Unregulated foreign labor costs Iraq $7 billion a year, MP says, proposing new law

BAGHDAD — Unregulated foreign labor is costing Iraq more than $7 billion a year, about 8% of oil revenue, Basra lawmaker Ahmed Dagher al-Mousawi said, announcing plans for legislation to tighten controls on foreign workers, recruitment companies and money transfers abroad.

Reports put the number of foreign workers in Iraq at 1 million to 1.5 million, against 47,000 officially registered, Mousawi, a member of parliament’s Security and Defense Committee, told a state-run newspaper, putting pressure on the labor market and infrastructure. About 45,000 foreign visitors had overstayed during the current pilgrimage season, he said, exposing gaps in residency monitoring. Unauthorized foreign workers were widespread in skilled trades, services, the oil sector, private business and domestic work, he said, questioning why some ministries employ foreigners as service staff in sensitive locations.

His proposal would review rules for recruitment companies, close visa loopholes, tighten oversight of visitors who overstay and regulate transfers abroad, he said, and he called for amendments to Labor Law No. 37 of 2015 and the residency law.

The Labor Ministry has said 47,000 foreign workers are registered with valid permits, while acknowledging it has no accurate figure for those working illegally; ministry officials have put the unregulated workforce at nearly 1 million. Employers must keep at least 80% of their workforce Iraqi, and must show qualified Iraqis are unavailable before recruiting abroad. The Labor Ministry said in November 2025 that it had deported more than 34,000 undocumented foreign workers over the previous two years, some of whom had entered on tourist visas or through the Kurdistan Region. The Interior Ministry said on Oct. 19 that it had deported 32,457 foreign nationals since the start of 2026. In Maysan, labor authorities took legal action against 37 companies in 2024 for breaching quota rules.