Below is an article published by Al-Monitor

The Kurdistan Region of Iraq is preparing to change its investment approach to focus on new areas of foreign and local investment — including tourism, agriculture and industry — after having focused exclusively on housing and oil for the past six years

Despite the fact that oil investments are the largest investments in the Kurdistan region, they fall outside of the investment law. These investments are carried out in a differ manner from those in business, industry and agriculture.

According to statistics obtained by Al-Monitor from the General Investment Authority in the Kurdistan Region, foreign and local investments have reached $24.5 billion across 521 projects extending over an area of 8500 acres in the region’s three major cities, Erbil, Sulaymaniyah and Dohuk

The regional government began granting licenses for investment projects after Kurdistan’s parliament issued Investment Law No. 4 in 2006.

The regional government opened the door to domestic and foreign investment after 2006. Previously, the region lacked a suitable platform for investment, primarily due to the fact that there were two administrations operating in the region. One was in Erbil, administered by Massoud Barzani's party, while the other was in Sulaymaniyah under the management of Jalal Talabani's party. These two merged into a single administration after 2005.

The Kurdish administration that was formed in 1992 split into two administrations following the outbreak of the civil war in 1994. This war was between the two ruling parties and lasted until 1998, when the leaders of these two parties, Barzani and Talabani, reconciled at the initiative of the American administration at the time. However, the region remained under the management of two administrations until 2005.

Kurdish oil, gas, and energy investments were not included in accordance with the region’s Oil and Gas Law.

Article 2, Section 2 of the regional Investment Law stipulates all fields of investment except for oil and energy, as it is not included in this law.

In a declaration, Minister of Natural Resources (i.e. the Ministry of Oil) in the Kurdistan Regional government Ashti Hawarmi said that there are around 50 foreign companies working in the oil and gas sector, which sees investments up until now of $15-$20 billion.

The Kurdistan Regional Government has thus far focused primarily on housing projects, which have expanded to reach 8,500 units. Oil and health projects have also been initiated, local hospitals and 5-star hotels have been built, and small projects have been funded through grants in the agricultural, industrial and banking sectors.

The government’s interest in housing projects and in building hotels reflects its desire to restore the region's destroyed infrastructure that was damaged by difficult economic conditions in the 1990s.

Since the 1991 Kurdish uprising  against the former Iraqi regime until its collapse in 2003, the region has despaired under the foreign blockade on Iraq and the Iraqi blockade on the Kurdistan region. This caused the region to fall behind in a number of fields, especially in housing development as evidenced by the enormous housing crisis. The crisis was felt even more after the economy approved during the post-Saddam era.

Norouz Mawloud, director of legal affairs at the investment authority, says that the housing sector has reached advanced stages. As a result, the focus is now shifting to three other vital sectors: agriculture, tourism and industry.

Over the past few years, several housing complexes have been built to provide people with limited income and governmental employees the opportunity to buy a house and pay for it in monthly installments. Young people have especially benefited, since they could pay just half of the house’s price in the beginning, and pay back the remainder through installments over ten years.

Figures from the commerce ministry in the region indicate that the number of registered foreign companies currently exceeds 2,000.

Kawa Wali Muhammad Ali, an economic analyst and academic in the faculty of business and economy at Saladin University in Erbil, says that the 2006 investment law encouraged investors by protecting their interests. “After the parliament approved the law and the regional government ratified it, many foreign companies entered the region," he told Al-Monitor.

Today, hundreds of projects are being implemented by foreign companies or investors,” he added.

Article 5 of the investment law provides that a project is exempt from all customs-related taxes and fines for ten years from the start date of providing services or starting production.

The article also provides a tax exemption for spare parts imported for a project, as long as their value doesn't exceed 15% of the value of machines and tools. Imported raw production materials are also exempted from customs duties for five years.

Foreign investments in Iraqi Kurdistan constitute between 37% and 47% of local investments, in addition to roughly 15% of shared investments. “We are bullish, but our ambition is for the rate of investments to increase even more," Ali says. "The Kurdistan Region of Iraq has wide spaces that are suitable for agriculture, in addition to natural touristic regions that can attract tourists, especially during summer.”

Ali adds that the region's new interest in agriculture, industry and tourism is very important, and he says investors should launch industrial projects in Erbil, Sulaymaniyah and Dohuk. "The government must focus on profitable industries and facilitate the conditions to implement such projects,” he says.