| Article
1
In these Regulations, the following words are used in the place of the corresponding full
terms:
Mainland: the Islamic Republic of Iran, excluding the Free Trade and
Industrial Zones
Authority: the Authority of each Free Trade and Industrial Zone of the
Islamic Republic of Iran
Zone: each Free Trade and Industrial Zone of the Islamic Republic of
Iran.
Investment: the utilization of capital in different forms in any economic
activity for the purpose of manufacturing goods and providing services.
Foreign Capital: All the types of capital mentioned in Article 3 of these
Regulations (save Rial amounts) imported into the Zones by foreign investors.
Foreign Currency Capital: the capital mentioned in Article 3 of these Regulations (save
Rial amounts) that is imported into the Zones from outside the Mainland by Iranian
nationals
Net profits: the excess of realized income earned by an entity over expenses
incurred in a financial period resulting from profit-making activities, identified and
measured in accodance with generally accepted accounting principles
Article 2
All natural and legal persons and institutions, both Iranian and foreign, as well as
international organizations, may either separately or jointly with the Authority and
affiliates thereof or jointly with each other invest in the Free Zones in accordance with
these Regulations; their accepted capital shall be subject to these Regulations.
Article 3
For the purposes of these Regulations, capital shall comprise:
- Rial amounts and foreign currency amounts convertible in
the Zones (each Zone);
- machinery, equipment, parts and tools;
- industrial property rights including patents, technical
know-how, trademarks and names;
- land, air and sea-going vehicles relating to the
Investment;
- all or part of transferable net profits generated in the
Free Zones and added to the inital capital or utilized in another authorized activity
governed by these Regulations.
Note
In special cases, raw materials and semi-finished parts may, at the discretion of the
Authority, be accepted as a part of foreign capital.
Article 4
Capital shall be accepted and made subject to these Regulations under the following
conditions:
- it is utilized in activities authorized by a Zone;
- it has completed the entire procedure for the grant of the
investment permit mentioned in Articles 6 and 7;
- it does not involve the grant by the Authority to the
investor of a concession or monopoly rights.
Article 5
Foreign investors may participate in the economic activities of the Zone up to any ratio
(of the amount of investment).
Article 6
The investors mentioned in Article 2 of these Regulations that wish to import their
capital in any of the Zone must submit to the Zone Authority their application together
with a questionaire (prepared by the secretariat and the Zone Authorities and placed at
said investors disposal). Applications received in a Zone shall be examined by the Zone
Authority and an investment permit issued by the Authority of that Zone.
Note 1
Alterations to the contents of the questionnaire and the investment permit may only be
made with the knowledge and, where necessary, approval of the Zone Authority.
Article 7
Within the period specified in the investment permit, the holder of an investment permit
must import into the Zone a set percentage of the capital in order to commence
implementation of the activities mentioned in the investment permit.
Article 8
The importation and registration of capital in Free Zones shall be undertaken in the
following manner:
- The capital mentioned in Article 3 (a) of these
Regulations shall be deposited in the bank (or authorized credit institution) account of
the entity in which the investment is to be made and,, after computation of the Rial or
foreign currency countervalue, as the case may be, at date of the deposit and in a
accordance with the certificate of the bank (or the authorized credit institution),
registered as the capital of the investor in the register of the Zone' Authority.
- The capital mentioned in Article 3 (b) and (d) of these
Regulations and as specified in the investment permit and evaluated as per their CIF value
evidenced by documents and relevant invoices shall, after review by the Zone Authority, be
converted in total at date of customs clearance into a convertible foreign currency; the
foreign exchange value thereof and, concurrently, its Rials equivalent (at the current
rate of exchange posted in the Zone) shall be registered as of that date as the capital of
the investor in the register of the Zone Authority.
- The capital mentioned in Article 3 (c) of these
Regulations shall, after its evaluation has been confirmed by the Zone Authority, be
registered as capital in the register of the Authority.
Allocation of the value of the value of the technical know-how to the capital account
shall be concurrent with the transfer of said technical know-how.
