Over the last few decades, FDI in is remarkably considered as an effective forms of international business activities globally and becoming more important in terms of the economic development in developing countries. Almost all developing countries interested in attracting MNEs to access to different sources through their long- term activities, in order to support the economic development. Thus, the policy makers have tried to issue friendly investment laws and policies to make an appropriate climate for foreign investor's direct activities.

Since 1991, the Kurds in Iraq have decided to establish an autonomous region in northern Iraq after decades of military and political efforts to self-rule. In 2005 the Iraqi Constitution, officially recognized Kurdistan as a federal region, which run by the Kurdistan Regional Government (KRG). The population of Kurdistan is estimated at over 6 million, which includes up to 20% of the population of Iraq.

From 2003, Kurdistan has become more considerable area in terms of different economic activities. The region is recognized as a new and unexploited area with massive economic opportunities for local and foreign investors.