Frequently Asked Questions


What is the definition of foreign investment?

Foreign investment is the use of foreign capital in a new or existing enterprise after obtaining a foreign investment license in activities where the risk of returning capital and its benefits lies with the investor.

What is the Foreign Investment Allowance in Iran?

There are no restrictions on foreign direct investment in the Islamic Republic of Iran in terms of percentage of participation and amount of investment.

If so, what does the mean of ratio of 25% and 35% referred to in paragraph (d) of Article (2) of the Foreign Investment Promotion and Protection Act mean?
The above ratios have nothing to do with the percentage of foreign participation in each investment case. In fact, these ratios are intended to determine the share of the value of goods and services produced by the FDI scheme throughout the country's economy, which is calculated and determined separately when issuing FDI permits for each sector and sub-sector.

In what legal and contractual form is foreign investment acceptable?

Foreign investment is done in the following ways: A) Legal partnership (direct investment): The purpose of investing a foreign investor in an Iranian company, whether new or existing. The amount of foreign investor shares in such an Iranian company is not subject to restrictions and the investor may be involved in managing and managing its affairs relative to its capital or shareholding in the company. (B) Contractual Arrangements: means the set of ways in which the use of foreign capital is solely subject to the agreements made between the parties to the contract. In other words, the rights of the foreign investor do not arise as a result of his direct participation in the capital of the Iranian venture capital company, but merely rely on the parties' contractual agreements. Foreign investment can be done in all sectors within the framework of contractual arrangements. The return of capital and the benefits of such investments are also derived from the economic performance of the investment plan, without the assurance of the government, banks and state-owned companies.

Is Foreign Direct Investment Sector Permitted?

Foreign investment is done in the following ways: A) Legal partnership (direct investment): The purpose of investing a foreign investor in an Iranian company, whether new or existing. The amount of foreign investor shares in such an Iranian company is not subject to restrictions and the investor may be involved in managing and managing its affairs relative to its capital or shareholding in the company. (B) Contractual Arrangements: means the set of ways in which the use of foreign capital is solely subject to the agreements made between the parties to the contract. In other words, the rights of the foreign investor do not arise as a result of his direct participation in the capital of the Iranian venture capital company, but merely rely on the parties' contractual agreements. Foreign investment can be done in all sectors within the framework of contractual arrangements. The return of capital and the benefits of such investments are also derived from the economic performance of the investment plan, without the assurance of the government, banks and state-owned companies.

What is the law supporting foreign investment in the Islamic Republic of Iran?


The Foreign Investment Promotion Act in Iran is the Foreign Investment Promotion and Support Act of 2002 (2002), hereinafter referred to as the Foreign Investment Act. The scope of this law extends throughout the territory of the Islamic Republic of Iran and all foreign investors can invest and benefit from it under the law.

What are the forms of foreign capital?


The permitted areas of foreign investment in Iran are very diverse and include all industrial, mining, agriculture and services activities that lead to development and manufacturing activities.

Who can invest in the Islamic Republic of Iran?


All foreign natural and legal persons as well as Iranian natural and legal persons with foreign source capital may invest in the country in accordance with the provisions of the Foreign Investment Law.

How can Iranian investment be subject to foreign investment law?

 

Iranian investments may be subject to foreign investment law if they are of foreign origin and may, after obtaining foreign investment authorization from the Iranian Investment and Economic Assistance and Technical Assistance, file a registration with the organization.

Can foreign state-owned companies undertake the foreign investment law to invest in Iran?

Foreign government companies can invest in Iran within the framework of the Foreign Investment Law and enjoy the benefits of the law. Investments in foreign state-owned companies are considered private.

Do foreign investments automatically have the support of the law of encouragement and support of foreign investment?


No. Establishing legal protections for foreign investment requires obtaining a foreign investment permit. How and under what conditions can foreign investment, which has previously been funded but not covered by the law, be covered? Investments that have not been previously covered by the law can be covered at any time after the conditional acceptance process to create new added value.

Which institution is responsible for accepting and supporting foreign investment in the Islamic Republic of Iran?


Iran's Investment and Economic and Technical Assistance Organization is the only central government body responsible for accepting and providing support for foreign capital. Foreign investment licenses are also issued under the Foreign Investment Law.

Is Foreign Investment in Upstream Oil and Gas Areas Allowed?


Foreign investment in upstream oil and gas fields is only possible within the framework of contractual arrangements, but in the downstream areas, foreign direct investment is allowed.

Is it permissible to use foreign names and trademarks in foreign investments?


The use of foreign names and trademarks in the country within the framework of the Commission's ratification is subject to Article 138 of the Constitution No. 205136/38043 dated 12/12/2006.

Has Iran accepted membership in the Multilateral Investment Guarantee Agency (MIGA)?


The Government of the Islamic Republic of Iran has become a member of the Multilateral Investment Guarantee Agency (MIGA) and it is possible for foreign investors to obtain guaranteed coverage of this agency in accordance with the relevant regulations.

Is it possible to invest in existing units? How?

In the rules of foreign investment law, there is no difference between capital investment and investment in an existing entity, and all foreign investors can invest in a new plan or existing enterprise at any time. Explaining that the acceptance of investment in existing units is subject to the creation of new added value as a result of increased investment, improved management, export development and improved technology level within the unit.

