Home
BAGHDAD: Foreign investors seeking a foothold in Iraq take heed: you'll need a healthy dose of patience, a flexible schedule, and a love of tea.
Nearly nine years since the US-led invasion that toppled dictator Saddam Hussein, Iraq remains a state-centric economy and, beyond oil, private businesses have yet to play a significant role in the rebuilding of the once thriving Middle East bread basket.
Infrastructure remains dilapidated after years of war and economic sanctions, and investment is needed to reform banking, build houses and roads and fix a chronic electricity shortage.
That means plenty of opportunities for investors, but foreign executives already on the ground say it can take more than a year to become operational in Iraq, where security is one of the most costly risks. Taking the time to build relations with local partners is the key to success, they say.
"Nothing is fast in Iraq," said Alan Morrell, vice president of American bottled water firm Oasis. "We're going to have to start with tea and relationship building and we may dance for three or four months if it's a big deal. If it's a simple deal, we might dance for two weeks, but we're going to dance."
Attracting foreign investment is essential to the rebuilding of Iraq and the OPEC-member state has already signed a series of contracts with oil majors to develop its vast oil reserves, the fourth-biggest in the world. Iraq set a goal to attract $86 billion in investment by 2014 under a five-year economic development plan. The infrastructure, housing and electricity sectors need the most development.
The National Investment Commission (NIC) was created in 2006 to facilitate the process for international firms. It offers 'one-stop' shopping, including help with visas, registering a company and housing and security for investors during a first visit. NIC Chairman Sami al-Araji said dozens of companies contact him a month regarding business opportunities in Iraq.
LOCAL PARTNERS ESSENTIAL
Iraq's market, an educated populace of 30 million with big requirements after years of war and sitting on huge oil reserves, is considered a potential gold mine in a weak global economy. But risk factors, corruption, security against an ongoing and lethal insurgency and lack of legal safeguards, are high.
"I don't know anywhere else in the world where it's more essential (to have a local partner). There's so much uncertainty, so many unknowns to be navigating," said James Hogan, former chief executive of banking giant HSBC's business in Iraq. "Even before you navigate, you've got to understand the socio, economic, political drivers. And it is complex."
A lack of clear regulation makes even a simple process like obtaining a visa an arduous task. According to Araji, getting a 10-day single entry visa to Iraq should take 4-5 days and a six-month to one-year multiple entry visa about 10-14 days. Many foreign investors say it has often taken months to get visas for themselves or their workers.
[You must be registered and logged in to see this link.]
Nearly nine years since the US-led invasion that toppled dictator Saddam Hussein, Iraq remains a state-centric economy and, beyond oil, private businesses have yet to play a significant role in the rebuilding of the once thriving Middle East bread basket.
Infrastructure remains dilapidated after years of war and economic sanctions, and investment is needed to reform banking, build houses and roads and fix a chronic electricity shortage.
That means plenty of opportunities for investors, but foreign executives already on the ground say it can take more than a year to become operational in Iraq, where security is one of the most costly risks. Taking the time to build relations with local partners is the key to success, they say.
"Nothing is fast in Iraq," said Alan Morrell, vice president of American bottled water firm Oasis. "We're going to have to start with tea and relationship building and we may dance for three or four months if it's a big deal. If it's a simple deal, we might dance for two weeks, but we're going to dance."
Attracting foreign investment is essential to the rebuilding of Iraq and the OPEC-member state has already signed a series of contracts with oil majors to develop its vast oil reserves, the fourth-biggest in the world. Iraq set a goal to attract $86 billion in investment by 2014 under a five-year economic development plan. The infrastructure, housing and electricity sectors need the most development.
The National Investment Commission (NIC) was created in 2006 to facilitate the process for international firms. It offers 'one-stop' shopping, including help with visas, registering a company and housing and security for investors during a first visit. NIC Chairman Sami al-Araji said dozens of companies contact him a month regarding business opportunities in Iraq.
LOCAL PARTNERS ESSENTIAL
Iraq's market, an educated populace of 30 million with big requirements after years of war and sitting on huge oil reserves, is considered a potential gold mine in a weak global economy. But risk factors, corruption, security against an ongoing and lethal insurgency and lack of legal safeguards, are high.
"I don't know anywhere else in the world where it's more essential (to have a local partner). There's so much uncertainty, so many unknowns to be navigating," said James Hogan, former chief executive of banking giant HSBC's business in Iraq. "Even before you navigate, you've got to understand the socio, economic, political drivers. And it is complex."
A lack of clear regulation makes even a simple process like obtaining a visa an arduous task. According to Araji, getting a 10-day single entry visa to Iraq should take 4-5 days and a six-month to one-year multiple entry visa about 10-14 days. Many foreign investors say it has often taken months to get visas for themselves or their workers.
[You must be registered and logged in to see this link.]
