Daimler AG signed a memorandum of understanding with the Iraqi government that could see the German vehicle maker supply buses, trucks and technological expertise in efforts to rebuild the country.
Ursula Mertzig-Stein, a spokeswoman for Stuttgart-based Daimler, said that a small number of Daimler employees working out of an office in Baghdad will research what the car maker might be able to offer to help the country rebuild, and whether the company might be able to invest more broadly in Iraq.
"It is a first step to show that we have some optimism in Iraq getting back to normal," Mertzig-Stein said. She said Daimler plans to have the employees in place by the end of this year.
Shares of Daimler rose more than 3.5 percent to 42.47 (US$66.85) in Frankfurt trading.
The agreement was signed Wednesday at a meeting between German Economy Minister Michael Glos and Iraqi Prime Minister Nouri al-Maliki. Glos said the contract is a signal of growing eagerness from German goverment and business to invest in Iraq.
"I warmly greet German companies, Daimler for example, which today signed a contract to open its own offices in Baghdad, and I hope that other examples will follow," Glos said.
Glos, who visited Baghdad earlier this month, said that it was getting easier to do business in Iraq because security conditions there are improving.
"The time of the middle man is over," Glos said. "No more must we meet with Iraq government officials outside of Iraq." Al-Maliki is wrapping up a two-day visit to Germany that also included a meeting with Chancellor Angela Merkel. At a joint press conference with Merkel on Tuesday, al-Maliki said he hoped to recruit German firms to help rebuild Iraq's infrastructure and education system.
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