Can you still make money by opening a Chinese restaurant in Iraq?

This article helps you understand the real economy of Iraq, but just reading isn't enough—at the end of the article, we casually created an "AI Baghdad Chinese Restaurant Simulator," where you can personally experience being the owner of a Chinese restaurant in Iraq.

Recently, "Welcome to Dragon Restaurant" became popular. In the movie, Xu Fu goes to war-torn Middle East to open a Chinese restaurant, relying on plate after plate of Chinese dishes to pay off debts. Many people are left wondering if such a thing could really happen in reality.

In fact, there is a very close real-life case.

In 2004, a Chinese businessman named Chen Xianzhong opened a restaurant called "Longwan Restaurant" in post-war Baghdad. It was located near the Baghdad National Theater, spanning two floors of around 800 square meters each, with a total of about 400 seats. The chefs were hired from China, and the tables, chairs, kitchenware, and seasonings were also shipped from the country. The owner shipped four containers of flour, soy sauce, pickles, and seasonings, supposedly enough for three to four years.

The restaurant once had good business, but it did not follow the "high-profit war restaurant script"; rather, it was a story about making money every day yet ultimately not being profitable.

Public information shows that Chen Xianzhong invested nearly $500,000 in the restaurant and related businesses, and by the time he closed the doors, he had only recouped less than two-thirds of that.

So today, let's calculate based on this real case. If the Xu Fu in the movie wanted to earn 2 million RMB in a year, how many American soldiers would he need to serve daily? And how much would a large plate of chicken need to be sold for?

01

War State

Let's rewind to the year before the war, 2002.

The World Bank's review of Iraq's economy mentioned that at that time, it was not uncommon to earn a salary of only $10 to $15 a month. Food, fuel, electricity, and water supply were kept at extremely low official prices long-term by the state, with public rationing and various evident and hidden subsidies supporting much of the residents' basic consumption.

At first glance, this seems highly favorable for opening a restaurant: cheap labor, low water and electricity costs, and inexpensive housing.

But beyond these factors, there was another crucial aspect: the cash purchasing power of people before the war.

If an employee earns only $10 to $15 a month, the majority of people around wouldn't be able to afford a meal in a restaurant.

If a Chinese meal sells for $15, it could equal an average person's entire monthly wage. The money you save from the payroll is also vanishing from customers' wallets.

In addition to low purchasing power, in 2002, Iraq was also under the "oil-for-food" program. Imports paid for with Iraqi oil revenue required contracts to be submitted first by relevant countries or UN agencies, and then reviewed by the UN Iraq Program Office; if the goods involved a regulated list, they would also need to be submitted for review by the UN Monitoring, Verification and Inspection Commission or the International Atomic Energy Agency. In September 2002, the UN revealed that there were 526 import applications worth a total of $2.8 billion that were classified as "non-compliant or unprogressed," with the most common problem being that suppliers did not submit complete goods and service descriptions.

Therefore, when Longwan Restaurant later opened, the owner did not opt to import little by little, but instead shipped four containers of flour, soy sauce, pickles, and other Chinese ingredients from China all at once, reported to be enough for a restaurant with 400 seats for three to four years.

In this backdrop, without a group of customers paying in dollars, whose income wasn't constrained by local wages, even cheap labor wouldn't save the restaurant.

By March 2003, the war began.

Looking at the Central Bank of Iraq's report for that year, the price data from March to June was empty due to the war.

With no one even tracking prices, it was impossible to talk about normal restaurant operations; the owner faced the most fundamental questions every day: whether they could operate today, whether staff could safely get to work, whether fridges would spoil food due to power outages, and whether the cash received could be safely transported away.

After the war ended, people, goods, and dollars flowed back into Baghdad, and prices started to rise. One of the first things to increase was rent.

What drove up rental prices were the foreign companies and contractors newly arrived in Baghdad. They held dollars and were more willing than ordinary residents to pay high prices for good locations and safety. Originally rented at local income levels, properties rapidly began to be re-priced according to the budgets of foreigners.

This had both good and bad effects for restaurants. With more foreigners, there were also more customers willing to spend $20 or $30 on a meal; but if you wanted to locate your restaurant in areas where they worked and lived, you also had to bear higher location costs.

Wages were also rising. In October 2003, the Coalition Provisional Authority announced the new civil service wage scale, with the lowest two tiers at 157,000 and 204,000 dinars per month, translating to about $107 and $139. Just over a year ago, a monthly salary of $10 to $15 was very common; now, wages in the formal sector had quickly risen to over $100.

