South Korea and Iraq are set to sign a double taxation avoidance pact, the Finance Ministry of South Korea said on Friday, a move believed to promote bilateral economic relations.
The pact will take effect after both countries officially sign the deal and have it ratified by their respective parliaments, the ministry added, as reported by Yonhap news agency.
South Korean construction companies are already conducting major infrastructure projects in the country which has been heavily damaged over the past few years by the fight against the Islamic State.
South Korean Hanwha Engineering & Construction Corp. is expected to build 100,000 homes in the Besmaya suburb, located about 10 kilometers southeast of the Iraqi capital, by 2019, under an agreement of US $7.75 billion, according to the news agency.
The pact is the single largest overseas project for a single South Korean construction company.
Earlier in 2014, a South Korean consortium headed by Hyundai Engineering and Construction Co. won a contract of $6 billion to create a large oil refinery in the Iraqi city of Karbala.
Overseas contracts won by South Korean companies in 2010 totaled $71 billion. However, the amount over the past few years has decreased due to the drop in oil prices internationally, while the competition at an international level became more stringent.
In 2016, overseas contracts won by the South Korean companies added up to $28.2 billion and slightly rose to $29 billion in 2017, according to South Korean local media.