With growth figures that are among the highest in the world, Iraq is an interesting market for foreign companies. But the complexities of a post-conflict environment require good planning before moving forward. Here are some of the practicalities that companies need to consider before doing business in the country.
* An extensive plan is pivotal ahead of entering the Iraqi market. Prepare to invest a great deal of work and thought in planning for how to execute your strategy; issues such as rules of engagement with local businessmen, suppliers and contractors needs to be reviewed in detail.
* Travel and accommodation: it is important to understand the demanding logistics surrounding business trips and living.
* Visas: if your company employs non-Iraqis, visa issues can take time, which means that businesses should plan their travels well in advance. Letters of invitation tend to help a lot. Ultimately, however, visas for entry to Iraq and Kurdistan are seldom a problem. An often bigger challenge emerges when Iraqis working for a foreign business apply for visas to get into the UK, the US and other European countries. Phillip Kennedy, Managing Director Eschmann Holdings, explains that his company was forced to train doctors in Lebanon instead of bringing them to the UK where the main part of their business is located, resulting in unnecessary hassle and administration.
* When it comes to offices, the situation is improving but a lot is still missing in terms of facilities (electricity etc.) and communications (Internet etc.).
* Talking to ministries is a good start, but do not forget about local government since a lot of work passes through them as well.
* Staff is still paid in cash.
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* The National Investment Commission is often eager to assist, so make sure to contact them.
Working with local partners and staff
* Working alone or in a partnership? According to Abdul Tamer, Country Senior Partner PWC, this depends on the industry you are active in. For example, with gas and oil companies he would not recommend a sudden influx of operations in the market without external advice.
* Tamer suggests that “if your business will involve hiring a local workforce or actually working with an existing workforce, you need a plan on how to deal with that. The Iraqi workforce is very hungry to learn from experience from foreign firms, so one should absolutely have a plan how to address that.”
* Companies such as Shell and Mott MacDonald have continuously worked with local staff.
* According to Hans Nijkamp, Vice-President and Country Chairman Iraq at Shell, “the reason to enter into a partnership with an Iraqi company has to do with good business. Since acceptance of foreign companies tend to be a sensitive issue, it really comes down to how your business acts on the ground – because it will get noticed.“
* Shell provides health care and scholarships for training. In a few years time, Iraqis offered such an opportunity will be qualified for a job with Shell. A win-win situation for both parties.
* Gordon Turley, Iraq Country Manager and Regional Director Mott MacDonald, underlines that 90 per cent of their workforce in the country is now Iraqi. He explains, however, that ethnic profiles can be an issue depending on the region.
The above advice is based on the discussions at the Middle East Associations’ conference “Iraq: Untapped Opportunities” that was held in London in November 2011.