FAQ

Yes. Foreign companies can hire employees in Iraq, but they must comply with Iraqi employment, tax, social security and, where applicable, foreign-worker and work-permit requirements.

A foreign company does not necessarily need to establish its own Iraqi legal entity to engage employees through an Employer of Record (EOR). Through an EOR arrangement, Shull Solutions can act as the local legal employer, employ the workers in accordance with applicable Iraqi requirements, manage payroll and statutory obligations, while the client retains responsibility for the employee’s day-to-day work and business activities.

For foreign nationals, Iraqi Labour Law No. 37 of 2015 requires a valid work permit before a foreign worker can legally work in Iraq. Articles 30 and 31 specifically prohibit employing or engaging a foreign worker without the required work permit.

Note: Employment requirements can differ between Federal Iraq and the Kurdistan Region, particularly regarding work permits, residency and local administrative procedures. Shull Solutions supports employers across both jurisdictions.

For Iraqi nationals, employment onboarding can generally be completed within 3 business days once all required employee information and documents are available. For foreign employees, the timeline depends on the applicable work permit, residency and immigration procedures.

There is no statutory Iraqi Labour Law timeframe requiring an employer to complete EOR onboarding within a specific number of days. The practical timeline therefore depends on the employee’s nationality, location, documentation, employment requirements and whether immigration or work-permit approvals are required.

For foreign employees, work cannot legally commence until the required work permit has been obtained.

At Shull Solutions, we coordinate the employment documentation, statutory registrations and applicable work-permit or immigration procedures to make onboarding as efficient as possible.

Employees in Iraq are generally subject to personal income tax on employment income, together with applicable employee social-security contributions. The exact amount depends on the employee’s work location, taxable income, applicable allowances and statutory deductions.

For example in Federal Iraq, current personal income tax rates on employment income are progressive:

Applicable personal and family allowances and qualifying deductions are taken into account when calculating taxable income.

Social security is separate from personal income tax. Current published guidance indicates an employee contribution of 5%, with the employer generally contributing 12%; higher employer contributions can apply to employers classified as “prime.”

Shull Solutions calculates and administers the applicable deductions as part of the payroll process and ensures that statutory payments are handled in accordance with the applicable requirements.

Under an EOR arrangement, Shull Solutions manages the formal termination process as the legal employer, based on the client’s instruction and in accordance with the applicable employment contract and Iraqi labour law.

The client normally initiates the business decision—for example, because of performance, restructuring, redundancy or the end of an assignment—while Shull Solutions manages the legal and administrative process.

Depending on the circumstances, the termination process may include:

• Reviewing the contractual and statutory termination requirements
• Providing the required written notice
• Preparing termination documentation
• Calculating outstanding salary and benefits
• Calculating applicable end-of-service entitlements
• Completing statutory notifications and deregistration
• Managing work-permit/residency procedures for foreign employees
• Issuing the employee’s final settlement

Under Federal Iraqi Labour Law No. 37 of 2015, certain termination situations require written notice, and the notice period must generally be at least 30 days. The law also provides for an end-of-service gratuity of two weeks’ wages for each year of service, subject to the statutory exceptions.

For foreign employees recruited to work in Iraq, the Labour Law also contains specific provisions concerning the employer’s responsibility for return travel in certain circumstances.