The Kurdistan Regional Government Announce Reforms for the Startup Scene
In 2021, Five One Labs, in partnership with the Consulate General of the Kingdom of Netherlands and Rwanga Foundations, published a Policy Recommendation Paper that included many points highlighting the challenges entrepreneurs and startups face on an ongoing basis. This project was a long-term commitment of all parties involved. Multiple revisits occurred, such as holding focus group discussions in December 2023 to make sure we pinpoint the applicable changes and improvements realistically.
From these revisits and based on the objectives of the project, we asked decision-makers at the Kurdistan Regional Government (KRG) to focus on taxes, registration from coworking space, and the rest of the reform points mentioned below.
Also, seeing the positive results from changes previously made to the business registration process was a reinforcement of the possibility of improving the startup scene in the region.
During the first International Innovation and Entrepreneurship Forum, organized by the startup ecosystem players of the Kurdistan Region of Iraq, including Five One Labs, Safeen Ghafour, Senior Advisor to the Deputy Prime Minister of the Kurdistan Regional Government, announced several changes in the business registration process to make it easier for entrepreneurs and potentially less intimidating to start taking the legal path of building a startup.
These changes in registering a business came after detailed discussions with entrepreneurs, lawmakers, and ecosystem players in the KRI to understand the fundamental changes needed to push the community toward entrepreneurship and make it easier for startups to be built and registered.
Based on that project and after more than two years of work, now entrepreneurs and startups of the community can benefit from the following decisions:
Startups can officially register from coworking spaces, and one address can be used for multiple startups].
The government will no longer have a profit estimation for taxing startups that do not make profits, and startups that have not profited will not need to pay 15% of the estimated profit.
Startups will be exempted from taxation for their first three years of operation.
Companies with Kurdish or Arabic names registered at either the Kurdistan Region or Federal Iraq can operate between both parts of the country.
Company registration costs will be reduced to as low as 63,000 Iraqi Dinars.
In the future, companies that have not been active for two years and haven’t caused any challenges to their surroundings can easily and officially close down their businesses.
Entrepreneurship and innovation will be mandatory parts of the university curriculums around the Kurdistan Region.
You can find the policy paper in our resources gallery.