Iraq decides to establish 3 free zones
Provided incentives and exemptions, and significant investment opportunities for Arab and foreign investors
Translated by IRAQdirectory.com - [7/8/2009]
Despite the major shift in Iraqi trade from being closed to free and open trade to all International markets, Iraq's need for free zones grew bigger during the last two years, especially after the failure of those who were supposed to be in control of the country's trade entrances controlling these outlets , which has increased the flow of poor goods of unknown origins; however, this can be controlled through free zones distributed in South, Center and North of Iraq.
An official source in Ministry of Finance said in an official statement, "Free economic zones in recent years, has got widespread global concern and become one of the main methods of attracting investments in many countries of the world for its achievements in increasing production, export, revitalization of trade, development of the country's resources of foreign exchange, absorption of unemployment as well as the acquisition of knowledge and establishment of technology,"
Accordingly, Iraq has established three free zones within a special body called the General Authority for Free Zones. The zones are Khor Al-Zubair in Basra, Nineveh, and Alqa'im free zones. There are also efforts to open many free zones in the other regions.
These three free zones has been active since 2000 or so and still are despite the difficult circumstances they went through. The source said that there are many components behind the success of these zones: first Iraq is strategically located as an intermediary among the countries of the world; it is close to the world markets, overlooking the Arabian Gulf on one hand and the outskirts of Europe on the other, which makes it a geographic linking point for international trade lines between the countries of West Asia, the Arab Gulf States, South-East Asia and Europe. Second, the presence of Iraqi ports, land border ports, airports, heavy network of highways, railways and shipping lines gave the currently operating free zones in Iraq a privileged place. The free zone of Khor Al-Zubair overlooks the Arabian Gulf and close to the nearby ports as well as to the three countries of Saudi Arabia, Kuwait and Iran. The free zones in Nineveh is close to Syria, Jordan, Turkey and then to the European markets, while the Free Zone in Al-qa'im is close to Syria and Jordan. Third, Iraq has the second largest oil reserves in the world; it also is one of the points of industrial investments for the provision of cheap energy (oil and natural gas) and its products like the petrochemicals and fertilizers, as well as the raw materials of iron, phosphate salts, agriculture and animal products, which are the input for many industries. There are also the legislative and legal components to attract investments through incentives, exemptions and guarantees granted to investors. In addition to flexibility of the contracting process and procedures for smooth flow of work within the free zones.
Iraqi market is one of the large promising consumer markets, considering the high trend for consumption in it, especially after the rise in purchasing power of Iraqi individual. One of the characterizes of investment in Iraq free zones is low cost of investment projects, either operational or investment costs, and which is attributed to the difference in exchange rate of local currency against foreign exchange; and this leads to a decrease in value of local production requirements of raw materials and intermediate goods as well as the rate of wages for provided services. Other advantages of investing in Iraq free zones are: the freedom to choose investent activity, no restrictions on investor's nationality or investor's capital, opportunities for foreign investment by 100 per cent without the need for a local partner, the freedom to choose legal form of project, free transfer of profits and funds invested, the freedom of import and not to succumb to the import and export restrictions, grant foreign investors facilities to reside inside the country, freedom of using foreign labor and granting them Visas to entry and residence, the freedom to determine prices of products and ratios of profits and no time limit or restriction on the remaining of goods inside the free zone as long as they are suitable for storage. The Iraqi government has also given a lot of incentives and exemptions enjoyed by the free zones projects in Iraq such as the competitive prices of wages and allowances, as well as the exemption of capital, profits and income from the investment project of all taxes and fees, and the exemption of exported and imported goods from all taxes and duties.
According to the same source in the Finance Ministry, neighboring countries are rushing to demand for the establishment of free zones in common with Iraq near the border crossing points, and other free zones of their own inside Iraqi territory and under the supervision of the free zones in Iraq.
The expert at Iraqi Central Bank, Madhar Mohammed Salih, said that although Iraq has issued the Free Zones Act after 1990, it did not work by this law due to the events which the country went through, and despite the fact that trade was liberalized after 2003 , Iraq is still in need of free zones because of the weak commercial outlets with the world; thus, the free zones will create serviced areas that will ratify the origin of goods and all business dealings will be abridged. He added that these zones could turn into industrial areas bringing in capital to non-residents within Iraq.
