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LONDON, Monday, 26 September (KDC) - Guest
Author Zeki Fattah, Senior Economic Adviser to the
Kurdistan Regional Government (KRG), provides an
update on the draft investment law and the planned
industrial city.
Kurdistan is a land of plenty; it is endowed with a
wealth of natural resources and its population is
eager to live proudly and catch up with the advances
in world culture and development. The Region
stretches over 83,000 km and has a population of
nearly 5 million, comparable with the land mass and
population of Austria.
During the decade starting in 1992 the authorities
in Kurdistan managed to develop the region by
spending $200 per capita, monies collected mainly
through customs and trade taxes. Under the new
constitution, the Kurdistan Region will receive a
proportionately fair share of Central Government
revenues and per capita revenues are set to increase
6 fold. This will greatly accelerate regional
development with expenditure priorities to include
education, health, construction, communications and
urban and regional development.
The Kurdistan Regional Government is forging ahead
with legal, institutional, management and policy
reform. New legislation is being developed, under
international standards, to motivate
entrepreneurialism, attract investment and further
improve and protect the standard of living in the
region.
New Kurdistan Investment Law
The draft of the new Kurdistan Investment Law is now
before Parliament. This law, which applies to both
national and international investors, has
incorporated the experience and best practice of all
the countries in the region and can be considered as
the friendliest Investment Law in the region.
Companies will be exempt from income and property
tax for five years. The limit for enjoying these
exemptions is ID 50 million only.
All fixed assets including equipment, land, vehicles
and furniture together with imported raw materials
will be exempt from taxes. Similar exemptions are
also granted to expenditures on maintenance and
project expansions.
There will be no quotas or restrictions on how many
local people must be employed or restrictions on
capital invested when entering into partnerships.
All economic activities, except oil and gas, are
open to foreign investment; including banking,
education, healthcare, agriculture, manufacturing,
construction, trade and distribution.
All investments are immune from nationalization
All profits will be transferable.
Ownership of land and property is permitted and use
of local and foreign currency is allowed.
Investors are allowed to take their investment out
of the region and to sell and convert returns to
international currency.
Once the new investment law has been ratified, an
English translation of the full law will be made
available by the KDC.
Industrial City: Arat
Regional Government planning for the innovative
Industrial city, Arat, is at an advanced stage and
details can now be released.
The city will occupy nearly 42 million sq meters in
a location 25 km outside Erbil, near the water
project on the lower Zaab. The studies concerning
the Industrial City are expected to be supported by
the World Bank.
Half a billion dollars has been allocated to this
project which will be executed in stages. The first
stage would be to establish the building blocks for
establishing facilities across all industry sectors,
however specific priority will be given to
establishing at least fifteen building materials
manufacturing facilities.
During the second and third stages, more
sophisticated industries would be established
including facilities catering for the oil and gas
industries.
The city will also provide for a vast number of
plots that can be rented and developed by local
entrepreneurs and international investors.
In the initial stages, the Kurdistan Regional
Government will initiate investment activities in
the City however the main long-term aim is to draw
in the private sector through ownership of
industries and shares. Full information on the Arat
City plans and its composite stages and activities
will be made publicly available to the local and
international markets in the near future.
The Kurdistan Region in Iraq is at the threshold of
an era of stability and prosperity. The region's
share of the oil revenues in Iraq is to multiply
many-fold. With a population of nearly five million,
which is increasing steadily, government
expenditures on infrastructure, health, education,
ITC, industry, agriculture and services is to
increase enormously. This will raise the per capita
government expenditure and per capita income in the
region to well beyond the average in Middle Eastern
countries.
With an economic and social development policy that
emphasises developing the technical capabilities of
its human resources, the Kurdistan Regional
Government actively invites Foreign Direct
Investment, the establishment of joint ventures and
is heavily involving the private sector in its
development efforts. This is exemplified by the new
Investment Law and attractive incentives, which are
the most liberal in the Middle East.
www.kurdistancorporation.com
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