Things have certainly changed a lot in Iraq since the days I was a high school student in Baghdad. Returning to my home country two and a half years ago to head Deloitte’s practices here in Baghdad and Erbil has given me a privileged position as a witness to a new era that is still unfolding. Via our two offices in the country the Deloitte team is not only helping to build a new history for Iraq, but also continuing Deloitte’s history here, reestablishing our presence in a country we first set up in more than 80 years ago.
To those outside the country, it is always more difficult to get a clear picture of what is happening on the ground here. Ten years have passed since the US-led invasion, but many wonder if the Iraq of today is any safer. Certainly, security remains the top concern for residents, businesses and investors, while electricity is still in short supply, and the country’s infrastructure is in need of repair and rebuilding. Yet, even though there are challenges, inevitably there are also opportunities. For example, almost one third of the country’s budget (the largest single-year budget to date of USD 100 billion) is earmarked for infrastructure investment. And plenty has been done in recent years to make the investment environment more attractive.
Today, foreign investors are granted equal rights to Iraqi nationals, including the right to purchase shares and bonds of companies listed on the Iraqi Stock Exchange, the right to acquire land for housing projects, the right to lease land for up to 50 years, the right to insure their investment with any national or foreign insurance company, the right to open bank accounts in foreign currency inside and outside the country and the right of repatriation of capital and profits.
A number of tax incentives have also been legislated, including providing for exemption from taxes and fees for a period of 10 years as of the date of commencing commercial activity, with the possibility of extension for an additional five years upon meeting certain criteria. At Deloitte we see the primary beneficiaries of the range of incentives to be the sectors of construction and construction materials, branded consumer goods, healthcare, electronics, retailing and hopefully, financial services and capital markets.
Although investing in Iraq is being facilitated, relationships and local partnerships remain key to making headway in the country. This is where leveraging the services of a firm like Deloitte can be crucial, knowing that you are partnering with a global firm whose local knowledge and deep understanding of the business environment make it right at home in Iraq.
By Ayad Mirza, Iraq Country Partner, Deloitte Middle East