Coalition Provisional Authority
FOR IMMEDIATE RELEASE Press Contact: Sam Whitfield
Thursday, April 1, 2004
Restructuring of Iraqi Company Law
Baghdad, Iraq - Ambassador Bremer signed into law CPA Order 64 that will
revise Iraq Company Law of 1997. Both the Minister of Finance and the Finance
and Planning Committee of the Iraqi Governing Council were consulted and their
approval given. The new Iraqi company law creates a modern legal environment
that eliminates many of the avenues of corruption used by the former regime.
The revised law eliminates restrictive barriers to the formation of
corporations, encourages the infusion of capital into existing Iraqi companies,
removes the remnants of Iraq’s centrally planned and controlled economy, and
officially opens the door for foreign investment in Iraq by making the Company
Law consistent with CPA Order No. 39 on Foreign Investment.
Important changes include:
· Conforming the Company Law to Order No. 39 on foreign investment, in part by
ensuring substantially equal treatment of foreign investors with local nationals
for purposes of establishing entities.
· Reducing the steps and time necessary to form companies and requiring the
Registrar of Companies (Ministry of Trade) to act within set time periods in
processing company formations and recapitalizations.
· Allowing individuals to form single member limited liability entities and
removing limits on the percentage of shares that a single shareholder can hold
with respect to Iraqi private sector joint stock companies.
· Eliminating conformity with state planning goals as a condition for approvals
under the Company Law (including, for example, company formation,
capitalization, reorganization, and liquidation).
· Reducing, and in most instances eliminating, the ability of state sectoral
authorities to prevent approvals or otherwise control development of the Iraqi
· Elimination of requirement for companies merging to be engaged in similar
· Elimination of the requirement for companies in certain industries to take the
form of a joint-stock corporation.
· Liberalizing the concept of par value of a share of stock
· Liberalizing the requirements for board of director membership
Implementation instructions for registration of Iraqi companies (by both Iraqis
or foreigners) have also been issued by the Minister of Trade. On a related
note, the Minister of Trade also recently issued instructions for the
registration of branch offices of foreign companies. A summary of laws and
regulations affecting business in Iraq, including the full text of the
registration instructions mentioned above can be found at http://iraqcoalition.org/economy/summary.html.
Business interested in finding out more on CPA Order 64 should contact:
CPA - Private Sector Development
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