Iraq client case studies in 2023
UAE IT services company establishes a branch office in Baghdad, Iraq
- Our client, a UAE based End-to-End Telecom Solution provider with a presence in over 22 countries globally wished to establish a permanent establishment in Baghdad to provide the same services in Iraq;
- Having found Healy Consultants Group PLC through Google, our Client sent us an email inquiry to obtain more information on the process and timelines to establish an Iraqi company;
- After multiple phone discussions, Healy Consultants Group PLC advised our Client to proceed with setting up a branch office since this was the most preferred structure by foreign entrepreneurs setting in Iraq and also because it allows 100% foreign ownership. Our Client then confirmed they were interested to proceed with branch setup;
- Our Client then proceeded to complete and sign our engagement letter and settle the first instalment of our Iraq branch setup fee with Healy Consultants Group PLC to commence the engagement;
- Healy Consultants Group PLC prepared and emailed our Client i) draft of the proposed corporate structure for the Iraq branch for review, input and approval and ii) partly paid invoice for their records;
- Our Client then provided Healy Consultants Group PLC with scan copies of all the due diligence documents as per our Firm’s KYC process requirements;
- Because our Client’s business is in a restricted industry, Healy Consultants Group PLC confirmed with Iraq Government that our Client’s IT and Networking Services will not require a special approval from the Ministry of Interior and General Intelligence and Reconnaissance Directorate, before we can advance branch registration;
- Healy Consultants Group PLC then prepared a i) detailed project plan for the step-by-step process of company incorporation and tax registration ii) a complete checklist of personal and corporate documents required to be notarized and attested at Ministry of Foreign Affairs in UAE and then the Iraqi Embassy in UAE. The documents included a i) Power of Attorney ii) board resolutions appointing the local branch manager, accountant and legal advisor and iii) our Client’s parent company corporate documents;
- Healy Consultants Group PLC also confirmed with our Client their preferred city of registration in Iraq. Our Client preferred setup in Baghdad. Our Client then couriered the attested documents to our office in Iraq for review, final legalization at the Ministry of Foreign Affairs in Iraq;
Branch Office incorporation
- Healy Consultants Group PLC proceeded to draft the branch articles of association, collated all the legalized documents and submitted a quality branch registration application to the Iraq Ministry of Interior (MOI) and Ministry of Trade in Baghdad for pre-approval;
- Unfortunately, because there was a discrepancy on our Client’s parent company name, the Ministry of Trade reverted requesting for the board resolution from our Client’s parent company be changed. Healy Consultants Group PLC immediately informed our Client of this requirement and our Client proceeded to prepare a new Board Resolution, legalize in UAE and courier the same to Iraq;
- Healy Consultants Group PLC then obtained the initial approval certificate from the Registrar of Companies at the Ministry of Trade for the foreign branch registration and provided our Client a copy of the same. Our Client then settled our second instalment payment;
- Healy Consultants Group PLC proceeded to assist our Client to secure a virtual office in Baghdad and sign a lease agreement for 1 year. Thereafter, our Incorporation Team submitted a complete branch registration application at the Companies Registry Office at the Ministry of Trade;
- Unfortunately, due to COVID19 related delays at the Companies Registry, there were 5 weeks of delays with the branch registration approval processes. Healy Consultants Group PLC Iraq team daily followed up with the Ministry of Trade to get update and timely updated our Client on the same;
- After 7 weeks, the Iraq company registration office issued the branch registration number and identification number. Healy Consultants Group PLC provided the same to our Client. Our Client was now legally able to start business by i) signing local contracts and ii) employing staff, but not legally issue invoices;
- Unfortunately, thereafter, the Iraqi government imposed a 10-day lockdown due to the rise in Covid-19 cases. After the lockdown, Healy Consultants Group PLC submitted a quality complete tax number application to the General Commission of Taxation to secure a Tax identification Number (TIN). Approval was granted within 5 weeks;
- To comply with local commercial law, Healy Consultants Group PLC emailed our Client an example of how an Iraqi branch sales invoice including i) branch registration number and ii) corporation tax number and iii) city centre business address and iv) National ID number and v) bank account details;
- Healy Consultants Group PLC then appointed for our Client on a temporary basis i) our local lawyer as the statutory legal advisor of the branch office and ii) a chartered accountant in accordance with the local regulatory requirements. Our Client then settled last instalment of the outstanding Healy Consultants Group PLC fees;
