I   R   A   N    C   H   A   M   B   E   R    O  F    C   O   M   M   E   R   C   E ,   I   N   D   U   S   T   R   I   E   S    &    M   I   N   E   S

Home | About ICCIM | Local Chambers | Publication | Members' Directory | Business contact | About Iran | Links | Contact Us

GUIDE TO IRANIAN MARKET

As reflected in its preface, the Law On the Manner of Administration of the Free Trade - Industrial Zones was passed for the express purpose of facilitating comprehensive, sustainable social and economic development. The legislation foresees the accomplishment of infrastructural requirements, boosting social development and generally promoting qualitative and quantitative economic growth. The law encourages foreign and domestic investment; international banking participation; high technology industrialization and promotes an active presence for the Free Zones in global and regional markets. The three Free Trade-Industrial Zones are the islands of Kish and Qeshm in the Persian Gulf and Port Chahbahar on the southern border of the Islamic Republic of Iran.

Which rules govern the economic activities in the Free Zones?
Is there any independent authority for administering the Zones?
What are the conditions for buying and leasing properties in the Free Zones?
Are there any special advantages foreseen in the rules for investors in the Zones?
What things are considered capital under the rules of the Free Zones?
In the Free Zones, how are disputes between the foreign investor and the Iranian partner of the joint-venture settled?
How is the registration of companies and intellectual properties accomplished?
Are export and import activities completely unrestricted in the Zones?
And the taxes?
Do Foreigners need visas for entering the Free Zones?
Are all types of banks allowed to operate in the Free Zones?
And Insurance Companies?
What about Employment and Social Security in the Free Zones?

Which rules govern the economic activities in the Free Zones?

   The provisions of the Law on the Manner of Administration of the Free Trade-Industrial Zones with subsequent amendments and the relevant decrees of the Council of Ministers are the primary legal sources for regulating economic activities and enterprises in the Free Zones.

Is there any independent authority for administering the Zones?

   Yes, there is. Each Free Zone is administered by its own Authority and is organized as a company, with an autonomous legal status. The company's capital belongs to the government of the Islamic Republic of Iran. Issuance of permits for all manner of authorized economic activities, construction of buildings and installations and
undertaking various occupations by natural and legal persons, within the boundaries of a Free Zone, rests solely with the respective Authority. The Authorities are empowered to implement all regulations pertaining to the establishment of production units, importation and exportation of goods, employment of manpower, social security and insurance, issuance of entry visas to foreign nationals, and the like.

What are the conditions for buying and leasing properties in the Free Zones?

   The utilization of land and national resources belonging to the government within the Free Zones and the sale or lease of properties to Iranian nationals, whether natural persons or companies, are determined by each Authority according to the respective regulations. As for private ownership of Iranian nationals residing in the Free Zones, they shall enjoy the same rights of ownership of land and properties that prevail in the rest of the country. Renting of land to foreign nationals is permitted. However, the sale of land to foreigners or to companies whose capital is wholly or partially owned by foreigners, is prohibited.   

Are there any special advantages foreseen in the rules for investors in the Zones?

   All natural and legal persons and institutions, whether Iranian or foreign, as well as international organizations, may either independently or jointly with each Authority and their affiliated companies, or jointly with each other, invest in the Zone. Foreign investors may participate in the economic activities of the Free Zone in any investment ratio they wish to. The legal rights of foreign investors whose investment is approved by the Council of Ministers, are guaranteed and protected. Fair compensation for damages shall be made by the government, in cases where the capital of foreign investors is nationalized or expropriated.
   Repatriation from the Free Zone of net profits, the initial capital and gains resulting from economic activities of foreign investment is permitted. The authority of each Free Zone is obliged to issue a permit of transfer within one week from the date of the receipt of an application for such repatriation. Investors may transfer their shares to other investors with the approval of the respective Authority.
   In principle, the movement of capital and expatriation of profits generated by economic activities and commercial operations in the Free Zone is free and permitted, without let or hindrance.   

What things are considered capital under the rules of the Free Zones?

   As defined in Article 3 of the Regulations on Investment in the Free Zones, capital shall include:
The national currency, i.e., the Rial and foreign currencies convertible in the Free Zones; machinery, equipment, accessories and tools of work; industrial property rights resulting from patents, technical know-how, trademarks and commercial names; land air and sea transport vehicles related to the subject of investment; all or part of the transferable net profit obtained in the Free Zones and added to the principal capital or utilized in other activities authorized under the rules of the Free Zones.
In certain cases, at the discretion of the Free Zone Authority, raw materials and semi-manufactured parts may be designated as a portion of the foreign investment.

In the Free Zones, how are disputes between the foreign investor and the Iranian partner of the joint-venture settled?

   Such disputes are resolved on the basis of written contracts and agreements concluded between the parties concerned. The settlement of differences can be achieved by means such as conciliation and arbitration or court litigation.

How is the registration of companies and intellectual properties accomplished?

   Registration of ships, vessels and planes as well as companies, institutions and branches of Iranian or foreign companies shall be established in the Free Zone, upon submission of the required documentation.  The Registration Bureau of the Zone shall also handle the applications for registration of trademarks and names, patents, and industrial designs.

Are export and import activities completely unrestricted in the Zones?

   The exchange of goods between each Zone and outside the country is excluded from the provisions of the Export/Import Regulations. However, exchange of goods between the Zone and the rest of the country, whether of a commercial nature or by travelers, is governed by the general national regulations on the export and import of goods. Importation of goods produced in the Free Zones, into other parts of the country, is exempt from payment of all or a part of customs duties and commercial benefit tax, equal to the added value thereof in the Zone. Importation of goods produced in the Free Zone in which all or parts of their raw materials are supplied domestically, shall be exempt wholly or partially from payment of customs duties and commercial benefit tax, in proportion to the domestic raw materials component of the product.

And the taxes?

   Natural and legal persons, whether Iranian or foreign nationals, who are engaged in any kind of commercial or manufacturing activities in the Free Zones, are exempt from payment of tax on their revenues and assets for fifteen years, as from the date their business operation commences.

Do Foreigners need visas for entering the Free Zones?

   For direct entry into and exit from each Free Zone through authorized points, foreign nationals are not required to obtain visas in advance. The police shall affix the seal of a residence permit on the valid travel documents of such foreign citizens. The respective residence permit is issued for a period of two weeks and may be extended up to six months upon the request made by the Authority. For entry into Free Zones through the mainland of Iran, foreign nationals are obliged to obtain a visa from the Iranian consulates abroad. Foreigners who wish to travel to other parts of the country after their entry into the Zone, are required to obtain a permit from the local representative office of the Iranian Foreign Ministry.  

Are all types of banks allowed to operate in the Free Zones?

   Establishment of Iranian banks and credit institutions with domestic and foreign capital, as well as setting up branches of Iranian and foreign banks and credit institutions, are permitted in accordance with the respective regulations. The banks can be engaged in operations like opening letters of credit and rendering similar services to businesspersons. Offshore activities are also allowed for the banks, if they use foreign currencies. Foreign exchange dealers may operate in the Zone upon the authorization of the Authority.

And Insurance Companies?

   Establishment and activity of Iranian insurance firms with domestic and foreign capital, opening of their branches and representatives offices as well as setting up of insurance agency institutions are allowed in the Free Zones on the basis of the rules set forth by the Council of Ministers.

Home | About ICCIM | Local Chambers | Publication | Members' Directory | Business contact | About Iran | Links | Contact Us

Designed by Mehr Argham Rayaneh