14).
What is the role of the Ministry of Trade in commercial agency in Iraq?
The applicant submits the licence application to the Registrar of Companies, who issues the licence (Art. 5). The Companies Registration Department is one of the departments of the Ministry of Trade, and its official website (tasjeel.mot.gov.iq) states that its tasks include registering commercial agencies and granting licences to commercial agents. The Minister in the Law is the Minister of Trade (Art. 1(1)), before whom a refusal or a cancellation of the licence may be the subject of a grievance (Arts. 5(2)(b) and 7(2)). The entry of a foreign company's goods for the purpose of trading is prevented except through its licensed commercial agent, by the Ministry of Trade and the General Commission for Customs (Art. 13).
May a foreign company act as a commercial agent in Iraq?
The Law defines the commercial agent as an Iraqi natural or legal person (Art. 1(4)), and requires a company applying for the licence to be an Iraqi company whose capital is wholly owned by Iraqis (Art. 4(2)).
Within how many days does the Registrar decide on a licence application?
Within ten working days of its registration as received at the Registrar's office; when the period ends, an application that meets the conditions of the Law is deemed accepted (Art. 5(2)(a)).
When is the licence renewed?
Annually, within the first sixty days from the beginning of the year (Art. 6).
May a commercial agent deal in any goods?
No. The commercial agent is prohibited from dealing in goods and materials prohibited by law (Art. 12).
Is a distribution agreement a commercial agency?
"Distributor" appears in the definition of a commercial agency: a contract under which a person is entrusted with selling or distributing goods or products, or providing services, inside Iraq as agent, distributor or franchisee of a foreign principal from outside Iraq (Art. 1(3) and (5)). The Law exempts only scientific offices for the promotion of medicines (Art. 21), and the Registrar may decide, on the basis of legal evidence, that any commercial activity is to be treated as a commercial agency (Art. 9). Instructions No. 1 of 2020 define the distributor agency among the forms of commercial agency (their Art. 1(3)).
Can a foreign principal end the commercial agency contract whenever it wishes?
No. The principal may not terminate the agency contract or decline to renew it unless there is a reason justifying it. The contract may be terminated by agreement between agent and principal, or under an agreement between the parties that sets the arbitration procedures, the venue and the governing law (Art. 20).
Are commercial agencies among the services of Al-Taswia?
Yes. Commercial agencies are among the legal services of Al-Taswia Legal Services Company in Baghdad. They include drafting and reviewing commercial agency contracts, and the steps of the licence application, authentication and registration of the contract with the Companies Registrar, and renewal of the licence (Arts. 4, 5, 6 and 10).
Source: Commercial Agency Regulation Law No. 79 of 2017, Official Gazette (Al-Waqa'i Al-Iraqiya) No. 4469, 13 November 2017. This page provides general legal information.
Commercial agencies among the services of Al-Taswia
Commercial agencies are among the legal services of Al-Taswia Legal Services Company, a law firm in Baghdad with 15 lawyers. The work of the lawyers in this area includes:
Drafting and reviewing commercial agency contracts, including review of the parties, the agent's area of activity (Art. 13), the products or services covered, the term, renewal and termination (Arts. 8 and 20), the arbitration clause and governing law (Art. 20), and the statement of profit or commission (Art. 1(3)).
Preparing the documents for the licence application required by Arts. 4 and 5, and checking that they are complete before the application is submitted to the Companies Registrar.
The steps of authenticating the agency contract and applying to the Registrar to register it (Art. 10).
The steps of renewing the licence each year (Art. 6).
Review of Arabic–English contracts, including agency and distribution contracts.
Applications are decided by the Companies Registrar and the competent bodies as the law provides. The company's services also include contract drafting and review.
About the author
*Othman Al-Juboori, Founder and Managing Director of Al-Taswia Legal Services Company, Iraqi lawyer and Member of the Iraqi Bar Association, practising since 2014. Author of the book How to Become an Unbeatable Lawyer: Fifty Practical Rules for Advocacy Before the Courts*.
See also
Trademark registration in Iraq
Arbitration and enforcement of foreign arbitral awards in Iraq
Company registration in Iraq

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