The commercial agent in Iraqi law plays a vital role in regulating commercial activities linked to foreign principals operating within Iraq. This role is governed by strict legal conditions and licensing procedures designed to ensure transparency and protect the national economy.

This article examines the legal framework governing commercial agents, covering licensing requirements, registration procedures, and statutory obligations under the Commercial Agency Regulation Law No. 79 of 2017.

Section One: Conditions of the Commercial Agent and Procedures for Obtaining a License to Practice Commercial Agency Activities

The Iraqi legislator regulated the conditions of the commercial agent explicitly in the Commercial Agency Regulation Law No. 79 of 2017, considering them as essential conditions that may not be bypassed, and upon the fulfillment of which depends the granting of a license to practice commercial agency activities within Iraq.

First: Conditions of the Commercial Agent

Article (4) of the Commercial Agency Regulation Law No. 79 of 2017 stipulated the conditions that must be met by the applicant for a license to practice commercial agency activities, as follows:

1. The applicant must be Iraqi.

2. The applicant must have full legal capacity.

3. The applicant must not have been convicted of a felony or a misdemeanor involving moral turpitude.

4. The applicant must have a commercial office in Iraq to conduct his activity.

5. The applicant must be a member of one of the chambers of commerce in Iraq and have a registered trade name.

6. The applicant must not be an employee or assigned to public service.

7. The applicant must have at least one commercial agency contract, duly certified in accordance with the provisions of the law.

Second: Conditions of the Commercial Agent if the Agent Is a Legal Person (Company)

The legislator distinguished between the commercial agent as a natural person and the commercial agent as a legal person. Paragraph Second of Article (4) provides that if the applicant for the license is a company, it shall be subject— in addition to the conditions set forth in subparagraphs (d), (e), and (g) of item First of the same article — to the following conditions:

1. The company must be Iraqi.

2. The company’s capital must be owned by Iraqis at a rate of (100%).

3. The authorized manager must satisfy the same conditions stipulated in subparagraphs (a), (c), and (f) of item First of Article (4).

It is noted that these conditions aim to emphasize the national character of the commercial agent, whether a natural or legal person, to prevent the combination of commercial agency activities and public employment, and to ensure integrity and independence in the practice of this activity.

Third: The Opinion of the State Council Regarding the Capital Ownership Requirement

A dispute arose regarding the interpretation of Paragraph Second of Article (4) of the law concerning the extent of the requirement that Iraqi ownership of capital be (100%), and whether this requirement applies only to the direct owners of the applicant company, or extends to include the shareholders of companies owning it.

Based on a request submitted by the Ministry of Trade to the State Council under its letter No. (M.W/8723) dated 21/4/2025, for the purpose of interpreting the aforementioned provision, the State Council issued its Decision No. (91/2025) dated 23/6/2025, which concluded the following:

“It is required that the company wishing to register a commercial agency be an Iraqi company, and that its capital be owned by Iraqis at a rate of (100%), and this requirement does not extend to the shareholders of the companies participating in its ownership.”

The State Council based this opinion on Article (23) of the Companies Law No. 21 of 1997, which provides that:

“A company established in Iraq in accordance with the provisions of this law shall be Iraqi.”

In addition to the general principle that a company enjoys an independent legal personality separate from its shareholders, which prevents conflating the nationality of the company with the nationality of its partners or shareholders.

This opinion is of significant practical importance, as it contributed to unifying administrative application of the legal text and removing ambiguity regarding the capital ownership requirement, thereby achieving a balance between legal regulatory requirements and encouraging indirect investment in Iraqi companies.

Section Two: Procedures for Obtaining a License to Practice Commercial Agency Activities

The Iraqi legislator regulated the procedures for obtaining a license to practice commercial agency activities in Article (5) of the Commercial Agency Regulation Law No. 79 of 2017, within a specific procedural and time framework, in a manner that achieves a balance between facilitating administrative procedures and ensuring that commercial agency activity is subject to legal oversight.

First: Submission of the License Application

The procedure for obtaining a license to practice commercial agency activities begins with the applicant submitting a request to the Companies Registrar, accompanied by documents proving the fulfillment of the conditions stipulated in Article (4) of the law, whether the applicant is a natural person or a legal person.

This application constitutes the legal basis upon which the competent authority initiates verification and review procedures.

Second: Decision on the License Application

The legislator vested the Companies Registrar with the authority to decide on the license application. The Registrar is required to issue a decision within ten (10) working days from the date the application is registered as received.

