Khor Al Zubair Free Zone

Khor Al Zubair Is A City In Basrah, IRAQ, One Of The Major Industrial Areas Containing The Khor Al Zubair Port. There are A Set Of Laboratories And Companies Such As Petrochemical, Fertilizer Plants, Iron And Steel Plants, And Liquid And Gas.

Khor Al Zubair Freezone Is Adjacent To The Port Of The Same Name which Has Attracted Significant Investment Since Its Establishment In 2004. Khor Al Zubair Freezone Is Spread Into A One Million Sqm Zone. It Includes The Basrah International Oil And Gas Hub, Which Was Set Up In 2009 And Uses The Port For Persian Gulf Access.

  

 The area is located to the southwest of the city of Basra at a distance of 45 km, characterized by its view of the Persian Gulf, which makes it an important link point for international trade lines. Maritime and land can be dealt with by the free zone, as it is adjacent to the port of Khor Al-Zubair and about 20 km from Umm Qasr port, in addition to the presence of the Safwan border port with Kuwait and the Shalamcheh port with Iran, its proximity to the sites of raw materials, as well as the presence of agricultural, animal and fish products adds to its advantages.

The location of the free zone made it the center of an open network of means of transportation. With the presence of shipping lines, there are express transportation routes that connect them with all free zones and neighboring countries. In general, the free zone in Khor Al-Zubair is a successful environment for all types of industrial, commercial and service investments.

 

Benefits

  • No customs duties or taxes on imports or exports
  • No value-added tax (VAT)
  • No capital gains or corporation tax
  • Offshore banking is permitted
  • No foreign exchange restrictions

 

Industries

  1. Production, sales, assembly, manufacturing (currently petrochemicals, fertilizer, iron, steel and gas) and re-packing
  2. Warehousing (re-export and trade)
  3. Transport and logistics
  4. Banking, insurance and reinsurance
  5. Professional support services for industrial activities

 

Why Iraq?

The Elements and Factors for the Success of the Iraqi Free Zones:

1. Geographical Location

Iraq occupies a strategic and mediating position between the countries of the world, as it is close to global markets and overlooks the Persian Gulf on one side and the outskirts of Europe on the other, making it a geographical link point for international trade lines linking the countries of West Asia, the Arab Persian Gulf states, and Southeast Asia with Europe. The Iraqi ports and the numerous land border crossings and airports, with Iraq’s link to a dense network of highways, railways, and maritime navigation lines. From this point of view, we find that the sites of the free zones operating in Iraq currently occupy a distinguished position within Iraq’s strategic location.

 2.  Economic Resources

Iraq occupies the second largest oil reserves in the world, and it is one of the reservoirs of industrial investments due to the availability of cheap energy (oil and natural gas) and its products such as petrochemicals, fertilizers and ores such as phosphates, iron, salts, agricultural and animal products, and these are inputs to many industries.

3. Market Size

The Iraqi market is one of the large and promising consumer markets.

Al-Iraqiya supervises a number of foreign markets, especially the markets of the Persian Gulf Cooperation Council countries and Iran, Turkey, Jordan and Syria, with the possibility of extending to other markets in Asia and Europe, in addition to the possibility of exploiting transit trade to the markets of Turkey, Syria and Jordan.

4. The Workforce

Skilled manpower is available in Iraq from graduates of Iraqi and foreign universities and technical and administrative institutes, who have experience in various fields of work. In addition, the wages of this skilled labor are low compared to their counterparts abroad, and this spares the foreign investor the burden of bringing skilled labor from abroad.

5. Legislative and Legal Constituents

Legislations and laws related to free zones in Iraq aim to attract investments through incentives, exemptions and guarantees granted to investors, in addition to the ease and flexibility of the contracting process and the streamlining of work procedures within the free zones.

6. Low costs:

What distinguishes investment in the Iraqi free zones compared to neighboring countries is the low investment costs of projects, whether investment or operational costs. It is known that reducing costs is one of the most important factors for encouraging investment.

 

Advantages of investing in Iraqi free zones:

  1. The period of investment in commercial and service activities ranges from (15) years. As for the industrial activity, it is set for (25) years, and these periods are subject to renewal based on the investor’s desire and the approval of the Commission  
  2. The freedom of the investor to choose the activity in which he wishes to invest.
  3. There are no restrictions on the nationality of the investor or the invested capital    
  4. Opportunities for 100%foreign investment, and there is no need for the presence of a local partner 
  5. Freedom to choose the legal form of the project, individual project - company - partnership.
  6. Freedom to transfer profits and invested money 
  7. Freedom to import and export, and not to be subject to import and export restrictions except for what enters Iraq  
  8. Granting foreign investors facilities to reside within the country 
  9. Freedom to use foreign workers while facilitating the procedures for granting them entry and residence visas   
  10. The freedom to operate for others to exploit the services provided by the project 
  11. The freedom to set the prices of products and determine the percentage of profits 
  12. Not specifying a time limit or a restriction on keeping the goods inside the free zone, whenever they are valid for deposit, and the storage allowance is paid for them.

 

Incentives and exemptions enjoyed by Iraqi free zone projects:

The ingredients and success factors that were previously touched upon are among the most important incentives offered to investors, and there are incentives and exemptions that are no less important than what was mentioned, namely:

1. Competitive rates for wages and allowances 

2. Exempting the capital, profits and income from investment from all taxes and fees throughout the life of the project 

3. Exported and imported goods are exempted from all taxes and fees, except for what is exported and imported from and into the country

4. Exempting the incomes of foreign workers from income tax 

5. The investor has the right to dispose of the project as a concession or participation in whole or in part 

6. The entry and exit of foreign currencies or dealing with them within the free zones is not subject to any restriction or condition 

7. Exemption of goods destined for free zones from all border ports from transit fees with free transportation goods between free zones and exemption from customs and transit fees 

8. Facilitating administrative procedures and work licenses.

 

Investment opportunities in the Iraqi free zones:

1. The Authority's Law and the instructions issued pursuant to it allowed the practice of all industrial, commercial, and service activities (except for those prohibited), as well as storage operations and transit activities.

2. Neighboring countries rushed to request the establishment of a joint free zone with Iraq and near the border crossings.

3. The current trend in Iraq towards investing in the oil field, was evident during the oil licensing rounds, opening the way for creating investment opportunities for many investors and companies contracting with the Ministry of Oil.

4. Due to the presence of lands belonging to the Authority prepared for investment with flexible and non-routine contracting procedures, which prompted it to open new areas for investment according to the following methods 

         A - Development and operation.

         B- Participation. In addition to the current leasing method