Iraq and the Swiss Confederation have signed a double taxation avoidance agreement to strengthen economic cooperation between the two countries, Baghdad Today reported on February 27.

Foreign investment in Iraq has increased in 2024, and 2025 is expected to beat the previous years for FDI; however, due to the fragmentation of Iraq, currency issues and corruption are rife. Switzerland is a major European investor in green technology and is also expected to help Iraq with wind and energy projects.

According to a Ministry of Finance statement, Iraq and Switzerland signed an agreement on February 26 to prevent double taxation and tax evasion of income and capital, aimed at enhancing economic cooperation between the two countries.

The Iraqi side in the negotiations was headed by Mohammed Hamza Mustafa, Director General of the Legal Department and Acting Director General of the General Tax Authority.

The agreement was backed by participation from several financial and legal officials, experts and a representative from the Iraqi Fund for Foreign Development.

The Ministry explained that "the agreement aims to provide an encouraging investment environment and reduce tax burdens on Swiss companies and investors, which contributes to strengthening trade and economic relations between the two countries, especially as the Swiss Confederation is an advanced country in the field of tax collection."

The cooperation is expected to attract Swiss capital, which is considered among the most important investments in the Middle East region, effectively contributing to advancing the development process in Iraq.

The Swiss Embassy in Baghdad was not available for comment when bnm IntelliNews contacted it on February 27.

Other European countries are also reviving relations with Iraq. Earlier in January, British companies, including oil major BP, announced renewed investment in the Iraqi market again thanks to mutual agreements between London and Baghdad signed earlier.

The initial GBP12.3bn partnership agreement between Britain and Iraq is expected to be backed by further contracts in the coming years. On the back of that agreement, companies, including emergency services manufacturers, have also signed agreements with Iraq for sales.

British manufacturers will supply 62 firefighting vehicles to Iraq's Ministry of Interior under a $31mn loan agreement from UK Export Finance (UKEF), marking one of Iraq's largest emergency services investments this century.