The World Bank and the International Monetary Fund (IMF) predict GDP will grow by 12% in 2012 and 10% in 2013, driven primarily by rising oil production and higher oil prices over the forecast period. Economic growth will be buttressed by robust increases in government expenditures. Iraq’s 2012 capital budget is up nearly 35% over the previous year, and with mounting pressure to provide basic services, the government is expected to spend even more than this amount on these infrastructure and social services needs.
Iraq was the United States 58th largest export market in 2011 (up from 64th in 2010). Total two-way trade reached $19.3 billion, a 40% increase from 2010. Total U.S. exports to Iraq rose to $2.4 billion, up 48% from 2010. Total Iraqi exports to U.S. reached $16.9 billion, up 39% from 2010 due to increased demand for oil and higher petroleum prices.
There are many opportunities for U.S. products and services in the coming decade. With increasing affluence, Iraqi consumer demand will continue to increase.
Doing business in Iraq is not without risk, but the U.S. Embassy in Iraq stands ready to assist U.S. companies wishing to enter this potentially lucrative market.
Enormous Market Opportunity
- Demand for U.S. Products: Iraq was the United States’ 59th largest export market in 2012. Total two-way trade reached $21.3 billion. U.S. goods exports to Iraq in 2012 were $2.1 billion, a $300 million decrease from 2011. U.S. goods exports to Iraq from January to June 2013 totaled $1.1 billion. The top non-agricultural export categories in 2012 were: Machinery ($589 million), Aircraft ($358 million), Vehicles ($311 million), Electrical machinery ($205 million); Optic and Medical Instruments ($201 million); Special Other Category (low value shipments and repaired products) ($57 million); and Iron and Steel products ($43 million). U.S. exports of agricultural products to Iraq totaled $145 million in 2012.
- Growing Affluence: The World Bank estimates that Iraq’s GDP will grow by 6.5% in 2014 and 6.6% in 2015, driven primarily by rising oil production and higher oil prices over the forecast period.
- Substantial Market Size: Iraq’s population is currently 31.8 million. U.S. foreign direct investment in Iraq is $1.2 billion.
- Doing business in Iraq is not without risk, but the U.S. Mission in Iraq stands ready to assist U.S. companies wishing to enter this potentially lucrative market.
Doing Business in Iraq
- If you are a U.S. company wishing to do business anywhere in Iraq, please contact the U.S. Commercial Service at the U.S. Embassy in Baghdad. The U.S. Commercial Service provides a range of services and programs to help American companies export goods and services to Iraq.
- Our Country Commercial Guide presents a comprehensive look at Iraq’s commercial environment, including economic, political, and market analysis. The report covers market conditions, best export prospects, export financing, assistance in finding distributors, and legal and cultural issues. http://export.gov/iraq/doingbusinessiniraq/index.asp
- Business Registration: Companies interested in establishing an office in Iraq or bidding on a Government of Iraq tender are required to register as a foreign business. This requirement also covers U.S. companies working on USG contracts. The process differs depending on where you intend to do business. If you are interested in doing business in the Iraqi Kurdistan Region (IKR), you will need to register with the Kurdistan Regional Government. If you are interested in operating in both the IKR and the rest of Iraq, you must register with the GOI Ministry of Trade. You can find detailed information on how to register your company in Iraq here.
- Business Visas: U.S. visitors to Iraq must have a visa before travelling. They can apply for a visa at Embassies of Iraq overseas, including the Embassy of Iraq in Washington, DC http://www.iraqiembassy.us/.
Doing Business in the Iraqi Kurdistan Region
- The Kurdistan Regional Government focuses on a wide range of economic sectors for favorable investment and commercial treatment, including manufacturing, agriculture, hotels and tourism, transportation, banking and infrastructure.
- Under the 2006 Kurdistan Region Investment Law, (PDF 2.2 MB) foreign investors receive identical treatment in the Iraqi Kurdistan Region as domestic investors. Foreign investors may own their entire project and profits are freely transferable. Foreign companies may be given land free of charge in the IKR. With an import license from the appropriate IKR authorities, the law allows favorable long-term tax and custom duties exemptions for many items.
- Please visit Key Business Links for links to more information on doing business in the Iraqi Kurdistan Region.
- The Commercial Sections at the U.S. Embassy in Baghdad and the U.S. Consulate General in Erbil offer several services to help you thoroughly vet prospective Iraqi business partners in the Iraqi Kurdistan Region and determine which Iraqi companies would be best to work with. These services include the International Company Profile, the International Partner Search, and the Gold Key Service. These services are described in more detail at: http://export.gov/iraq/