Economist details 9 major challenges facing US firms in Iraq

Baghdad (IraqiNews.com) – Iraqi economic expert Nabil Al-Marsoumi outlined nine structural challenges confronting American companies operating in Iraq on Wednesday, November 4, 2026, noting that these operational hurdles continue to restrict foreign direct investment and complicate Baghdad’s efforts to diversify international partnerships outside the traditional hydrocarbon sector. Al-Marsoumi structured the obstacles across three primary operating environments: 1. Legal and Regulatory Bottlenecks Contractual Disputes: Persistent deadlocks and difficulties in resolving disputes arising from contractual terms with state institutions. Absence of Dispute Resolution Mechanisms: The lack of streamlined, locally recognized international arbitration frameworks, resulting in protracted legal proceedings. Frequent Changes in Regulations and Directives: Continuous shifts in administrative rules and sudden regulatory revisions that destabilize long-term corporate planning. 2. Financial and Administrative Pressures Administrative and Financial Corruption: Bureaucracy and institutional rent-seeking that inflate the cost of doing business. Cumbersome Customs Procedures: Protracted border-clearance delays impacting the transit of essential equipment and technical supplies. High Tax Liabilities: Rising tariffs, fiscal duties, and aggressive tax assessments that compress operational profit margins. Difficulty in Accessing Financing: Underdeveloped local capital markets and a rigid banking sector unable to provide advanced corporate credit instruments. 3. Infrastructure and Field Operating Risks Power Supply Deficits: Ongoing instability in the national electrical grid, imposing heavy cost burdens for auxiliary power generation. Security Concerns and Arms Proliferation: Lingering security vulnerabilities and uncontrolled weapons that necessitate substantial expenditures on physical security and site protection. Al-Marsoumi’s diagnostic comes at a time when the federal government is attempting to attract Western enterprise to execute technical joint ventures in captured gas, modern transport networks, and urban logistics, underscoring that institutional and legal reforms remain critical prerequisites to safeguarding foreign private capital.