Financial Crime World

Iraq: Central Bank Issues New Regulation on Financing Small and Medium Enterprises

Strengthening the Country’s Financial Sector

The Central Bank of Iraq has officially issued a new regulation on financing medium, small, and micro enterprises by companies. Effective as of April 28, 2024, this regulation replaces previous instructions governing the operations of small and medium enterprise financing companies.

Key Changes

  • The minimum capital requirement for joint-stock companies has been increased to IQD 100 billion (one hundred billion Iraqi dinars), up from IQD 2 billion (two billion Iraqi dinars) previously.
  • Limited companies are no longer permitted to engage in financing medium, small, and micro enterprises.
  • The Central Bank will have the authority to audit and supervise these companies’ activities, ensuring financial stability in the country.

Additional Requirements

  • Regulated companies must establish specific administrative departments to oversee their operations.
  • Loan contracts, periodic financial statements, and online registration systems are now required.
  • Companies licensed before the issuance of the new regulation have been given a three-year grace period to align their operations with the new requirements.

Importance of Compliance

The Central Bank has emphasized that initial approval does not guarantee final approval, highlighting the importance of meeting all regulatory requirements. Local businesses are advised to take immediate action to ensure compliance with these new regulations.

As Iraq’s leading law firm, Al Tamimi & Company is committed to providing accurate and timely legal advice to help clients navigate this transition effectively. Our dedicated team in Baghdad has years of experience advising on financial regulations and compliance matters. We are well-equipped to guide you through this process and ensure a smooth transition.

Contact Us

For more information or guidance on the new regulation, please contact our office in Baghdad:

Al Tamimi & Company Iraq Office [insert contact details]