Doing business

Iran

Print the page Click to print the page

Setting up a company | FDI in figures | Why you should choose to invest | Procedures relative to foreign investment | Finding assistance for further information

Setting up a company

Types of companies and capital (max/min)	Number of partners/shareholders and liability
Sherkat Sahami Khass is a private company limited by shares. 1 million IRR minimum.	3 shareholders minimum. Partners' liability is limited to the amount contributed in shares.
Sherkat Sahami Aam is a public company limited by shares. 5 millions IRR minimum.	5 shareholders minimum. Partners' liability is limited to the amount contributed.
Sherkat tazamoni is a company (partnership) where liability is collective. Such a company must be indicated by the name of at least one of the partners. "Partnership" must appear in the name. No minimum	2 shareholders minimum Partners' liability is limited to the amount contributed.
Sherkat-e mokhtalet-e-ghair-e sahami is a limited partnership company. It is a company established for trading. No minimum	1 or more "general partner" and 1 or more dormant partner A general partner will be responsible for any debt higher than the assets a dormant partner is responsible only to the extent of its contribution to the partnership

Business setup procedures

Setting up a company	Iran	Middle East & North Africa
Procedures (number)	6.0	8.1
Time (days)	8.0	20.0

Source: Doing Business.

For further information: Consult Doing Business Website, to know about procedures to start a Business in Iran.
Iran Civil Center
The competent organization: If registering a branch or a representation, the Office of registration of companies and industrial property must be contacted: If an overseas investment, it is necessary to contact the OIETAI or the Ministry of Foreign Affairs.

FDI in figures

Foreign Direct Investment	2008	2009	2010
FDI inward flow (millions USD)	1,615	3,016	3,617
FDI stock (millions USD)	20,967.4	23,983.5	27,600.4
Performance Index*, ranking on 141 economies	130	120	-
Potential Index**, ranking on 141 economies	50	-	-
Number of Greenfield investments***	20	15	-
FDI inwards (in % of GFCF****)	1.8	9.0	-
FDI stock (in % of GDP)	6.0	7.0	-

Source:

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk. *** Green field investments are a form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. **** Gross fixed capital formation (GFCF) measures the value of additions to fixed assets purchased by business, government and households less disposals of fixed assets sold off or scrapped.

Why you should choose to invest 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

Finding assistance for further information

Investment aid agency: Organisation for investment and economic and technical assistance in Iran (OEITAI)
Other useful resources