Iran: Investing

FDI in Figures

The flows of foreign investment in Iran remain very weak compared to the enormous potential that the country can offer. This is due to several factors: the state's supremacy in the economy, external political risk (American embargo, economic sanctions, nuclear crisis) as well as internal (impoverishment of the population, social risks, inflation, crisis of the political regime), and heavy bureaucracy in all sectors.

Foreign investment was developed a little during the era of Khatami who offered an international opening to many foreign companies, notably French and Italian, which invested in oil and gas projects. However, the rate of investment in the country remains very associated to the political context and it is very difficult to predict the global situation of Iran in the next following years.

Why You Should Choose to Invest in Iran

Strong Points

Iran benefits of great potentials which are currently under-exploited due to its isolation on the international scene.

Iran represents an important market (70 million inhabitants) with a young population eager of consuming foreign products. It is a solvent market with an enormous need of consumer goods, equipment and large infrastructure projects (electricity, water, accommodations, transport, etc). Production costs (work, energy, etc) are low.

Iran, because of its geographical location, is also an ideal base for exports in the region and its energy resources are very attractive to foreign investment.

Weak Points

Iran hurts from its international isolation and this fact has an undeniable impact on its economy.

The influence of the State in the economy is very important with numerous organizations linked to the state and disposing of funds and important budgets without coherent management. Corruption is wide-spread in the country.

Geopolitical tensions, particularly with Israel and domestic instability are also major risk elements.

Government Measures to Motivate or Restrict FDI

A law on incentive and protection of foreign investment and another one simplifying taxation have been voted in 2002. In 2004, a modification of articles 43 and especially 44 of the Constitution authorized the government to privatize many sectors, which had been previously protected, such as banking, transport  and oil and gas industries in the downstream of the industry. Sixteen special economic zones as well as six free-trade zones have been also introduced in the Iranian territory.

In order to attract foreign investment as well as obtaining knowledge, buy-back systems have been established in which the revenues of the foreign investor partner can be repatriated in the means of goods and services produced by the project. In terms of investment, the Iranians offer privileges to investors who can provide long term strategies and transfer of technologies.

Procedures Relative to Foreign Investment

Freedom of Establishment

All the sectors are open to overseas investment except for the strategic sectors (defense) and the sectors upstream of gas and oil. In these sectors, foreign companies can intervene on the basis of buy-back contracts.

Acquisition of Holdings

A foreign company can have up to 100% of the capital of an Iranian company.

Obligation to Declare

Foreign investments promotion agency in the country has all information on licenses necessary for setting up.

Competent Organization For the Declaration

OIETAI

Requests For Specific Authorizations

OIETAI

Investment Opportunities

Investment Aid Agency

Organisation for investment and economic and technical assistance in Iran (OEITAI)

Tenders, Projects and Public Procurement

Tenders Info, Tenders in Iran
Globaltenders, Tenders & Projects from Iran
Asian Development Bank, Proposed Projects in Asia
DgMarket, Tenders Worldwide

Other Useful Resources

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