PRESS RELEASE
Coalition Provisional Authority
http://www.iraqcoalition.org

FOR IMMEDIATE RELEASE Press Contact: Sam Whitfield
Thursday, April 1, 2004 Whitfields@orha.centcom.mil
 

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 economy.
· Elimination of requirement for companies merging to be engaged in similar activities.
· 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:

Nate Faust
CPA - Private Sector Development
faustn@orha.centcom.mil
+1 703-343-8108
 

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