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GUIDE TO IRANIAN MARKET

States are not required to admit foreign nationals, but if they permit foreigners the right of entrance, they must treat them in a manner consistent with international standards of human respect and civil rights. However, the extent of the enjoyment of these rights is shaped by the political, economic and social orientation of each state. Consequently, foreigners wishing to reside and work in the Islamic Republic of Iran would certainly like to know more about their rights and legal status in this country.

Who is considered foreign national under Iranian law?
What is the Iranian approach to the foreigners rights?
To what extent does the national law govern foreigners travelling to and residing in Iran?
How can foreigners possess immovable property?
Is the permanent residence of a foreigner in Iran, in all cases, a prerequisite for ownership of immovable property?
What types of residence can foreigners have in Iran?
Are foreigners allowed to lease property?
Do foreigners engaged in business, have a transaction right to goodwill?
Are there also special conditions for possessing immovable property by foreigners?
How is a foreigner-owned property safeguarded against expropriation?
What legal protection is foreign capital entitled to when it is utilized?
What about foreigners rights respecting intellectual property?
When a foreign corporation begins operations in Iran, through a branch office or the like, what shall be its major rights?
Are foreigners entitled to hold jobs?
What about taxes which foreign nationals are subjected to?
Are there safeguards against double taxation?
Does the Iranian social security system protect foreign residents?

Who is considered foreign national under Iranian law?

   Persons who are not considered as Iranian citizens in accordance with the provisions set out in Article 976 of the Civil Code.

What is the Iranian approach to the foreigners rights?

   In accordance with Principle 22 of the Constitution of the Islamic Republic of Iran, the honor, life, property, rights, dwellings and jobs of people )whether a national or foreigner) cannot be interfered except where allowed by law. Moreover, the Iranian Civil Code expressly asserts that foreign nationals, except in very few cases, are entitled to their duly recognized civil rights.

To what extent does the national law govern foreigners travelling to and residing in Iran?

   All inhabitants of Iran, including Iranian and foreign citizens, are subject to the various laws and regulations of the Islamic Republic of Iran, except in cases where there is a clear legal exclusion. Foreigners, like Iranians, are protected legally against any infringement on their property and established rights. They are also entitled to refer to the courts and seek justice, or a redress of grievances. In matters relating to their personal status (such as marriage, divorce, inheritance) foreign nationals residing in the territory of Iran, shall, within the limits laid down by bilateral treaties, be bound by the laws of their respective government.

How can foreigners possess immovable property?

   To take ownership of a property for dwelling, launching a business or an industry in Iran, foreign nationals need to procure a special permission from the government. As soon as their acquisition of the immovable property is established, they shall enjoy the same ownership rights that Iranian nationals are entitled to. However, if the foreigner changes his permanent residence (domicile) from Iran to another country, he is required to transfer the title of his immovable property to an Iranian or a duly qualified foreigner.

Is the permanent residence of a foreigner in Iran, in all cases, a prerequisite for ownership of immovable property?

   No. There is an exception in favor of non-residents. The Council of Ministers may grant the right of ownership of dwelling places to foreigners who lack a permanent residence permit but travel regularly to Iran for tourism and seasonal recreation.

What types of residence can foreigners have in Iran?

   Two types: permanent and temporary. Foreigners have permanent residence when they choose a legal domicile in the territory of the Islamic Republic of Iran. Otherwise, their residence shall be considered temporary.

Are foreigners allowed to lease property?

   Foreigners, like Iranian nationals, have the right of leasing houses, apartments, offices, etc. for dwelling or business purposes. In the event that the lease contract is drawn up at a notary public and the tenancy term exceeds five years, consent of the Property Registry should be acquired.

Do foreigners engaged in business, have a transaction right to goodwill?

   In Iran, goodwill is usually transacted with the shop, factory, office, and other types of business premises. The foreigners right to goodwill is a recognized fact and they are allowed to sell and buy these benefits that accrue to a business person from being well-known to customers.

Are there also special conditions for possessing immovable property by foreigners?

   No, there are not. Foreigners may buy and sell cars, rugs, television sets, telephone lines, and other items of movable property in the same manner that Iranian nationals do.

How is a foreigner-owned property safeguarded against expropriation?

   International law recognizes that every state has a legitimate right to expropriation. However, it should be accompanied with adequate compensation, and Iranian laws are based on this rule. For instance, in case of foreign investment, the Iranian government guarantees fair compensation where the promulgation of a special legislation deprives the foreign investor from ownership.

What legal protection is foreign capital entitled to when it is utilized?

   The government of the Islamic Republic of Iran extends its protection to all foreign capital imported into the country, according to the Law Concerning Attraction and Protection of Foreign Investment, and the profits earned therefrom.
Legal entitlements, exemptions and facilities for capital investment provided under different laws, including laws pertaining to taxation, will also be applicable to foreign investors. For example, like Iranian nationals wishing to engage in economic activities in the Free Trade-Industrial Zones, foreign investors enjoy the same 15 year tax holiday and are equally entitled to the flexible labor and social security regulations in these zones.

What about foreigners rights respecting intellectual property?

   Iran has its own trademark and patent law, and is also a party to the Paris Convention for Protection of Industrial Property. Foreigners' rights to intellectual property are recognized and safeguarded in these regulations. As for copyright, Iran is not a member of the Berne Convention for the Protection of Literary and Artistic Works, but the national law governing copyright shall protect the rights of Iranian and foreign nationals who create artistic, literary or technical works in the Islamic Republic of Iran. It is on the basis of this law that Iranian courts have ruled in favor of the creators of computer programs.

When a foreign corporation begins operations in Iran, through a branch office or the like, what shall be its major rights?

   The branch or representative office of the foreign company shall be covered by Iranian laws in areas such as labor, social security, taxation, etc. The government protects the legal rights of a registered branch or representative office in exactly the manner as it does in the case of Iranian companies and establishments.

Are foreigners entitled to hold jobs?

   Employment of foreign nationals in Iran is possible within the framework of the provisions and procedure stipulated in the Labor Law of the Islamic Republic of Iran. The general policy of the country is aimed at meeting its labor requirements through domestic manpower. However, the employment of foreigners is not ruled out when their expertise is needed. Work permits for foreigners will be issued, extended or renewed for a period of one year. In special cases, temporary work permit valid for a maximum period of three months, may be granted to foreigners without observing the respective procedure.

What about taxes which foreign nationals are subjected to?

   In respects to the payment of income taxes and enjoyment of tax incentives and exemptions, foreigners' duties and rights are very similar to those of Iranian citizens. There are, however, minor exceptions.

Are there safeguards against double taxation?

   In order to prevent double taxation, the government of Iran has signed agreements with some foreign countries for the protection of their citizens working in Iran. Other facilities have also been devised. For instance, under the rule of reciprocity, airlines and shipping companies of certain countries are exempt from taxation on income earned in Iran by transporting passengers and cargo.

Does the Iranian social security system protect foreign residents?

   Principally, foreigners working in Iran enjoy the advantages resulting from the social security system's provisions in the same manner as Iranian nationals, except in cases where special arrangements have been made in accordance with bilateral or multilateral treaties and agreements between Iran and other countries.

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