| 2008: Kurdistan becoming economic development gateway to Iraq |
|
June 12, 2008 Investment Law "providing encouraging ground for investment" in the Region. The generous Investment Law offers incentives to outside investors, making Kurdistan one of the most investor-friendly places in the region. Investment projects already licensed by the Kurdistan Region Investment Board are valued at $16 billion USD and are all private-sector projects, an official from the Board told the London-based Asharqalawsat newspaper. Nawroz Mawlud Mohammed Amin, Director General of Legal, Financial, and Administrative Issues at the Board, said that more than 105 investment projects with private capital have been registered at her office since its establishment due to the Regional Investment Law passed by Parliament in the second half of 2006. The projects are distributed among the three Kurdish provinces of Erbil, Sulaimaniya, and Duhok. However, according to Erbil Governor Nawzad Hadi, the distribution is uneven. "According to the list of licensed investment projects by the Investment Law, projects over the past year valued at $11.5 billion USD began all over the region, 85% of which are only in Erbil Province," Hadi told a local news agency. "Fifty-three projects have been licensed in Erbil with the value of more than $9 billion USD. The remaining projects are in the other two provinces." Investment projects licensed in the region are from various sectors including tourism, industry, agriculture, finance, education, health care, trade, and housing. The regional Investment Law has provided an encouraging ground for investment activities in the region by offering incentives to investors. According to the law, investors are not taxed for a period of 10 years; that is, they can have 100% of their earnings. Additionally, the government provides plots of land needed for investment projects free of charge. These and other facilities offered to investors hand in hand with the notable security and stability enjoyed by the region, compared to the other parts of Iraq where instability is the main obstruction to development in inflow of capital, has made the region an economic development gateway to Iraq as a whole. Amin said that the last investment project licensed in the region is the Tarin Hills project implemented by the UAE Damac Properties. The project, which is developing a tourist compound in an area near the capital city of Erbil and the value of which "exceeds $6 billion USD" is set to start before the end of the current year and is to be implemented in two phases, each with $3 billion USD and five years of time. According to Amin, the factors behind the success of business in the region is the security and stability, institutionalization of business, and operation according to certain laws and regulations, besides "the Prime Minister's faith in the youths in implementing the plans of the region's administration including the issue of investment, which is vital for the Kurdish economy." According to Hadi, before the licensing of Damac's Tarin Hills, around 86% of all the investment in the region was owned by local companies, 9.2% by foreign companies, and the remainder were joint ventures between local and foreign companies. "Now, however, with the Damac project, the share of foreign direct investment has increased sharply," Hadi claimed. "Damac is the largest investment company that has ever entered Kurdistan, a fact that reinforces that stability in the region." The Investment Law doesn't discriminate between local and foreign investors as an attempt to encourage foreign investors to invest their capital in the region. The official from the board stated that foreign investor and capital are treated as local investor and capital and the foreign investor is entitled to hold absolute possession of the capital of any project (s)he sets up in the region. Foreign investor is also entitled to, according to the law, taking all the income and capital of his/her project out of the region at the completion of the project on the condition that it doesn't violate the regulations of the law. |