The imports were even more exaggerated. According to the World Bank, from 2002 to 2004, Iraq's private imports grew by about 20 times. With sanctions just lifted, stores were out of stock, engineering projects lacked equipment, and foreign entities entered the scene with dollars to buy everything.

02

If earning 2 million in 2004, what's the minimum sales needed?

Now let's return to the question that worries Xu Fu the most: In 2004, 2 million RMB was approximately equivalent to $242,000, meaning approximately $20,100 needed to be earned each month.

Let's assume that from every $100 of food sold, $35 goes towards purchasing ingredients and supplies. Next, let's calculate rent, wages, and utilities as zero. Even at this extremely cheap level, to leave $20,100 in profit each month, the revenue would have to reach:

$20,100 ÷ 65% ≈ $31,000.

If serving 60 customers daily and operating 30 days a month, the minimum price per customer would be about $17.2.

Of course, in reality, rent cannot be waived, and employees cannot work for free. For every additional $5,000 in fixed costs, the price per customer would have to increase by $4.3.

If three people only ordered one large plate of chicken and did not order drinks, staples, and other dishes, then with 60 customers a day, the income would only equate to 20 servings of large plate chicken. This would require selling each dish for $52 to $90.

This is definitely not something an average Iraqi can afford on a daily basis.

However, this is not the most fatal reason.

In 2004, after a Chinese worker was kidnapped in Iraq, two of the four Chinese chefs at Longwan Restaurant decided to leave. Around March 2005, the owner was nearly kidnapped while out buying vegetables. Weeks later, an employee transporting payroll funds was robbed of a vehicle and $50,000 in cash. On July 30, 2005, a car bomb exploded near the National Theater, shattering the restaurant's windows, and the restaurant subsequently closed.

These losses cannot be averaged over each month like rent; when an incident occurs, it can mean several months' worth of profits gone.

If the goal is to earn $20,000 a month, then that $50,000 robbery wiped out two and a half months of profit in one go. At that time, the restaurant owner had invested nearly $500,000 in the business, and ultimately recouped less than two-thirds of that. This means at least $167,000 was not recovered, roughly equal to over eight months oftarget profits.

03

If opening a restaurant today, how would you calculate these costs?

Let's move ahead to 2026.

Suppose we open a Chinese restaurant in the Karada area in southern Baghdad, around 90-100 square meters with about 40 seats.

First, let's consider the rent costs. As of August 8, 2026, the average monthly rent for a 90 square meter shop in Karada is 3.75 million dinars.

Next is the labor cost. Currently, according to a public recruitment announcement from a dining project in Baghdad's Karada, the monthly salaries offered are: head chef 1.5 million dinars, assistant chef 1 million dinars, kitchen staff 700,000 dinars. Another announcement for service positions in Baghdad gives salaries from 600,000 to 700,000 dinars.

Therefore, we can configure it as follows:

• 1 head chef: 1.5 million;

• 2 assistant chefs: 2 million;

• 2 kitchen staff: 1.4 million;

• 3 front-of-house, cashier, and cleaning staff: assuming 650,000, total 1.95 million.

Totalling 6.85 million dinars per month.

These eight people cost a total of 6.85 million dinars monthly; if we still need to hire chefs from China, visa, airfare, and accommodation costs will be additional, leading to even higher labor costs.

Next, let's look at electricity costs. Baghdad frequently experiences power outages, so relying only on public electricity will not suffice. Refrigerators, coolers, and air conditioning can't just stop, so we also need to purchase backup power from nearby private generators.

The local charging method is a bit unusual; it doesn't consider how much electricity you use in a month but instead looks at how many "amperes" you've purchased in advance. Simply put, it’s about reserving your store's electricity limit. In July 2026, the price for 24-hour power supply was 12,000 dinars per ampere per month.

The restaurant, which has air conditioning, refrigerators, coolers, exhaust systems, and lighting, will have a significantly higher power consumption than an average household. Let's first assume we need 50 amperes, which would cost 600,000 dinars a month. If the equipment in the store requires up to 80 amperes, it would cost 960,000 dinars a month.

And this is just the private generator cost; public electricity fees still need to be paid. This means in Baghdad, running a restaurant often requires paying for electricity twice.

