The ruling removes a sweeping measure dating from 1994, while leaving investors subject to Iraq’s constitutional and statutory framework.
On 27 October 2026, Iraq’s Federal Supreme Court ruled unanimously that Revolutionary Command Council Decision No. 23 of 1994, as amended by Decision No. 33 of 1997, was unconstitutional. The case was brought by the Prime Minister in his official capacity against the Speaker of the Council of Representatives in the Speaker’s official capacity. The Court said the decision violated Articles 23(Third)(A), 25 and 26 of the 2005 Constitution. Under Article 94, its judgment is final and binding on all authorities.
The challenged decision had suspended laws and regulations that permitted non-Iraqis to own property or invest in companies in Iraq. It also imposed imprisonment for violations—one to three years generally, with a minimum two-year sentence for Iraqi violators—and provided for confiscation of property acquired or investments made contrary to its terms.
Constitutional basis and scope
The constitutional provisions cited by the Court address distinct but related subjects. Article 23(Third)(A) protects the right of Iraqis to own property throughout Iraq and provides that non-Iraqis may own immovable property only where the law permits. Articles 25 and 26 require the State to pursue economic reform, develop the private sector and encourage investment.
The decision is significant because it removes the 1994 measure and its amendment as a blanket restriction. It should not, however, be read as creating an unrestricted right for foreign nationals to acquire property or invest in every sector. The constitutional provision on immovable property continues to make non-Iraqi ownership dependent on statutory authorization, and the applicable investment, company, property and sector-specific rules remain relevant. The Investment Law No. 13 of 2006, as amended, provides a framework for investment privileges and obligations, including rules that apply to land and licensed projects.
Practical implications for investors
For businesses considering investment in Iraq, the ruling is an important development in the constitutional framework. It may improve legal clarity by removing a longstanding measure that had obstructed forms of foreign ownership and investment recognized under other laws.
The practical analysis will still depend on the proposed transaction: the type of asset or investment, its location, the investor’s structure, any licensing requirements and applicable sector rules. Investors should confirm the relevant approvals and registration steps before acquiring assets or committing capital. Our Corporate & Commercial Law and Company Formation & Compliance teams advise on structuring, licensing and registration in Iraq.
The Court’s public statement does not set out a detailed implementation protocol or address the treatment of past prosecutions, confiscations or registration decisions made under the invalidated measure. Parties affected by earlier enforcement, or with pending applications or disputes, should assess their position under the judgment and applicable procedural rules, with support from our Dispute Resolution & International Arbitration team where needed. Further commentary on the ruling is available from Kadhims.
Looking ahead
The ruling establishes a clear constitutional outcome for Decision No. 23 of 1994 and its 1997 amendment. Its wider commercial effect will depend on consistent implementation by the authorities responsible for investment approvals, company matters and property registration. Greater certainty will be valuable to investors, but each proposed investment will continue to require a careful review of the Iraqi legal framework that applies to it.
This article is for general information only and does not constitute legal advice on any specific investment or transaction.