1st: By Branch of the Foreign Company or the Economic Organization, it is meant those Branches for Foreign Companies or Economic Organizations licensed "by this REGULATION to exercise a permanent activity in Iraq under a Treaty or an Agreement or a Contract with the State, or contracted to execute a certain project with Departments of the State or the Socialist Sector or Companies of the Mixed Sector or the Federations or the Co-operative Associations, or the Private Stock Companies whose nominal capital is not less than one million Dinar, and after approval of the competent Sectorial Authority.

2nd: By Office of the Foreign Company or the Economic Organization, it is meant those Representative or Liaison Offices of Foreign Companies or Organizations, licensed by this REGULATION, whose aim is to study the markets and possibilities of the work and production, or to promote their products and services or to facilitate contract with their maad Offices, and they are not allowed to exercise any commercial activity, including functions of the Commercial Agents and Mediators.

3rd: By the Foreign Company, it is meant the Juristic Persons licensed in accordance with their local legislations, in addition to the Individual Projects.

Section - 2

1st: For the purpose of this REGULATION, the foreign subcontractor who is contracted with the Main Contractor, is considered as if it is contracted with Departments of the State and the Socialist Sector, with approval of those Departments.

2nd : The Main Contractor remains to be responsible for executing the contract completely.

1st : The Foreign Company or the "Economic Organization which exercises a permanent activity in Iraq, or contracted to execute a certain project, should submit a written notification to Registrar of the Companies, immediately upon concluding the Treaty or the Agreement or the Contract pertinent to its activity or its project. This does not include the Companies and the Organizations which enter into contract to supply goods or materials, unless they have actual existence in Iraq, or that the Agreement or the Supply Contract includes rendering of services of whichever kind.

2nd:

The Registrar sets out restrictions to be laid down in coordination with the competent Departments whether the Foreign Company or the Economic Organization has to obtain a Licence for its Branch in Iraq within two weeks from date of receiving the notification.

3rd : The Minister of trade may license opening a Representative or a Liaison Office for the Foreign Company or the Economic Organization not covered by provisions of the two paras

(1st) and (2nd) of this Section after receiving opinion of the Sectorial Authorities concerned.

Section - 4

The Foreign Company or the Economic Organization which is subject to licence for opening a Branch or an Office should prepare the following documents, endorsed by the competent Authorities :-

1st : Two copies of the FORM pertinent to Request for the Licence.

2nd: two copies of Articles of the Incorporation and Articles of the Association for the Company or the mother Organization or whoever stands in lieu thereof.

3rd: Two copies of the valid Registration. Certificate for the Company or the Organization issued in the country where it has "been incorporated.

4th : A List covering names of Members of the Board of Directors of the Company or the Organization, and nationality of every one of them, and names of the persons authorized to sign on its behalf.

5th: two copies of the authorization (power of attorney) of the Manager assigned to non the Branch in Iraq and who resides therein actually, issued by Management of the Company or the Organization*

6th : two copies of the latest Final Accounts of the Company or the Organization, together with two copies of Report of the Board of Directors attached or annexed to these Accounts.

7th: two copies of the Israel Boycott Affidavit, in respect of the Companies subject to licence for opening a Branch only.

8th : A Letter of confirmation from Departments of the State or the Socialist Sector contracted therewith clarifying nature of the contract, together with pointing out date of commencement and completion of the contract, its total amount and the maintenance period - if any - this being in respect of the Companies subject to licence for opening a Branch only.

9th. : Any other documents that Registrar of the Companies may request.

1st: With observation of provisions of Section (3) of this REGULATION, application for licensing the Branch shall be submitted to Registrar of the Companies within (75)days from date of concluding the Treaty or the Agreement or the Contract, and the documents prescribed under Section (4) of this REGULATION shall be enclosed thereto.

2nd: Registrar of the Companies shall undertake approaching any Authority that the Law, or the REGULATION or the Instructions necessitate obtaining its approval for licensing the Branch or the Office.

