By M. Gharib Ali Salim
Introduction:
Developing a modern economy and diversifying the Kurdistan Region’s income away from a single source (oil) requires serious attention to non-oil sectors capable of creating jobs and attracting capital. In this context, the tourism sector is viewed as a vital national strategy, the success of which depends on a robust and encouraging legal framework for investors.
Based on this principle, the Investment Law in the Kurdistan Region has been designed to treat the tourism sector with unique and preferential status. While most industrial and commercial sectors receive support only during their initial establishment phase, the tourism sector receives continuous support. This ongoing legal backing reflects the primary vision of the Kurdistan Regional Government (KRG) to provide full incentives for sustainable tourism development.
A key feature of this law is that tourism projects (such as hotels, tourist villages, corniches, and theme parks) are entitled to benefit from customs exemptions every three years for the import of goods and equipment. In the hospitality industry, “renewal” and “aesthetic appeal” are the keys to remaining competitive; therefore, this provision reduces investment costs and ensures that service quality remains high.
First: Growth of the Tourism Sector and Market Leadership:
Legal support and the creation of a favorable environment have been the primary factors in the significant progress of the tourism sector in the Kurdistan Region. According to data across provinces and independent administrations from 2019 to 2024, a total of 84 major tourism projects were completed, with investment totaling $7,555,305,348. This statistic confirms that investment capital in the tourism sector, at 38.7%, ranks first ahead of all other investment sectors in the Region. Consequently, tourism alone accounts for approximately 14% of the total number of investment projects carried out in the Kurdistan Region, highlighting the true scale and importance of this sector in Kurdistan’s economic map.
Geographic Distribution of Licenses and Investment Capital:
To understand how this significant capital is directed, the data in Table (1) illustrates the reality of services and investment volume at the level of provinces and independent administrations:
1. Erbil Governorate: Ranks first and holds the lion’s share with 110 licenses, a capital of $10,220,815,101, and an area of 5,152 dunams, indicating a massive concentration of capital in the capital city.
2. Duhok Governorate: Has seen a significant jump in the number of licenses, ranking second with 73 licenses over 776 dunams; however, its capital volume is quite low at only $63,613,560. This equation demonstrates an interesting disparity: Duhok leads Sulaymaniyah in quantity but lags significantly in terms of the quality and scale of projects, proving that most projects in Duhok are small to medium-sized.
3. Sulaymaniyah Governorate: Follows Erbil with 23 licenses, but its capital volume is much higher than Duhok’s, reaching $1,607,880,605 over 2,311 dunams, signaling the presence of large strategic projects in the province.
4. Independent Administrations (Soran and Zakho): Soran holds 9 licenses with $194,811,326 in capital over 819 dunams, while Zakho has recorded a strong performance with 23 licenses and $138,490,450 in capital over 1,181 dunams.
5. Administrations (Garmian and Raperin): Garmian holds 6 licenses with $13,526,205 in capital over 10 dunams, and Raperin has 2 licenses with $11,724,384 in capital over 12 dunams.
6. Halabja Governorate: Ranks the lowest, with only 1 investment license valued at $1,558,425 over just 2 dunams.
Conclusion
This equation and geographic distribution tell us that the tourism sector has an unprecedented capacity to attract capital (reaching nearly 39% of all investments). However, the massive disparity between provinces—specifically the lack of projects in Halabja, Garmian, and Raperin—necessitates a redesign of the investment map. For tourism development to become a comprehensive driver for the entire society, special incentives and facilities should be granted to investments directed toward low-income and marginalized areas, alongside the three-year customs exemptions. Furthermore, the employment of local labor and university graduates should be a fundamental requirement. This will ensure that the Investment Law both protects capital and provides geographic and economic justice for the entire Kurdistan Region.