The authority is also reported to have contracted with a company specialized in developing commercial activities in the free zones in the south, to stimulate trade practices in the Southern free zone. Under the contract, an area of 12,000 square meters will be in service.
The authority said that investment in Iraq’s free zones recently saw a significant increase, reflecting investors’ trust in the projects in which they invest their money, which in turn has increased local and foreign companies’ demand for land.
Iraq has signed memoranda of understanding on trade with several countries. Some of these contracts include the establishment of free trade zones on the border. The semi-autonomous Iraqi Kurdistan region in the north announced last September that Turkey wishes to establish a joint free zone at the international border area in the northern Dohuk province.
The authority revealed plans to establish a free trade zone in the Babil province (roughly 60 miles south of Baghdad) to launch and support investment projects in the province. It said that this is designed to stimulate trade, industrial and service activities, and facilitate the transportation of goods between cities and provinces.
Under Iraq’s Free Zone Law, goods imported and exported from the free zones are exempt from all taxes and fees, except when imported through customs. Moreover, all capital, profits and income generated from projects invested in the free zones are exempt from any taxes and fees throughout the projects' lifecycle, including the construction and startup phases of the project.
The law creates the Free Zone Authority, an independent body at the administrative and financial levels. It is affiliated with the Ministry of Finance, and managed by a board of directors that consists of representatives of the ministries and agencies relevant to the free zones’ activity.