Determined to shake off its postwar distress and rebuild, Iraq passed a special deregulation for foreign-invested projects, such as the massive landmark housing project led by a Korean builder.

The regulation bill to exempt taxes and levy for national investment projects, which was ratified by the Iraqi Ministry of Finance in July, is soon to take effect once the related enforcement ordinance is promulgated, according to local media.

One of the key purposes of this unprecedented regulation is to facilitate the business processes of the Bismayah New City Project, officials said.

The $8 billion project, which involves the construction of 100,000 residential units in what is to become the largest satellite city of Baghdad, is led by Hanwha Engineering & Construction.

“Business transactions in Iraq would often be delayed for as long as two to three months, due to the lack of infrastructure and customs system,” said a Hanwha official.

Also, the loss of documents has been a major issue as the current system demands that investors submit the original documents instead of emailed copies.

The deregulation bill, once effectuated, will not only alleviate the procedural requirements but also set up specific due dates for each step and allow the emailed transmission of documents.

“Such unprecedented business favors show how determined Iraq’s Nouri Kamil Al-Maliki administration is to bringing visible changes to the country,” he also said.

Al Sabaah, the largest daily in the Gulf country, also described the bill as proof of the Iraqi government’s eagerness to invite foreign investors.

“This will act as a chance to dispel the negative image that foreign investors have of Iraq and its business infrastructure,” said Sami R. Al-Araji, chairman of Iraq’s National Investment Commission.

The bill was drafted earlier this year by a joint working group consisting of Hanwha officials, NIC members and industrial experts.

It was then submitted by the NIC to the council of ministers, where it was almost immediately approved and delivered to the Ministry of Finance for final ratification.

“This was a unique way of cooperation between foreign investors and a government agency,” said an official of the NIC.

The legislation was largely triggered by Hanwha chairman Kim Seung-youn, who demanded last year that the Iraqi prime minister devise necessary solutions to ease the difficulties in implementing the Bismayah project.

“Prime Minister Nouri Kamil Al-Maliki and Kim are maintaining a trusting relationship,” said Kim Hyun-chung, vice chairman of Hanwha E&C and head of the joint working task force.

His words came in response to the concerns over the status of the group chairman, who earlier this year was handed a three-year jail term for embezzlement and breach of duty.

The vice chairman also expressed satisfaction over the Iraqi administration’s active support and said that it will help potential investors change their past prejudice of Iraq, according to officials.

In 2010, the Iraqi government announced its National Housing Program to create 1 million new residential units and related infrastructure, as part of its long-term nation reconstruction plan.

The government is planning to invest some $275 billion in housing, transportation, energy, information technology and security by 2017, officials said.

By Bae Hyun-jung (tellme@heraldcorp.com)