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Iraq's economy is dominated by the oil sector, which has traditionally provided approximately 90% of foreign exchange earnings. The crude oil resources of Iraq are estimated to be the world’s third largest, after Saudi Arabia and Iran, and are far from being fully explored. In addition, Iraq has one of the largest proven reserves of natural gas, of which more than two thirds lie in the Basrah region. Due to the wars and the consequential destruction, infrastructure and constructions are in such a dilapidated state that the Iraqi prosperity of the pre-wars era can hardly be imagined.


In recent years, there have been many attempts to improve and repair the infrastructure of Iraq. These efforts have primarily focused on central elements of the infrastructure, such as water supply systems, sewage treatment plants, electricity production, hospitals and health clinics, schools, housing, and transportation systems.

Now that Iraq’s security situation is stabilizing (even though there are regular backlashes), the rising price of oil is boosting the earnings of the state, and talks on a bilateral investment protections and investment incentive agreements are proceeding. As a result, trade and investments should increase significantly.


The extreme backlog within the construction sector cannot be met by local suppliers only.

Due to the sluggish development and altered state of the industry, an import of products and services in the building industry and orders to international contractors are compulsory, while being also the most efficient way of meeting the high demand. For this reason, imports and foreign investments are an extremely important part of the Iraqi economic policy. This offers specialized and capable companies the possibility of participating in the call for tenders in Iraq, which is a considerable potential market.

Market Entry

Although Iraq’s demand for international investments and imports is very high, and the “Made in Germany” brand is still a symbol of quality in Iraq, the initiation and handling of business activities is highly complicated.

The reasons vary on a situational basis, but range from the complex and specific ministerial regulations in tender invitations (requiring special know-how and experience) to issues of financing and export guarantees, and from risks of the de facto import and transfer of goods to security aspects.

To avoid problems in the mentioned areas from the outset, or to rapidly allay them, local partners or individual on-site subsidiaries are of vital importance.

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