The Iraqi economy has been severely affected by war, and much of the country’s business infrastructure has been destroyed. That said, in recent years there have been signs of recovery, and businesses and entrepreneurs from across the world are beginning to recognise Iraq's investment potential.
Despite this, Iraq still fares poorly when it comes to international rankings for doing business. It is ranked 172 out of 190 countries in the World Bank’s Ease of Doing Business Survey 2020. This is testament to the bureaucratic and legal difficulties that are faced by businesses that want to set up operations in the country. Iraq scored particularly poorly when it comes to trading across borders (181), and getting credit (186).
While this doesn’t present an enticing picture for potential investors, there are still a number of foreign businesspeople who are establishing operations in the country. Those wishing to do business in Iraq will need to make an effort to gain some objective understanding of the Iraqi people. It’s only by operating with a degree of cultural sensitivity that international businesspeople will be able to enhance their business experiences in Iraq.
Sunday to Thursday, 9am to 5pm.
The official languages of Iraq are Arabic and Kurdish, but English is widely spoken in business circles.
Business dress should be smart and conservative. Suits are standard but wearing a tie is not necessary. Women should be particularly careful about covering up their arms, legs and hair in public.
Gifts are not necessary in business proceedings. If invited to a colleague’s home then flowers or chocolates are a good choice of gift. Do not give gifts that contain alcohol or pork.
Women's participation in the Iraqi workforce is low and progress towards equality is slow. The attitude towards expat women in business in Iraq remains conservative.
Business culture in Iraq
As a result of tensions in Iraq, there may be some hostility towards foreigners. It is therefore important that businesspeople in Iraq take the time to understand the local culture and etiquette and make efforts to build trust with Iraqi associates.
Those from countries that operate on egalitarian structures may find the hierarchical nature of Iraqi business difficult to deal with. It will be important to show respect to seniors if one wishes to be successful in Iraqi business.
Meeting and greeting people
Business dealings in Iraq are a formal affair. Only once a relationship has been established and counterparts begin to address expats by their first name, is it okay to do likewise. Otherwise, it is best to address business associates using formal titles.
When meeting business associates, expats should greet them with a formal handshake. Men must wait for a woman to extend her hand before making any gesture. If she doesn’t extend her hand, a simple nod of the head and a smile will suffice.
When first making acquaintance, Iraqi business people can be blunt and will often ask probing questions when trying to establish trust with a new business colleague.
Communication and language
Arabic is the official language in Iraq, but English is widely spoken in business circles. It is wise to learn some common Arabic greetings such as ‘Asalaamu Alaikum’ (peace be with you) and its response of ‘Wa Alaikum Salaam’ (and peace be unto you).
The concept of saving face and protecting honour are valued in Iraq. Consequently, showing emotion is viewed negatively. Voicing disapproval should also be avoided and if it becomes necessary this should only be done privately, quietly and with tact.
Expat entrepreneurs should understand that Iraqis take a person at their word, so they should never make a promise that cannot be kept. In order to show commitment without making firm assurances, use terms such as ‘I will do my best’ or the local term ‘Insha’Allah’ (God willing).
Due to the hierarchical nature of businesses in Iraq, the most senior person will take the leading role and manage a business meeting. Subordinates are expected to corroborate information, provide technical assistance and give advice to their senior in those meetings.
Expats should ensure that business agendas and information is translated into Arabic and sent to Iraqi business associates ahead of time.
Decisions are usually made by the most senior person after consulting with the relevant stakeholders and technical advisors who will be present at business meetings.
Expats may find business proceedings in Iraq to be both slow and frustrating as interruptions are common. It is also common for Iraqi business people to take phone calls during meetings. This should not be seen negatively and expats should be patient.