- The capital mentioned in Article 3 (e) of these
Regulations shall, after confirmation by an auditing firm acceptable to the Zone
Authority, be registered as capital in the register of the Zone Authority in the following
manner:
(a) after obtaining the approval of the Authority, with the aim of increasing the capital
to expand investment in the same entity;
(b) after obtaining the approval of the Authority, with the aim to expand investment in
activities other than activities for which permission has been granted.
(c) after following the procedure set forth in Article 6 of these Regulations, if the aim
is to invest' in activities other than the activity for which the investment permit was
issued.
- Whenever all or part of imported capital in kind is deemed
in the judgment of the Authority as defective, damaged or useless, or do not conform with
the specifications declared in the application, or whose declared value exceeds its real
value, such portions of its price are not confirmed by the Authority shall be carried into
the capital account.
- In cases where capital goods mentioned in Article 3 (b)
and (d) of these Regulations belonging to foreign investors were previously used on the
Mainland and transferred to the Zones with the authorization of relevant Mainland
authorities, the transfer of such goods shall be deemed as a transfer of domestic capital
and shall be subject to the provisions of these Regulations.
Article 9
Investors may insure the capital they import into the Zones. If, pursuant to the
occurrence of a contingency, an insurance company becomes the subrogate of the investor in
accordance with the insurance policy, such subrogation by virtue of payment of
compensation of compensation to the insures shall be recognized; however, it shall not be
deemed as an assignment of capital.
Article 10
The legal rights of foreign investors are guaranteed and protected. Equitable compensation
for damages shall be paid by the Authority in cases where the capital of foreign investors
is nationalized by law in the public interest and/or said investors property is taken. In
such cases, investors must within a period of six months from date of the expropriation
file with the Authority a request for compensation for damages incurred. The Authority
shall evaluate at current prices the amount of damages incurred and within a period of
three months pay compensation thereof. The Zone Authority may undertake the aforementioned
guarantees through contractual arrangements with the Central Bank and other banks, credit
institutions and insurance companies.
Note
In case the investors subject to this article are
inclined that the guarantee mentioned in the Law on Attraction and Protection of Foreign
Investments (approved in 1334), to be fulfilled, their proposal of investment has to be
submitted to the body subject to the Article (2) of above-mentioned law.
Issuance of guarantee shall be allowed in compliance with the procedures and formalities
defined in that Law.
Article 11
Each year all entities set up in a Zone pursuant to investment permits must communicate to
the Authority a report on their operations and their financial accounts; the financial
accounts must be confirmed by an auditing firm acceptable to the Authority.
Article 12
Repatriation from the Zones of net profits, the initial capital and gains resulting from
economic activities undertaken with Foreign Capital and Foreign Currency Capital as well
as the proceeds of the sale or transfer of these types of capital is permitted.
Upon the request of such investors, and after verification that the amounts for which
repatriation from a Zone is requested result from utilization of the investors registered
capital in the activity specified in the investment permit, and after ensuring that the
circumstances set forth in the following Note have been taken into account, the Zone
Authority shall issue the necessary authorizations within one week from date of receipt of
said request.
Note
In its review, the Zone Authority must take into account whether the investor may benefit
from the tax exemptions mentioned in Article 13 of the Law on the Administration of the
Free Zones and whether the amounts for which repatriation is requested are net amounts.
Article 13
Payments of installments of the principal of loans and related expenses, as well as
payments pursuant to patent, technical know-how, technical assistance and engineering,
trademark, management and similar contracts are authorized if the Authourity is informed
and if they are made within the framework of investment projects based on relevant
contracts and financial statements.
Article 14
Investors may transfer their shares of stock to other investors with the authorization of
the Zone Authority. In such case, the transferee shall be deemed in every respect the
successor of the original investor.
Article 15
The transfer of capital from one Zone to another Zone shall be subject to the investment
regulations of the Zones from which the capital departs and in which it enters.
Article 16
Disputes between foreign investors and Iranian parties shall be settled in accordance with
contracts and written agreements.
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