Investment Opportunities in Iran for Foreign Investors

The Islamic Republic of Iran offers a wealth of opportunities for foreign investors across various sectors of the economy. With a robust legal framework under the Foreign Investment Promotion and Protection Act (FIPPA) Iran guarantees equal treatment security of investments and attractive facilities for foreign investors. This article highlights the methods of investment shared benefits and specific incentives available for those looking to invest in Irans dynamic and growing market.

Foreign investments in the Islamic Republic of Iran are subject to general conditions outlined in the Foreign Investment Promotion and Protection Act (FIPPA). Acceptance of such investments requires a formal written application from the foreign investor and adherence to the regulations specified in the act’s guidelines. Foreign investment can be undertaken through the following methods:

Foreign Direct Investment (FDI)

Foreign investors can directly invest in various sectors of the Iranian economy, where private activities are permitted.

Contractual Arrangements

Foreign investment can also take place under contractual frameworks such as:

• Build, Operate, Transfer (BOT) contracts
• Buyback agreements
• Civil Partnerships

Investments protected and supported under FIPPA have shared and specific features and facilities, as outlined below:

Shared Features and Facilities:

1. Equal Treatment: Foreign investors receive equal treatment as domestic investors.
2. Capital Entry: Both cash and non-cash foreign capital can be introduced under the investment license, with no need for additional permits.
3. No Limitations on Investment Volume: There are no restrictions on the amount of foreign investment.
4. Protection Against Nationalization: Foreign capital is safeguarded against nationalization or expropriation, with compensation rights in such cases.
5. Repatriation of Capital: Investors can transfer their capital, profits, and returns abroad in the form of foreign currency or goods, as outlined in the investment license.
6. Export Guarantees: The export of goods produced by the invested company is guaranteed. In case of an export ban, the goods can be sold domestically, and the proceeds can be converted to foreign currency for transfer abroad through the official financial channels.

Specific Features and Facilities:

1. Foreign Direct Investment:

• Investment is allowed in all sectors where private activity is permitted.
• There are no restrictions on the percentage of foreign ownership in investments.

2. Contractual Arrangements:

• The Iranian government guarantees compensation for losses incurred by foreign investors due to legal changes or government decisions, up to the amount of unpaid installments under the financial agreement.
• In BOT and Civil Partnership projects, the government guarantees the purchase of goods and services produced by the investment project, particularly when the government is the exclusive buyer or supplier of subsidized products, as per legal regulations.

The Iranian government is fully committed to facilitating foreign investment. It provides support for project introductions, hosts meetings with investors, and organizes field visits to potential investment sites across the country.