If a foreign investor tends to invest in an existing company and take part of its stock, what are some ways to increase investment?

There are two ways to do this: (a) buy part of the existing stock at an agreed price; (b) participate in raising capital through subscription of new shares using existing shareholders.

What are the legal forms of construction, operation and transfer (BOT) contracts?

Operation and transfer (BOT) contracts and the like (such as BOOT, BOO, etc.) can be realized through the registration of a foreign investor branch in Iran or the formation of an Iranian company (project company).

What does the property rights mean?

The property rights means rights arising from property and / or acquired rights arising from a contract recognized in foreign investment law and, as the case may be, extend to property rights, exploitation, profits, etc.

What is the assignment of property rights in BOT projects?

The assignment of property rights means the acquired rights arising from the relevant contract, which may be transferred to the Iranian party.

Is it permissible for a foreign investor to have a bank account outside of Iran?

Opening a bank account outside of Iran is permitted to maintain the export earnings of foreign investments and is intended to provide the foreign investor with direct access to the currency of export for receiving dividends and other payments to be made to him.

Can a foreign investor insure his capital?


A foreign investor can insure his capital against non-commercial (political) risks with his country's investment insurance company. If paid to the investor under the insurance contract, the insurer may, as the successor of the investor, claim compensation for damages resulting from the rights originally owned by the investor.

Is foreign ownership of land in Iran possible by foreigners?


Yes, within the framework of the law and regulation of the acquisition of foreign nationals land ownership is possible for personal use by foreign natural persons. Ownership is subject to special State Department authorization.

How is the ownership of land in foreign investment project?


It is not possible to acquire land in the name of a foreign national, but if a foreign investment plan results in the formation of an Iranian company, land acquisition in the name of a company with an Iranian identity will be permitted.

Is the acquisition of land permitted by foreigners for industrial and agricultural affairs?


Ownership of land for industrial and agricultural purposes is not permitted under the name of a foreign national. However, if a foreign investment plan results in the formation of an Iranian company, the acquisition of land in the name of the company having an Iranian identity will be permitted.

Is having a domestic partner / investor required for foreign investors?

No, it is not necessary to have an internal partner.

Is Foreign Investment allowed in Companies Listed on the Stock Exchange?


Yes - such foreign investors can also benefit from the law encouraging and supporting foreign investment.

Can doing business solely be foreign investment?

Doing purely commercial activities is not foreign investment, but commercial activities that complement productive activities in approved projects can be considered as foreign investment.

Is foreign investment covered in services?


Foreign investment in services such as tourism can be covered by the Law on Foreign Investment Promotion and Benefits.

How can foreign investment in existing firms be acceptable?

According to the Acceptance Regulations, such investments can also be covered by the law at any time after the process of accepting and obtaining a conditional investment permit to create new added value and enjoy the benefits of the law.

Is it possible to register patents and trademarks in Iran?

Industrial and intellectual property rights, including patents, trademarks, and so on, are legally regulated and protected under the country's trademark and patent law.

What is the maximum amount of capital and stock of a foreigner in Iran?

Unlimited, it can be 100% foreign shareholder

What are an Iranian company and a foreign company according to Iranian law?


An Iranian company is a company established and registered under Iranian trade law, even if the shares or shares of these companies are 100% owned by foreign or natural persons. A foreign company is a company established outside of Iran.

Is it possible to establish a legal base as a branch and agency of foreign companies in Iran?

Yes. Any foreign company can establish a legal base in Iran by expanding its business, contracting and marketing activities, etc. by registering a branch or parent company. There are specific requirements for establishing a branch or agency, and applicants must apply directly to the Office of Corporate Registration and Industrial Property.

Is the establishment of a branch and agency considered as foreign investment?

Establishing a branch or agency is not considered foreign investment. Foreign investment can be through the formation of a new Iranian company, a merger with an existing Iranian company, or the acquisition of a contractual agreement with an Iranian venture capital firm.

Are foreign investors required to get a business card?

They are required to obtain a business card as a registered company in the country because it is essential to have a business card in order to export and import.

Are foreigners also required to provide a certificate of qualification for a business card?


Foreigners, like Iranian applicants, are required to submit a certificate of qualification that must be approved by the Iranian Consulate in their home country.

Are manufacturing companies with foreign investors required to operate in industrial estates?

Considering the facilities (such as road, environmental security, electricity, water, gas, telephone and sewage, etc.) and appropriate conditions of industrial settlements to provide the required services and ease and integration of relevant industrial units, the general policy of the Ministry of Industry, Mining and The business is to establish these units in industrial estates.

What are the conditions for the use of a National Development Fund foreign currency loan by a foreign investor?

It is possible to obtain facilities from the National Development Fund on specific terms and conditions. These conditions are designed to ensure the return of funds to the fund, in addition to making it possible for everyone to benefit. These terms and conditions are generally stated in the Fund's Terms and Conditions. The manner in which this Code does not apply shall be governed by the Statute of the Fund referred to in Article 84 of the Fifth Planning Act and the monetary and exchange rate policies of the Bank. Therefore, foreign investors operating within the framework of the Foreign Investment Promotion Act, provided that at least 30% of the total investment value of the project is obtained from the place where the foreign investor is brought (in accordance with Article 80 of the Constitution), may use these facilities. .