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New Free Zone Created In Iraq

by Lorys Charalambous,, Cyprus

31 October 2012

Iraq’s General Authority for Free Zones, which is under the Ministry of Finance, has entered into an agreement with Basra International Oil and Gas Hub (BIOGH) to set up a specialized oil and gas Free Zone at the port of Khor Al-Zubair.

The deal includes tax exemptions for the term of the agreement as well as other benefits. BIOGH is a private company which was advised by the international law firm DLA Piper.

Although located within Iraq, companies established inside free zones are regarded as operating outside the territory of Iraq. At the existing Khor Al-Zubair Free Zone, there are no Iraqi taxes on business profits or on the salaries of foreign employees, and the salaries of Iraqi employees are 50% tax-free. Further, imports and exports by Free Zone projects are exempted from customs, and there are no charges for the repatriation of capital and profit. License durations are for 25 years for manufacturing projects, with an option to extend for a further 25 years.

On completion, it is planned that the BIOGH development will cover an area of 11 million square meters, and it will be the second largest oil and gas Free Zone in the world. The project will also provide sites for the expanding manufacturing, storage and servicing needs of Iraq’s oil and gas sector.

As well as the existing Free Zone at Khor Al-Zubair, Iraq has Free Zones at Ninevah/Flaifil, Al-anbar/Qaim, and Sulaymaniyah/Northern Iraq.

TAGS: tax | business | tax incentives | law | employees | Iraq | oil and gas | manufacturing | trade | free trade zone

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