Iraq and beyond: the challenges of doing business in volatile markets

Global workspace provider Regus recently opened its 105th market – in Erbil, Iraq. Celia Donne, Global Operations Director, Regus, provides an overview of the company’s operation in the Kurdistan region and the challenges a business faces in such a marketplace.


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Iraq has been known more for conflict than business in the last few decades

The opening of our business centre in the Kurdistan region of Iraq has piqued interest both internally and across the media. People simply aren’t used to associating business development stories with this volatile country. And yet, expert commentators have described Kurdistan, and its capital Erbil, as a ‘frontier market’ and a ‘hub for development’.

Our new business centre fills a gap in the market for top-level office accommodation. There is a particular requirement amongst smaller companies not wanting to take out an entire floor or fit out a new office. The workspace is situated just five minutes from the regional airport and the centre is set amongst the town’s best restaurants, cafes and five-star hotels.

Occupying one floor of a secure, brand-new four-floor building, we offer 65 workstations – a number set to rise to over 80 by the end of the year. This kind of professional, flexible workspace is proving very attractive to businesses establishing a footprint in the region.

This is the first such workspace of its kind in Kurdistan, giving companies a dynamic option aside from leasing out local villas. Understandably, Iraq’s property market has been unpredictable, with the result that there are many villas in the area simply lying empty. Up to now, local businesses have been renting these villas and, at considerable expense, converting them to suitable office premises. Typically, businesses are asked to take leases for at least six months, with full payment made in advance. It is difficult for any businesses to predict future needs, let alone one operating in such a challenging country.

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There is still a heavy security presence in some areas.

Our business centre is enabling companies to effortlessly scale-up or down as needs dictate, giving them far more flexibility than they have been able to achieve previously. At present, we have two main types of business using the centre. The first is oil and gas service workers. More than 600,000 barrels of oil a day are transported through a new pipeline to Turkey and there is an enormous industry operating around that production. The second core customer group is non-governmental organisations – the support staff linked to relief work.

Clearly, this isn’t an area that attracts businesses looking to speculate. Those that arrive do so because a customer or client has requested their presence in the region – and they must be able to set-up at speed. One might expect IT provision to be markedly different to developed Western standards – and, of course, there are challenges. The area is subject to frequent power-outs, usually lasting for a few seconds at a time. As a result, our centre has an emergency on-site generator which negates any potential disruptions and promotes business as usual.

Naturally, businesses that are new to the region want to know what to expect. Often, legal advice will come from a local, on-the-ground representative of an international law-firm. The consulate can also be a source of useful help. But our staff at the centre remark that the best advice usually comes from businesses already using our facilities. They are ideally placed to talk about the rhythms of the working day, the local amenities, the real-life practicalities of conducting business in Iraq. In Iraq, as in other new markets, businesses need flexibility, agility and the right location to succeed.

 

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