3rd : The Registrar should issue his decision by approving the application for licensing the Branch or the Office or-rejection thereof within sixty days from date of its submission. And pursuant to request of the Registrar, the Minister of Trade may extend the said period thirty days in case the procedures prescribed under para (2nd) of this Section so necessitate.

4th: The Registrar publishes the approval for licensing the Branch or the Office of the Foreign Company or the Economic Organization in the Bulletin pertinent to the Companies, and in a daily newspaper at least for once, after levying the Duties set out in the table (3) attached to the COMPANIES LAW No.(36) of 1983.

5th : The Registrar issues Licence of the-Branch or the Office within fifteen days from date of the last publication, and the Branch or the Office acquires the Juristic Personality effective from date of issue of the Licence.

Section - 6

1st: Running of the Branch or the Office shall be undertaken by a Manager, or whoever deputizes him in case of his absence, authorized by Management of the Foreign Company or the Economic Organisation, provided that he resides in Iraq and his status, insofar as the responsibility is concerned, shall be deemed as those running management of the Iraqi Companies.

2nd: The Registrar should be notified within sixty days in case of changing the authorized Manager.

3rd : With observation of provisions of Section (1) of this REGULATION, it is not permissible for the Branch to exercise an activity other than that defined in the Treaty or the Agreement or the Contract but by approval of the Department contracted therewith.

Each Branch or Office should write down on all its papers and documents the full name as it is written down in its Licence for the Foreign Company or the Economic Organization, and its address and Centre of the Branch's Management in Iraq in Arabic language and in a way that can be read easily.

The Branch or the Office should maintain regular Accounting Registers in Arabic language for the whole of its activity concerning its work in Iraq in compliance with the Accounting System referred to in Section (201) of the COMPANIES LAW No.(36) of 1983.

1st: The Branch-prepares an Annual Plan which covers a comprehensive report in respect of its activity in Iraq for the next year.

2nd: The Branch submits to its Head Office periodical reports concerning execution and following up of its Annual Plan at least once in a year.

Section - 10

1st : a) Auditing Accounts of the Branch or the Office and its activities shall "be done by Diwan of the Financial Control,

b) The Branch or the Office should submit all the data, information and explanations that Diwan of the Financial Control deems necessary for facilitating its task in auditing Accounts of the Branch or the Office and to control its activities in accordance with provisions of Law No.(194) for 1980 of Diwan of the Financial Control, and the other Laws prevailing in Iraq, and the International professional rules and customs.

2nd: The Branch or the Office shall submit annually its Final Accounts and a Report in respect of its activities in Iraq to Diwan of the financial Control within a, maximum period of three months from expiry of its Financial Year. And in all instances, the Branch or the Office should submit its audited Final Accounts and its Annual Report to the Registrar within the eight months following expiry of that year.

3rd : The Branch shall attach to the Accounts and the Report referred to in (2nd) of this Section, the Final Accounts and Report of Board of Directors of its Mead Office, together with a List showing names and nationalities of members of the Board of Directors of the Foreign Company or the Economic Organization and within the eight months following expiry of the financial year.

4th : Submission of a document to be audited by a competent and independent Authority showing therein the financial position of the Foreign Company or the Economic Organization in accordance with the Rules, if there was a legal impediment that thwarts submission of its Final Accounts.

The Branch or the Office should submit to the Registrar information in respect of those working with it, in accordance with the Forms that the Registrar prepares.

The Registrar may request information he deems that it is necessary to be submitted in order to facilitate executing provisions of this REGULATION.

The Registrar may select an Inspector or more, of those competent persons, to inspect functions of the Branch or the Office, in case of need, and the Branch or the Office should render all the facilities necessary for the Inspector to carryout his duty.

Section - 14

1st:

a) Management of the Branch should, notify the Registrar when the Branch ceases to exercise its functions in Iraq, together with pointing out reasons of that within thirty days from date of the ceasure.

b) Management of the Branch or the Office should, notify the Registrar upon bankruptcy or liquidation or amalgamation or amendment to Articles of Incorporation or Articles of Association of the Foreign Company or the Economic Organization.

2nd: Management of the Branch or the Office should publish cases of the bankruptcy or the liquidation or the amalgamation in the Bulletin and for once.