If the Registrar remains silent after the expiration of this period, and the application fulfills the legal requirements, such silence shall be deemed a constructive approval of the application.

In the event of an explicit rejection, the law requires that the decision be reasoned, to ensure transparency of the administrative decision and to enable the applicant to exercise the right to grievance and appeal.

Third: Grievance Against the Rejection Decision

The law permits the applicant to submit a grievance against the rejection decision before the competent minister within thirty (30) days from the day following the date of notification of the rejection decision.

The minister shall decide on the grievance within ten (10) working days from the date it is registered as received. The silence of the minister after the expiration of this period shall be deemed a constructive rejection of the grievance.

The minister’s decision, whether explicit or implicit, is subject to appeal before the Administrative Judiciary Court, in accordance with the provisions of the State Council Law, thereby providing a judicial guarantee for reviewing the legality of the administrative decision.

Fourth: Issuance of the License

The Companies Registrar shall issue the license to practice commercial agency activities upon fulfillment of the conditions for granting it, in accordance with a form prepared for this purpose, after the applicant has paid the prescribed legal fees.

Upon issuance of this license, the commercial agent acquires the legal status that authorizes him to practice commercial agency activities within Iraq in accordance with the provisions of the law.

Fifth: Renewal of the Commercial Agency License

The legislator obligated the commercial agent to renew the license to practice commercial agency activities periodically, to ensure the continued subjection of this activity to legal oversight.

Article (6) of the Commercial Agency Regulation Law No. 79 of 2017 expressly provides:

“The commercial agent shall submit an application to renew his license annually within the first sixty (60) days of the beginning of the year, regardless of the date of issuance of the license or the date of its last renewal.”

It is understood from this provision that the obligation of annual renewal constitutes an independent legal obligation unrelated to the date of granting the license or its last renewal, and that its purpose is to verify the continued fulfillment of the legal conditions by the commercial agent and the continued legality of practicing commercial agency activities within Iraq.

Failure to comply with this obligation entails the legal consequences stipulated by law, which will be addressed when examining the mandatory nature of these conditions and the effects of non-compliance.

Section Three: Duties of the Commercial Agent

The Iraqi legislator subjected the commercial agent to a set of legal duties aimed at regulating commercial agency activity and ensuring transparency, as well as sound administrative and financial oversight. These duties are stipulated in both the Commercial Agency Regulation Law No. 79 of 2017 and the instructions issued thereunder.

First: Obligations Related to the Disclosure of Commercial Agency Information

Article (2) of the Instructions for Facilitating the Implementation of the Commercial Agency Regulation Law stipulated several obligations imposed on the commercial agent, most notably:

1.The commercial agent is required to affix the trademark, trade name, commercial agency number, and the producer’s name on all imported materials.

This obligation aims to demonstrate the legal status of the commercial agent and to enable the competent authorities and consumers to verify the legality of importation and the source of goods or products offered in the Iraqi market.

2.The instructions permit the registration of agency contracts limited to the practice of maintenance activities, supply of spare parts for goods or products, or the provision of after-sales services, provided that such activities are carried out on behalf of the foreign principal.

This indicates that the commercial agent’s obligation is not limited to sale or distribution, but may be confined to post-sale services, and such activities remain subject to the provisions of the Commercial Agency Law whenever its conditions are met.

Second: Obligations Related to Keeping Books and Records

The legislator obligated the commercial agent to keep special financial records. Article (11) of the Commercial Agency Regulation Law No. 79 of 2017 provides the following:

1.The commercial agent shall keep a special register free from erasures, scratching, overwriting, or unjustified blanks, in which the amount of profit or commission earned shall be recorded, along with the amount transferred to Iraq through authorized entities and its proportion to the value of concluded transactions, in addition to recording all commercial transactions conducted on behalf of the principal.

2.The agent is required to present the aforementioned register to the Companies Registrar Department – Commercial Agencies Section – upon opening it, for the purpose of recording the number of its pages and stamping each page, and at the end of each year for certification of the number of pages used and endorsement of its closure on the last page. The agent is also required to submit this register to the General Commission for Taxes at the end of each fiscal year.

This obligation aims to strengthen financial and tax oversight over the commercial agent’s activity, ensure disclosure of profits and commissions resulting from commercial agency activities, and prevent any practices that may undermine transparency or the tax system.

Accordingly, it is evident that the duties of the commercial agent are not limited to executing the contractual relationship with the principal, but extend to include regulatory, financial, and administrative obligations, reflecting the special nature of the commercial agency contract and its subjection to state supervision in protection of the national economy and regulation of commercial activity within Iraq.

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