Having prominent geographical advantages, Iraq is planning to improve the performance of its three free-trade zones. Experts are anticipating that if Iraq becomes successful with its motto, then the over oil-reliance of Iraq can get lessened up.
Presently, as mention earlier, three main free-trade zones have been there in Iraq. They are: Basra in the south, Nineveh in the north and al-Qaem in the west. In case of the western free-trade zone, which is also known as al-Qaem, trading or economic activity has been hampered a lot due to the conflictions inside Syria.
To define free zones, it can be said that there are small districts within the political boundary of the country of Iraq. However, they are considered outside the country’s customs border. As a result, everything that comes in and out of the free zones is not subject to import and export controls and duty.
In this year, Iraq has already declared that the country is designing a contract to create first free zone in Baghdad. If this project gets successfully ended, then it is assumed that unemployment problems in Iraq may get eradicated.
The Free Zone Law in Iraq affords extensive privileges to investors. Thus, establishing free zones would definitely bring lucrative opportunities for the investors in Iraq. The Free Zone Authority which is a part of Iraqi Ministry of Finance has recently reported that it has signed an investment contract for public transport and civil aviation affairs in the free zone in Khor al-Zubair in the Basra province.
According to the authority, it has been also revealed that the free zones of the south of Iraq will enhance its business practices to gain fast economic growth. As per mentioned in contract, an area of 12,000 square meters will be in service.
It has also been stated that investment trend in the Iraqi free zones also have been started blooming as the investors are interested to gain business advantages of these fields. From local to foreign companies – all sorts of investment interests are being noted.
Iraq has signed memoranda of understanding on trade with several countries. Some of these contracts include the establishment of free trade zones on the border. On the other hand, the semi-autonomous region of Iraq, Kurdistan, has recently announced that the region would go jointly with Turkey to establish a free zone in the Kurdistan region, which will aid the economy of the region immensely. Turkey showed its interest in the last year’s September to venture an free zone establishment project at northern Dohuk province.
At the Babil province – a free zone development project has been proposed in order to support the invertors and to give a hike to the economy of the country. It is stated by Iraqi government that the free zone will aid trading simulation and enhancing economic activities in Iraq. Gaining investors from different parts of the world is important.
Under Iraq’s Free Zone Law, goods imported and exported from the free zones are exempt from all taxes and fees, except when imported through customs. In addition to that, all capital, profits and income that have been derived from the investments in free zones trading are fully exempted from taxes. This will be applicable throughout the project lifecycle, including the construction and startup phases of the project.
According to the law, free zone authority can act as a free or independent body and thus, can make all financial and administration decisions. However, the authority should be affiliated with the Ministry of Finance and should be managed by a board of directors, which will include representative from the ministries.
The strategically geographical location of Iraq is fascination as it is surrounded by significant regional countries. Overlooking the Arabian Gulf, it is very close to the global market. It is well connected with both East and West. Iraq also has a dense network of land, sea and air lines, including a railway.
The authority’s general director Sabah Saleh al-Qaisi said that a delegation from the UAE-based Mac International visited Iraq’s free zones. It is a good thing for Iraqi free zones as rise in investment can be observed.
The Arab Investment and Export Credit Guarantee Corporation DAHMAN indicated that Iraq, Sudan, Bahrain and Oman have equal numbers of free zones in the countries.