Foreign investors recoil as Iraq restricts company ownership

Iraq has begun enforcing legislation that prevents foreigners from owning a majority stake in any Iraqi company, casting new uncertainty on an already difficult investment climate.
An investor monitors prices on the Iraq Stock Exchange in Baghdad on Dec. 20, 2020. (KHALID AL-MOUSILY/Reuters)

Iraq has imposed new legal restrictions on foreign ownership of Iraqi companies – a move that is deterring investors at a time when the country is trying to attract foreign capital to help diversify the economy and make up for the government's shrinking investment budget.

The new restrictions come from legislation passed in 2019 that says foreigners can own no more than 49 percent of any company. When the law was first enacted, Iraqi policymakers indicated that exemptions would be given. But the legislation has not been amended, and now the Iraq Stock Exchange (ISX) has surprised investors by applying the law to all non-bank companies listed on the exchange.

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