Located in the middle of the energy aisle, Iraq is very important for Turkey, regional countries, Europe and USA.

Turkey has a natural interest in Iraq throughout history, however, Turkish desire to become a regional player requires serious and meticulous works on Iraq. Considering the Turkish foreign policy about that region, it is thought that any work to be performed in Iraq shall be supported by Turkish Government and State.

Iraq should not be deemed as a country to go, do business and earn money for a particular work. On the contrary, it should be considered as a medium-term and long-term business area. So, investments into and relations with the strategic Iraqi regions shall bring long term and permanent profits. Furthermore, since relatively comfortable areas will soon be satisfied due to a busy work flow, there will be a medium-term profit. For instance, Northern Iraq has turned into a busy work area for Turkey and other countries and world.

Iraq has failed to develop for 23 years due to the wars with Iran from 1980 to 1989, the civil war resulted from Halabja killings, and the 1st and 2nd gulf wars with Kuwait. So, the investments then did not come true nor renewed through those period. For instance, the cement factories belong to pre-1970 period. It is only for the last few years where serious investments could be made.

In early 2011, a new government was established which has put an end to the turmoil in the country, which is further explained below. And this fact has created a suitable and safe environment for investments and other business attempts in Iraq.

So, it is possible to make huge profits in Iraq, however, big companies should reveal their intentions openly and create a concept work on that and then enter into this area.


After the latest Iraqi elections in 2010, a new government was established in early 2011, which has eased the political situation in Iraq. After the elections, the Shia alliance got 18 ministries, Iraqiyye got 11, Kurds 8, El Avsat coalition 1 and Christians got 1 ministry. And Turkmens got 3 ministries from the Shia alliance. The Turkish government and US management welcomed the vote of confidence.

It is considered that this newly emerged situation would benefit to Turkey, including the 42 agreements which Turkey had entered into with Iraqi government in 2009. In this framework, it is considered that if foreign companies to invest or do business in other areas in Iraq should act together with Turkish Companies

In addition to the above mentioned facts, we have also observed during our trips to the region that medium term best business opportunities will emerge in the shia regions as the shia alliance dominates the new government (e.g in Najaf and Karbala), and that Mosul and Kirkuk, located in the middle of Iraq and being important for Turkey, also offer good opportunities for medium and long term business.

We have also noticed during our talks with the governor of Najaf that the cities of Najaf and Karbala will be a busy investment area, because Najaf was selected as the Capital of World Culture in 2012, and that governor has also said they will create opportunities for business in the region for Turkish businessmen and for the foreigners who will act in cooperation with Turkish businessmen, particularly in the field of businesses and investments in constructing energy, hotels, Shopping Malls, infrastructure and superstructure.

Any type of construction work is needed in the region, and it is likely that the business contracts for work could be awarded at very high prices. Also, the companies who will invest in the region could likely gain high profits, too.

In addition to that, another advantage of the big companies is that they can enter into the investment by obtaining a sales guarantee. Serious amount of support could be obtained from Iraqi and Turkish government on this issue. Current investment regulations of Iraq can set special conditions for privileged investments.

Besides that, many Iraqi businessmen with serious amounts of capital also look for safe business environments.

These firms invest in safe and close country notably in Turkey, Jordan, Egypt and United Arab Emirates since they refrain from having interview in Iraq.

So, the contracts and agreements about special businesses should be approved in notaries, embassies or consulates of both countries and this will provide the trust both in Iraqi level and at international level. For business to be done in the public sector, the government is already supporting such businesses. Also, the financial powers of the big companies play an important role in putting their desired conditions in the agreements to maintain their financial guarantee.

Also, the international financing organizations may sometimes bring about projects, which are quite profitable projects. It would also be good to engage in business for such projects, too.

Trust, power and mutual relations are very important in Iraq.

Considering all of the above mentioned facts, it is possible for the big companies which are interested in doing business in Iraq to do long-term businesses within a trusting relation by getting prepared, determining their field of business and finding channels of good relations

There is currently a huge need for housing millions in Iraq. Also, the infrastructure devastated during the war is being re-constructed. As Iraq is currently undergoing a re-construction, there is urgent need for the fields such as shopping centers, amusement areas, sporting facilities which are important for building morale and normalization of people.

There are currently many projects in many regions for re-construction of commercial and industrial areas.


As mentioned above, great effort is being made for maintaining a trusting environment. It can be evaluated that it would be difficult for companies, which had previously kept themselves away from doing business in Iraq due to the lack of trust, to set their future position if they are late in this environment from now on.

The business sectors and investment areas that can be made in Iraq are detailed below under general headings.


Although Iraq has more than 10% of the world's oil, it is poor in terms of energy.

The existing energy investments were not realized due to the above mentioned reasons, and there is still a huge need for energy at large scale. Currently, there is frequently power outages in overall Iraq due to the lack of sufficient energy, and generators are used to make up for it.

This situation prioritize any type of energy investment in overall Iraq as a profitable business. Currently, there is General Electric, Siemens, Calik Energy (Najaf and Karbala natural gas cycle power plants) from Turkey and Aksa Energy ( Iraq Sinjar ) as well as Enka which are doing energy business in the region. General Electric and Siemens are currently making such investments to meet all energy need of the whole Baghdad.

Nevertheless , Turkish firms has started to move their cogeneration and trigeneration units to Iraq Sinjar recently. Iraq needs investments regarding big power plants in the field of energy; thus cogeneration and trigeneration units will be profitable investment

We would like to emphasize that there are many opportunities about energy-generation investments for foreign investors who intend to invest in Iraq in consortium with Turkish and Iraq firms in short-medium- long term.