Other expenses include public utilities, gas, internet, cleaning, maintenance, and a little promotion cost; we will set aside 1.8 million dinars.

Before even purchasing a single chicken, the store would need to spend 13 million dinars a month, which is about 67,000 RMB.

Now let’s look at the food costs. According to the Iraqi Statistics Bureau's 2025 food pricing data, frozen Brazilian chicken is 4,882 dinars per kilogram, cooking oil is 2,271 dinars per liter, white flour is 1,337 dinars per kilogram, and potatoes and onions are about 800 dinars per kilogram.

Estimating the cost of a large plate of chicken to feed two to three people:

• 1.5 kg of frozen chicken: 7,323 dinars;

• 1.2 kg of potatoes and onions: about 960 dinars;

• 0.5 kg of flour or noodles: about 669 dinars;

• 0.2 liters of cooking oil: about 454 dinars;

• Ketchup: about 570 dinars;

• Spices, seasonings, soy sauce, etc.: set aside 1,500 dinars.

The total, therefore, is about 11,500 dinars; allowing for 10% for loss and price fluctuation, the total ingredient cost for one large plate of chicken is about 12,600 dinars, which is roughly 65 RMB. If this dish sells for 35,000 dinars, ingredients would account for about 36% of the selling price.

05

How many customers are needed to earn 2 million?

First, spending 13 million on fixed expenses means that 36% of nominal sales will go to covering ingredients. Therefore, the revenue needs to be at least:

13 million ÷ 64% ≈ 20.31 million dinars.

Most Chinese dishes in Baghdad are priced around 16,000 to 19,000 dinars; we'll estimate each customer spends about 17,000 dinars.

20.31 million ÷ 17,000 ÷ 30 days ≈ 40 customers/day.

This means if about 40 customers come in each day, the restaurant can approximately break even.

If there are 60 customers a day, the monthly revenue would be 30.6 million dinars. After deducting 36% for ingredients and fixed costs of 13 million, the monthly operating profit would be about 6.58 million dinars; converted at the Central Bank rate of about 193.6 dinars per 1 RMB, this would amount to around 410,000 RMB annually.

If there are 80 customers daily, the annual operating profit would be about 810,000 RMB.

However, this is not the final amount the owner sees. Renovation, taxes, loan interest, and delivery platform commissions would further reduce that total, meaning the actual cash in hand would be even lower.

So what if today, it’s still required to earn 2 million in a year?

2 million RMB is equivalent to approximately 387 million dinars, meaning an average monthly profit of 32.27 million dinars is needed.

(32.27 million target profit + 13 million fixed costs) ÷ 64% ≈ 70.73 million dinars monthly revenue.

• At a price of 17,000 dinars per customer: about 139 customers per day;

• At a price of 25,000 dinars per customer: about 95 customers per day.

If relying solely on large plates of chicken:

• Sell 60 servings daily, each priced at least about 37,800 dinars;

• Sell 30 servings daily, each priced at least about 62,900 dinars.

A 2024 survey of Iraqi households showed that nationwide, the average monthly consumption expenditure is about 248,600 dinars; in Baghdad, it's about 237,600 dinars. Expenditure on "restaurants and hotels" in Baghdad accounts for 2.9%, translating to about 6,890 dinars per person per month.

A dish of chicken for 17,000 dinars would correspond to the average Baghdad resident's allocation to restaurants and hotels over two and a half months.

Of course, while some in Baghdad dine out daily, others rarely eat outside. The average number is so low because only a small proportion of the population—middle to high-income earners, foreign agencies, business clients, and corporate catering—regularly dine out.

Thus, choosing a location should not solely rely on the number of passersby; it’s essential to consider who passes by the restaurant daily.

Opening near Chinese enterprise projects, oilfield service companies, embassies, and middle to high-income communities, focusing on corporate meals, takeout, and business lunches, a price range of 17,000 to 25,000 dinars might be justifiable.

If opening in a regular community but copying the high-end Chinese restaurant's décor, imported ingredients, and prices, that model would soon become unsustainable.

After watching the movie, we may still be immersed in the extreme atmosphere of war and the genuine emotions of Dragon Restaurant, but that's already history. Today, opening a restaurant in Iraq lacks the opportunity to sell at high prices based on scarcity, as today's Baghdad is much more stable in terms of security, exchange rates, and prices. Starting a restaurant now requires strategic choices on location, taste, costs, and repeat customers, which differs little from opening a restaurant anywhere else.

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