Companies Registration: The Iraqi Entrepreneurial Ecosystem Navigating the Legal Realm

There is an abundance of issues that are hindering the development of the business ecosystem in Iraq, through the whole value chain of the ecosystem. Efforts to correct these issues are fragmented and usually fall in the hand of one link in the chain rather than all the stakeholders. Here we want to start from the beginning and discuss the issues that come with registration. 

KAPITA Business Hub held the second policy dialogue - in Dec 2022 to discuss the issues and the process of the legal registration of companies. 

KAPITA organized the session with the support of Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ)

During our policy discussion with stakeholders from the government, the legislative representatives and the private sector, represented by startups and SMEs, we have come to the conclusion that there are some specific issues that need to be addressed first and foremost. 

The issues start with the fact that the Iraqi law doesn’t have any definition of what a startup is. This has caused many startups to be put in a position where registering their startup would lead them to financial ruin. If they register their company early on, there is a huge possibility that it will cost them more than they can afford. Therein, many entrepreneurs wait until they reach a certain point of growth until they decide to register their company. 

The fact that an outdated categorization of companies is leading tech companies to be in a position where they can’t find an accurate detention for registering their startups. These factors lead startups to operate within the informal sector. Thus, having a negative impact on the Iraqi economy as a whole, for unregistered startups will not be contributing in terms of taxes.

This was the first session to address the topic. A second session will be held to follow up on the conclusions and implement an action plan with stakeholders.

About KAPITA's Policy Dialogues:

KAPITA Business Hub is organizing policy dialogues in order to gather the stakeholders of the Iraqi ecosystem at the discussion table to address certain challenges that face the Iraqi private sector and entrepreneurial scene and explore the roadmap to overcome them. KAPITA aims to publish the results of those fruitful dialogues in a policy paper that outlines the main issues, the root causes, and the potential solutions. This aligns with KAPITA's mission of developing the Iraqi private sector and fostering its growth.

About KِAPITA Business Hub

KAPITA s a private sector development company that aims to empower small and medium-sized enterprises (SMEs) through investment, research, incubation/acceleration, and market development programs. 

Posted in on Thursday, 22nd December, 2022