Iraqi labour law does not require employers recruit a specified proportion of Iraqi nationals for employment, except where an investment license is required for a project. Employment regulations in Iraq are overseen by the Social Security Law.
Most notably there are restrictions surrounding termination of employment. In some cases, using an outsourced employer will make fast track the process. It is recommended to use professional legal services as well. Our guide explains Iraqi policies on leave, termination and payment of benefits.
Complying with local payroll and tax requirements is essential for a company doing business in Iraq. Issues such as tax rates and withholding and social security are all essential in ensuring a seamless human resources operation. Many companies will consider outsourcing these administrative tasks to a GEO (Global Employment Organization).
Foreign workers are required to have the proper visas and work permits in Iraq, as established by immigration laws. This often requires incorporation and licensing prior to sponsoring work permits for employees, which can be a problem if your company is trying to enter the country quickly. Work permits are difficult to obtain given the current government stance which opposes issuance of visas to expatriate workers.
There are several business structures available for incorporation in Iraq, and each has advantages and disadvantages. In some cases it will depend upon the type of industry that you are in, and the scope of planned business activity. Our guide has a a comparison of the time and cost for incorporating standard company structures including Rep Office and WFOE.
Companies entering Iraq must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities. A GEO or Iraq Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have an Iraqi entity established that can run payroll.
A DIY approach will typically take 6-9 months until there is a properly incorporated WFOE ready to run payroll and cost up to 6 figures if registered capital is required. Shield GEO can deploy foreign staff in 4-6 weeks and local staff in 48 hours. Additionally Shield GEO is responsible for all compliance issues related to the employment.
|Management Fee for Employer of Record Services / Monthly Payroll Costs||
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Shield GEO pays the employee on a monthly basis, typically on the last working day of the month although we can adapt to your preferred schedule. Income tax and social security (where applicable) are deducted at source and paid to the local tax authorities.
|Tax Returns Supplied||
|Employers Social Security and statutory contributions||
|Employees Social Security and statutory contributions||
|Corporate Income Tax Rate||
Employers are required to calculate and remit 15% of personal income tax.