Section - 15

1st : The Branch or the Office should commence with procedures of its liquidation within sixty days from date when reasons for granting the Licence no longer exist, this being by submitting a written application to the Registrar containing reasons for the liquidation, together with a Statement showing its financial position on that date.

2nd.: The Registrar undertakes to approach the Authorities concerned to obtain their approval for the liquidation within a week from date of receiving the application. And those Authorities should reply within thirty days from date of receiving letter of the Registrar.

3rd: The liquidation procedures should be completed, including submission of the liquidation Accounts audited properly

by Diwan of the Financial Control, within six months from date of submitting the application. And Minister of Trade may extend the said period if one of the concerned Authorities submitted a request justifying that.

4th :

a) If the Registrar finds that the liquidation has been done in compliance with the Law, he issues his decision for crossing out name of the Branch or the Office off his records and publishes the decision in the Bulletin and in a daily newspaper within ten days from its issuance.

b) The Juristic Personality of the Branch or the Office shall be considered to have ended on date of issuing the decision for crossing out its name.

Section - 16

The Office should commence with procedures of the liquidation within thirty days from receiving letter of the Registrar's approval for the liquidation application.

Departments of the State and the Socialist Sector should notify Registrar of the Companies with the following :-

1st: A summary of the contracts they conclude with the Foreign Companies and Economic Organizations immediately upon the concluding.

2nd : Dates of completing execution of those contracts; three months before that, and also on completion.

Section - 18

In implementation of provisions of both paras (1st) and (2nd) of Section (205) of the COMPANIES LAW No.(36) of 1983, renewing registration of the Branch or the Office shall be done upon submission of the following documents and payment of the Registration Duty prescribed in the said Law.

1st: A document which confirms that the Treaty or the Agreement or the Contract which permits for the Branch to exercise its activity is still valid, and the period expected for completion of the work in case activity of the Branch is not a permanent one, or a document which confirms that the Foreign Company or the Economic Organization has entered into a contract for execution of another project.

2nd: An endorsed document which confirms that the Foreign Company or the Economic Organization is still registered at its original country of registration.

3rd : A statement containing name of the Manager assigned to administer the Branch, in Iraq, and who is residing therein actually, and address of the Centre of Management of the Branch.

1st : When contracting with Departments of the State or the Socialist Sector to exercise a permanent activity in Iraq or to execute a certain project, and the Foreign Company or the Economic Organization has an Office licensed in Iraq, it should commence within sixty days from its concluding to convert its Office into a Branch, after submitting the documents prescribed under Section (18) of this REGULATION.

2nd: At a request from the Foreign Company or the Economic Organization, during liquidation period of its Branch, the Minister of Trade may approve for it to open an Office after completing procedures of the Branch liquidation.

3rd : It is not permissible for the Foreign Company or the Economic Organization to maintain an Office and a Branch for it in Iraq at the same time.

The Branch should notify the Registrar in case in enters into a contract to execute another project while executing a certain project, unless it has started with procedures of liquidating the Branch, and in this case, it shall have to reregister the Branch in accordance with Section (l8) of this REGULATION.

At request from contracting Departments of the State and the Socialist Sector, the Minister of Trade may exclude the contracts which have connection with security of the State from previsions of para (1st) of Section (17) of this REGULATION.

The penalties prescribed in the COMPANIES LAW No.(36) of 1983 shall "be applied to the Branch or the Office when committing any violation to the said Law or to this REGULATION.

The Regulation No.(17) of 1984 (Regulation for Branches of the Foreign Companies and Economic Organizations) shall be repealed.

This REGULATION shall be implemented from date of its publication in the Official Gazette. Written in Baghdad on this fourth day of Moharam for the Islamic Year 1410 coinciding the fifth day of August for the Gregorian Year 1989.

RESTRICTIONS AND CONDITIONS IN RESPECT OF SETTING UP A BRANCH FOR A FOREIGN COMPANY OR AN ECONOMIC ORGANISATION IN IRAQ [Full Text]

RESTRICTIONS IN RESPECT OF SETTING UP THE BUREAU [Full Text]