- Our Client then agreed with Healy Consultants Group PLC to appoint their local Iraqi manager as the proposed sole bank account signatory. Our Banking Team then approached multiple Iraqi banks to secure their interest for our Client business;
- Healy Consultants Group PLC coordinating with our Client’s Iraq manager managed to secure a meeting with a local bank in Iraq and travelled to Baghdad to sign bank forms. The bank then requested that our Client prepares a new POA appointing the Iraqi manager as the sole signatory and have the same legalized in UAE;
- Following receipt of the legalized POA, unfortunately, there was a security related issue in Iraq with regards to ISIS and the Central Bank of Iraq stopped opening of new accounts. Healy Consultants Group PLC Iraq Team daily followed up with the bank to determine when the accounts would be approved;
- After 7 weeks, the bank released the corporate bank account numbers to our Client’s Iraq manager who in turn shared the same with our Client in UAE. Our Client’s branch office was now ready to receive and transfer funds from clients and suppliers globally;
- As requested by our Client, Healy Consultants Group PLC collated all corporate documents including branch certificate of registration, branch license, tax certificates and lease agreement and couriered the same to our Client’s preferred address in Baghdad.
Chinese electrics and electronics solutions provider sets up Iraq branch office
- Our Client is developer and provider of electric systems, transformers and photovoltaic power stations. The Client wished to set up an Iraqi entity to pursue a contract in the Nissan Province of New Baghdad.
- To qualify for the tender bidding process and submit their proposal, the Firm required a commercial registration number.
- Only if the Firm was awarded the tender would a local bank account be opened and senior staff from China would relocate to Iraq.
- Taking into account the tight deadline the Client had to submit their bid, our CEO Americas & Africa Kunal Fabiani presented the Iraq branch office proposal to our Client highlighing the expected nine-week timeframe to complete branch office setup and outlining the legal requirements to i) lease local office premises ii) appoint a resident director and iii) appoint a chartered accountant and local attorney after the entity is registered.
- Our Client then i) agreed the corporate structure, including the use of nominee resident director services, and settled the first instalment of our fees and ii) emailed the KYC documents of the parent company and ultimate beneficial owner.
- Healy Consultants Group PLC prepared a detailed engagement project plan mapping out a step-by-step plan to engagement completion.
Document legalisation delay
- After receipt of the first instalment fees, Kunal emailed our Client i) a set of draft branch registration documents and Power of Attorneys in English for our Client’s review and ii) a detailed checklist of documents to be notarised, translated to Arabic and legalised by the Iraqi Embassy in China.
- Following feedback from our Client regarding the draft documents, Kunal emailed our Client final copies in Arabic for signature and attestation.
- The documents were promptly signed, notarised and translated within two weeks. However, the Client encountered a delay of almost four weeks with the Iraq Embassy in China, which put in jeopardy the timely setup of their Iraqi branch office and their ability to meet the deadline to submit the proposal for the tender.
- Upon receiving the original legalised set of documents at our Basra affiliate office, our legal team completed further attestations with the Iraq Ministry of Foreign Affairs within one week, and submitted the final document set to the Basra Registrar of Companies for review and processing.
- Over the subsequent weeks, Kunal and the Basra legal team constantly monitored and followed up with the representatives of the Registrar of Companies. Our lead attorney also scheduled a meeting with the registrar to fast track branch registration.
- Despite assurances given by the Registrar Director, the application for multiple company and branch registration applications remained pending for five weeks. Consequently, our legal team formally filed a complaint with the Ministry of Commerce, resulting in the replacement of the Registrar Director. Fortunately, within one week of the new Registrar Director assuming his position, our Client’s application was finalised, and the Certificate of Registration was issued.
- Our Client was grateful for the deliverable to be supplied before the deadline, and offered Healy Consultants Group an additional bonus payable with the second instalment.
- To complete the engagement, Healy Consultants submitted the branch tax registration application and received a tax number within three weeks. Kunal emailed our Client the tax registration certificate and a sample proforma invoice so our Client can invoice local customers when they are ready to commence operations.
- While our Client’s company remains dormant, there are no monthly quarterly filings to complete.