M&A in Iraq: Legal Considerations in Asset Deals

4 min 5 sec

Written by

Aro Latif Omar

Senior Associate

a.omar@tamimi.com View LinkedIn Profile

Shangar Hussein

shangar.hussein@tamimi.com View LinkedIn Profile

This article considers some of the key legal aspects that commonly arise in structuring and implementing asset deals in Federal Iraq.

In Iraq, there is no standalone M&A code dealing specifically with asset acquisitions. The legal framework is derived from various statutes, including the Companies Law No. 21 of 1997; the Civil Code No. 41 of 1951; the Labour Law No. 37 of 2015; the Trademark Law No. 21 of 1957; and the Competition and Antitrust Law No. 14 of 2010.

Depending on the target business, the authorities that may become relevant include the Companies Registration Directorate; the Notary Public (Machinery Department); the Ministry of Labour; and, in some cases, the Competition and Antitrust Council.

Internal corporate steps

Before an asset disposal is implemented, the parties typically review whether the necessary internal approvals have been obtained and whether the relevant signatories hold authority to enter into any asset transfer agreement. Depending on the company’s structure and constitutional documents, this may involve shareholder or general assembly approvals and a review of restrictions affecting the disposal of substantial business assets.

The corporate file of each party is also typically checked to ensure it is current with the competent authorities and does not have obvious deficiencies in core compliance records. In practice, gaps in taxation, social security, or other key filings can obstruct the filing of prerequisite resolutions and generally delay completion mechanics or affect implementation. Licences, permits, and operational registrations are also commonly reviewed early to assess whether they are transferable, require amendment, or will need to be replaced after closing.

Transfer of tangible assets

The transfer mechanics for tangible assets depend on the category involved. Inventory is usually transferred through a documented handover process supported by stock counts, condition records, and agreed valuation methodology.

Vehicles and heavy machinery raise a separate administrative issue, because contractual agreement alone does not complete the transfer. Re-registration of the new owner before the Directorate of Traffic (for commercial vehicles) or the Notary Public (Machinery Department) forms a separate implementation step with its own documents and timing.

An asset register is typically prepared at the outset of the process, setting out the ownership position in respect of each asset, any security interests subsisting over them, and any third-party rights capable of affecting or encumbering their transfer.

Contracts, leases, and business continuity

In an Iraqi asset deal, contracts do not necessarily move with the business by default. Each material agreement may require separate review to determine whether assignment is permitted and whether consent, waiver, or notification is needed from the counterparty.

Depending on the drafting, landlord consent or formal notice is typically needed before occupation rights can pass to the buyer. Branding issues also need to be addressed expressly, particularly where the seller’s trade name or marks are not part of the agreed transfer perimeter.

Employment considerations

From an employment perspective, employees should generally be treated as a dedicated workstream and addressed separately as part of the overall transaction structure. In practice, amicable termination of existing employment contracts, coupled with simultaneous re-engagement by the buyer on agreed terms, is typically the most straightforward and commercially preferred approach.

There are arguments that, under the Labour Law No. 37 of 2015, employees may transfer automatically in the context of an enterprise sale, and an asset transfer could arguably meet the threshold of an ‘enterprise sale’ for the purposes of that law. However, this position has not been robustly tested in practice and will need to be assessed carefully on a case-by-case basis, having regard to the specific circumstances of the transaction.

Regardless of the approach adopted, statutory entitlements must be closely and carefully adhered to in order to avoid lingering liability for the outgoing employer. This generally includes ensuring that all outstanding salary and other accrued statutory payment entitlements are settled and documented prior to or at the point of completion. Failure to do so risks the former employer remaining exposed to claims, notwithstanding the transfer of the business.

Competition considerations

The Competition and Antitrust Law No. 14 of 2010 is potentially capable of applying to an asset transfer. Whether a given transaction gives rise to a filing obligation or a substantive competition concern will depend on the sector, the parties’ market positions, and the practical effect of the transfer.

This is an area that has grown more relevant in recent years, as the Competition and Antitrust Council has become increasingly active. This trajectory was underscored in October 2025, when the Council published its first publicly available guidance since its establishment in July 2023: a procedural guide on the impact of mergers and restrictive commercial practices on companies operating in the Iraqi market (the Guide).

The Guide signals a meaningful shift toward more active enforcement, outlining review windows, registration requirements, and penalties for non-compliance, though the precise scope and timing of implementation remain imprecise. Competition review should therefore be treated as a material consideration in any Iraqi asset transaction, with each deal assessed carefully on its own facts.