Prepared & Translated By:
IRAQdirectory.comTeam
Provided incentives and exemptions, and significant investment opportunities for Arab and foreign investors
Translated by IRAQdirectory.com - [7/8/2009]
Despite the major shift in Iraqi trade from being closed to free and open trade to all International markets, Iraq's need for free zones grew bigger during the last two years, especially after the failure of those who were supposed to be in control of the country's trade entrances controlling these outlets , which has increased the flow of poor goods of unknown origins; however, this can be controlled through free zones distributed in South, Center and North of Iraq.
An official source in Ministry of Finance said in an official statement, "Free economic zones in recent years, has got widespread global concern and become one of the main methods of attracting investments in many countries of the world for its achievements in increasing production, export, revitalization of trade, development of the country's resources of foreign exchange, absorption of unemployment as well as the acquisition of knowledge and establishment of technology,"
Accordingly, Iraq has established three free zones within a special body called the General Authority for Free Zones. The zones are Khor Al-Zubair in Basra, Nineveh, and Alqa'im free zones. There are also efforts to open many free zones in the other regions.
These three free zones has been active since 2000 or so and still are despite the difficult circumstances they went through. The source said that there are many components behind the success of these zones: first Iraq is strategically located as an intermediary among the countries of the world; it is close to the world markets, overlooking the Arabian Gulf on one hand and the outskirts of Europe on the other, which makes it a geographic linking point for international trade lines between the countries of West Asia, the Arab Gulf States, South-East Asia and Europe. Second, the presence of Iraqi ports, land border ports, airports, heavy network of highways, railways and shipping lines gave the currently operating free zones in Iraq a privileged place. The free zone of Khor Al-Zubair overlooks the Arabian Gulf and close to the nearby ports as well as to the three countries of Saudi Arabia, Kuwait and Iran. The free zones in Nineveh is close to Syria, Jordan, Turkey and then to the European markets, while the Free Zone in Al-qa'im is close to Syria and Jordan. Third, Iraq has the second largest oil reserves in the world; it also is one of the points of industrial investments for the provision of cheap energy (oil and natural gas) and its products like the petrochemicals and fertilizers, as well as the raw materials of iron, phosphate salts, agriculture and animal products, which are the input for many industries. There are also the legislative and legal components to attract investments through incentives, exemptions and guarantees granted to investors. In addition to flexibility of the contracting process and procedures for smooth flow of work within the free zones.
Iraqi market is one of the large promising consumer markets, considering the high trend for consumption in it, especially after the rise in purchasing power of Iraqi individual. One of the characterizes of investment in Iraq free zones is low cost of investment projects, either operational or investment costs, and which is attributed to the difference in exchange rate of local currency against foreign exchange; and this leads to a decrease in value of local production requirements of raw materials and intermediate goods as well as the rate of wages for provided services. Other advantages of investing in Iraq free zones are: the freedom to choose investent activity, no restrictions on investor's nationality or investor's capital, opportunities for foreign investment by 100 per cent without the need for a local partner, the freedom to choose legal form of project, free transfer of profits and funds invested, the freedom of import and not to succumb to the import and export restrictions, grant foreign investors facilities to reside inside the country, freedom of using foreign labor and granting them Visas to entry and residence, the freedom to determine prices of products and ratios of profits and no time limit or restriction on the remaining of goods inside the free zone as long as they are suitable for storage. The Iraqi government has also given a lot of incentives and exemptions enjoyed by the free zones projects in Iraq such as the competitive prices of wages and allowances, as well as the exemption of capital, profits and income from the investment project of all taxes and fees, and the exemption of exported and imported goods from all taxes and duties.
According to the same source in the Finance Ministry, neighboring countries are rushing to demand for the establishment of free zones in common with Iraq near the border crossing points, and other free zones of their own inside Iraqi territory and under the supervision of the free zones in Iraq.
The expert at Iraqi Central Bank, Madhar Mohammed Salih, said that although Iraq has issued the Free Zones Act after 1990, it did not work by this law due to the events which the country went through, and despite the fact that trade was liberalized after 2003 , Iraq is still in need of free zones because of the weak commercial outlets with the world; thus, the free zones will create serviced areas that will ratify the origin of goods and all business dealings will be abridged. He added that these zones could turn into industrial areas bringing in capital to non-residents within Iraq.
Prepared & Translated By:
IRAQdirectory.comTeam