This area is located in the north of the country in Nineveh Governorate, on the Mosul-Dohuk road, about 20 km north of Mosul, with an area of 4.9 km2. The free zone is close to the sources of many raw materials, agricultural and animal products, which are inputs to many food industries such as canned goods, dairy products, rubber paste, sugar factories, flour, soft drinks and juices, in addition to the spinning and weaving industries, leather industries, sewing laboratories, water filling laboratories and the detergent industry. And sterilizers and medical supplies, as it is a fertile ground for industrial investments in the fields of assembly industry of machines, equipment, mechanisms, cars, electrical appliances, and others.
- No customs duties or taxes on imports or exports
- No capital gains or corporation tax
- Offshore banking is permitted
- No foreign exchange restrictions
- Transport and logistics
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 petro-chemicals, 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 burdens 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:
- The period of investment in commercial and service activities ranges from (15) years. As for the industrial activity, it is set for a period of (25) years, and these periods are subject to renewal based on the investor’s desire and the approval of the Commission
- The freedom of the investor to choose the activity in which he wishes to invest.
- There are no restrictions on the nationality of the investor or the invested capital
- Opportunities for 100%foreign investment, and there is no need for the presence of a local partner
- Freedom to choose the legal form of the project, individual project - company - partnership.
- Freedom to transfer profits and invested money
- Freedom to import and export, and not to be subject to import and export restrictions except for what enters Iraq
- Granting foreign investors facilities to reside within the country
- Freedom to use foreign workers while facilitating the procedures for granting them entry and residence visas
- The freedom to operate for others to exploit the services provided by the project
- The freedom to set the prices of products and determine the percentage of profits
- 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 thereto 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, and this 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