So, except for Baghdad and northern Iraq, there is currently the need for energy in all provinces of Iraq and they are waiting for investors.

Iraq has an anttractive position for the investments in the field of energy market.


Iraq needs huge amount of housing at large scale. Even for the current government's housing plan for 2011-2015, some 4 million housing work is planned, excluding private constructions and other superstructure and infrastructures.

In addition to the need for housing, there is the need for construction in almost all production areas such as roads, bridges, facilities for waste water and drinking water, factories, industry facilities, hospitals, schools, sporting facilities, shopping centers etc.

Considering the Iraq's need for 40 millions tons of cement for next 5 year, it can easily be seen how big an investment there will be required.

Because Iraq's needs vary and because it can not allocate big budget for construction of houses, it is evaluated that Iraq will encourage crediting, make-and-sell production or the production with sales guarantee.

Considering the fact that Iraq's next year income from oil can reach up to 400 billion dollars, it can be understood that Iraq will allocate more resources for such investments.

The main inputs of construction such as cement, iron and other materials are not being manufactured sufficiently in Iraq and the country can only meet %6 of the current needs. Considering the need for 40 million tons of cement in the next 5 year, it would be necessary to make profitable and constant investments in this area as the existing cement factories are not sufficient in terms of production and technology. For instance, the current cost of producing cement in Iraq is around 30-35 dollars/ton and it is sold around 125/130 dollars/ton. There are currently 17 cement factories in Iraq, three of which are private ones.

Also, it is evaluated that any investment in the field of production of any construction material will be profitable.

The roads are not sufficient in overall Iraq and there is the large scale need for repairing, improvement and re-construction. Currently, the master plans are undergoing design. The master road plans related to the Northern Iraq will be completed in April 2011 and large scale road contracts will be released.

Again, education facilities in overall Iraq are not sufficient and 400 school constructions are planned for 2011. Also, there is work for improving superstructure and infrastructure of all universities.

Currently infrastructure in health sector is not sufficient, either. And 20 hospital constructions with various capacity of beds are planned to be started for 2011. Also, private hospitals, imaging and dialysis investments could be very profitable.

The construction contracts to be made by the government in all above mentioned areas shall start as of FEBRUARY 2011.


Iraq has completed most of its contracts that will make it produce twice as bigger amounts of oil as it produces now. In this framework, some investors have already been given permits for searching oil and use of the field. There are still other ones which are waiting for permits for oil search and extraction.

Although Iraq has completed its efforts to make two-fold oil production, the existing 5 petro chemistry and refinery facilities can not meet the needs. So, investments on refinery and petro chemistry facilities are also encouraged by the state.

There is currently no investment on natural gas in Iraq. And Iraq is included in the NABUCCO project and it plans to provide gas into the project. So, the state of Iraq is open for big investments.

The issue which is stated under the title of energy should be considered in this title as well. Natural gas cycle power plants, cogeneration and trigeneration units may be privileged in power generation of Iraq.


Since Iraq has been subjected to wars and civil wars for the last 30 years, it was totally closed for tourism, except for religious areas in the shia regions, and no tourism investment was made for that period of time. The existing accommodation facilities in Iraq, particularly those in Baghdad, are not sufficient in terms of numbers and quality.

Iraqi government is well aware of this fact and it provides any support to encourage investors. The fact that safety has been maintained as of early 2011, the investments in Iraq will boost. The current religious and touristic regions in Iraq will attract many visitors from many countries, particularly from Islamic countries.

As the city of NAJAF was announced as the Culture Capital of World for 2012, there is currently a huge need for many tourism investments in this city. Because Najaf and Karbala are important for other groups of Muslim people as well as Shia, even today, around 4-5 millions of visitors from Islamic countries visit these places as part of religion tourism. The number of visitors will increase even further every single year.

This situation will make any type of tourism investment profitable and attractive in particular for hotel investments. Also, there is the need for shopping centers in these cities which will liven up the trade.


Finance is one of the best business opportunities in Iraq. There is a very serious amount of money circulating in Iraq. So, foreign investors are in need of reaching a financing organization which they can trust or could give investment credits at lower interest rates.

Another big need is the international insurance companies.

It is evaluated that the attempts in both fields will be supported by Iraq, because Iraqi state provides state warranty for any financing and financing profits towards an investment.


No company can bid for any tender in Iraq without registering first. So, companies to be registered should be determined properly, because the document that is issued after registration allows for a rating about the financial table of the company and types of businesses that the relevant company can do throughout Iraq (based on company's capital, work completions and vehicle parks), and the companies shall have to act accordingly.

Especially when it comes to doing business with the public sector, there comes the problem of letter of warranty. So, letters of warranty to be issued by the banks from close Arabic countries are important. So, big companies handle this problem over the Dubai or Jordan, as the central offices of most banks in Iraq are located in these countries.

Turkish government encourages banks to open branches in Iraq in order to support Turkish investors.

Turkish banks are continuing their efforts to open branches throughout Iraq particularly in Northern Iraq.

As for European investors, they do not face such problems.

Apart from these, Iraqi government provides state support for all finance and materials related to an investment that comes from abroad.

Considering assessments related to the regional political-economic strategies, Iraq has taken a concrete step in democratization. Turkish and foreign investors who look forward and think perspectively may benefit from opportunities with Turkish Government's assistance. Iraq , which is between Iran - Syria and attract attention of Turkey and all countires in the world , will be key field of energy and regional policies in the future. Since Iraq's geopolitical position in itself is subject to another article, only the commercial points of view is mentioned here.

It should be remembered that getting hard on for current issues may cause to miss opportunities in the future.

The topics in this article consists of our impression, experience and ongoing researches for our clients' various business in Iraq between 2009 and 2010.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.