On its road to recovery, Iraq has witnessed an avid influx of foreign investment in its economy. With the ongoing developments in Iraq's legal infrastructure, it is anticipated that further regulations concerning international dispute resolution and judicial cooperation will be enacted in order to create a legal environment suitable for the country's attractive investment opportunities.
Consequent differences between Federal Iraq and the Kurdistan Region of Iraq in the application of commercial agency legislation have surfaced following the ratification of the new Commercial Agency Law by the Iraqi Parliament. While this new law has replaced the old Commercial Agency Law in Federal Iraq, it is yet to be deliberated by the Kurdish Parliament, where the old law remains applicable for all commercial agency matters in the Kurdistan Region of Iraq.
In light of the current humanitarian crisis and the large number of refugees that have entered the Kurdistan Region of Iraq, the presence of non-governmental organisations (NGOs) is vital in order to assist affected local communities and refugees. As the call for aid increased, the number of registered NGOs in the Kurdistan Region has surged. In this respect, NGOs must comply with applicable laws and regulations in order to secure a legal presence in the region.
Twenty-eight years after the enactment of the Labour Law (71/1987), Parliament voted on the new Labour Law (37/2015). Considering the fundamental differences between the governance system and business environment surrounding the promulgation of both laws, they naturally differ on several points. Understanding these differences is essential for the organisation of companies' relationships with their employees and the adjustment of underlying employment agreements.
The production sharing contracts signed between the Kurdistan regional government and international oil companies regulate almost all aspects of the companies' operations in Kurdistan. The Ministry of Natural Resources has, in practice, managed to unify the procurement procedures for all of the oil companies to a large extent, including setting unified thresholds, vendor requirements and tender approval procedures.
Directive 17094/2013 – issued by the Ministry of Natural Resources – states that the social security exemption regime applies to foreign employees of oil companies and provides relaxed exemption conditions for foreign employees of oil companies. However, despite the ministry's clear and flexible directive, exemptions are still granted on a discretionary basis, a fact which often proves to be a final hurdle when seeking exemptions.
Foreign oil services companies in the Iraqi Kurdistan Region are subject to special directives and requirements. The details and practical application of these conditions must be fully understood when planning a prospective presence in the region – in particular, the different requirements for registration of a branch of a foreign oil services company and incorporation of a local entity.