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New law allows foreign investors to own development land in Iraq

The once war torn country needs millions of new housing units in the next few years but also needs foreign investment to build them.

But archaic regulations and too much bureaucracy is believed to have put off many potential investors.

Now the Iraqi government is aiming to streamline the process and is actively encouraging foreign investment.

A number of Middle East based developers are already involved.

‘This is a huge achievement for everybody, the parliament, the cabinet and the Iraqi people.

This will remove many obstacles blocking the investment process in Iraq. Housing is a potentially huge growth industry,’ said National Investment Commission Chairman Sami al-Araji.

Previously the country’s real estate law only allowed foreign investors to lease land for a limited period of time.

Al-Araji confirmed that the new law will only cover the residential sector.

As well as millions of housing units for people living in the main cities in Iraq there is also a need for housing near holy sites which are visited by millions of pilgrims every year are and where hotel accommodation is limited.

Developers in the Gulf have already welcomed the news.

‘From the legal side, this is a step in the right direction.

We believe that Iraq holds value in real estate investment for developers in the Gulf,’ said Markus Giebel, chief executive at Dubai based developer Deyaar.

‘This is an interesting move and it may be timely because globally, real estate markets appeared to have bottomed.

Iraq is a fully fledged economy and while there are risks there, there are also good opportunities,’ said Saud Masud, head of research and senior real estate analyst, Middle East and North Africa at UBS in Dubai.

Iraqi leaders say that oil revenues will be plowed into infrastructure battered by years of war and sanctions, potentially creating more opportunities for developers.

The new law, which must now be approved by Iraq's presidential council, also aims to speed up the process of applying for investment licenses and to clarify federal and provincial powers when dealing with investors.