Entrepreneurs and Small Business Initiatives in the Kurdistan Region


On Wednesday, May 24, 2023, the Rudaw Research Center and Five One Labs, with the participation of entrepreneurs, small business owners, university teachers, and experts, conducted a closed roundtable discussion titled "Scaling Your Business: Strategies and Best Practices for Sustainable Growth in KRI" in Erbil.

At the roundtable, three main topics related to young entrepreneurs and the situation of small businesses were discussed, including the small business environment "Business Initiative" in the Kurdistan Region, how to create opportunities for young people to establish small businesses, and how to create a sustainable environment for entrepreneurs in the Kurdistan Region.

In the beginning, the participants pointed to the problems faced by entrepreneurs and those who start their businesses in the Kurdistan Region, hampered by the lack of a solid modern economic infrastructure and the weak implementation of governmental administrative tasks. Above all, the company registration system in the Kurdistan Region, which takes a long time and reaches approximately one year to be completed, has a problem with choosing company names, the existing business categories, and taxation. These do not encourage an efficient support system in the Kurdistan Region for someone deciding to establish their startup.

Regarding the registration of companies, one of the critical issues mentioned was the existence of two systems and two company registrations in Erbil and Baghdad. For example, a company is registered and operates in the Kurdistan Region. Still, if it wants to work in the middle and south of Iraq, it must re-register in Iraq, meaning it must pay taxes and other customs twice. And this is a massive burden for entrepreneurs and the small business initiative environment.

Despite the need for a robust and digital system for company registration in the Kurdistan Region, it is different and more efficient than the Iraqi government's registration process. For example, the name of a company in Baghdad is only accepted in Arabic, and it takes more than a year to be completed.

In addition, there are other factors, such as a lack of financial support for startups, digital banking systems, electronic payments, and specialized talents despite the large number of young people who have not received the right skills at university to manage different departments of finance, marketing, cyber security, human resources, sales, etc. 

Another point of interest is receiving financial support from banks. Participants mentioned that for entrepreneurs to take a loan from the bank to start a business, they must submit (land or other property) as collateral worth three times the loan amount. In contrast, if a young person has that capital and property, they do not need to borrow from the bank.

Another point of discussion was about the tax system and how tax is paid in the Kurdistan Region. Experts and business owners agreed that it is not a helpful process and does not support the development of the entrepreneurial environment in the Kurdistan Region because the guidelines are constantly changing, which makes companies unable to continue their work.

During the discussions about the challenges facing entrepreneurs and young people who want to start small businesses, it was noted that the Kurdistan Regional Government (KRG) is working to establish digital infrastructure, change the way companies register, and change the social security (employee insurance) of the private sector. These will be digitalized and announced in the coming days and months. For example, of the 38,000 companies in the Kurdistan Region, only 10% to 15% provide social care to their employees.

In addition, the lack of a digital banking system and the lack of community awareness for using technology are the main challenges of entrepreneurs in the Kurdistan Region because when they have an international client, they have a problem receiving money and monitoring foreign taxes in the transfer of funds. The discussion pointed out that the success of entrepreneurship and small businesses initiative worldwide is related to the Internet and technology. But these do not work here, and ultimately the cash system wins. Also, the Kurdistan Region's market is tiny, so to offer services in a larger market, the infrastructure of the payment system must be changed, which provides great ease and excellent support for young people.

Another interesting opinion in the discussion was that the environment in Iraq and the Kurdistan Region for entrepreneurs and startups is very supportive, which is an environment that needs to be protected and financially supported so entrepreneurs and businesses can continue to thrive. The participants also noted that we should change how we help entrepreneurs and startups. We should keep and fund startups promising to be suitable to the Iraqi and regional markets, and the entrepreneurs' personalities should also be considered when funding a startup.

The participants also agreed that to build the right environment for entrepreneurs, there should be a cooperative working environment between different institutions, especially international organizations, banks, and business people who provide financial support to entrepreneurs, universities, and educational centres to build a new environment for young people, reducing the failure risks of launching a new business. Furthermore, the development and sustainability of the company and small business environment will significantly support the Kurdistan Region and the government, which will be achieved by providing a healthy economic environment.

Finally, the participants presented several points as suggestions for improving the entrepreneurial ecosystem in the Kurdistan Region:

- Building coordination between different institutions, above all, universities and institutions such as Five One Labs, to create a new entrepreneurial environment in the Kurdistan Region.

- The importance of media and television centres to turn the community's attention to purchasing local products.

- Changing the university curriculums because the current system creates employees rather than entrepreneurs and a generation capable of building startups.

- Not only supporting entrepreneurs and small businesses but also training people on different types of financial skills, legal expertise, and expertise needed for today's market.

- New, digital solutions and reducing routine registering businesses and companies encourage the entrepreneurial environment. 

- To reduce economic, political, and security risks so that entrepreneurs and business initiatives can receive financial support from outside institutions such as the World Bank and others.

- Regional VCs should be introduced to Iraq and motivated to invest in Iraqi startups.

- The government should create laws that, for example, exempt startups from paying taxes for the first number of years to support the ecosystem and help the startups use that extra money to become fully established.

- Spreading the mindset of investing in startups among local businesspeople. 


Nali Bahaulddin – Economic and Political Officer at the Netherlands Consulate General in Erbil

Rebean Al-Silefanee – Director of the Creativity and Entrepreneurship Centre at the University of Kurdistan Hewler

Hedi Kamala – Entrepreneurship Consultant

Sara Salahaddin – Executive Director of Vision Education

Renas Nabee – Founder of Breakfast and More

Ameer Salih – Founder of IQ Cars

Anna Lukianova – Head of Marketing and Business Development at Wedo Academy

Mohammed Jesus – Co-founder of Grei Agency

Azheen Abdulrahman – Founder of Winsome

Ahmed Salih – Co-founder of Kurdivia

Mohammed Baker - Co-founder of Kurdivia

Blend Kurdo – Business Development Manager and HR Consultant at Tiller

Lozan – Show Market Application Manager

Aryan Muhammed – Founder of Full Stop

Dilpak Mohamed – Founder of Healthy Pak

Elaf Attar – Junior Community Officer at Five One Labs

Ziryan Rojhelati – Director of Rudaw Research Center

Dler Mohammed - Public Relations Professional at Rudaw

Mahmood Baban – Research Fellow, Rudaw Research Center 


June - 2023
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