Foreign

Investment

in Iran

Outline Policy for Attracting FDI

Why Invest in I.R.IRAN

Organization for Investment, Economic & Technical Assistance of Iran O.I.E.T.A.I

“ Foreign Investment Promotion and Protection Act” (FIPPA)

Foreign Investment Services Center (FISC)

Foreign Investment Licensing Procedure

Incentives of Investment in Iran (Tax, Custom, Free Zones)

The Policy

Contribution to Economic Development

Upgrading Technological & Management Skills

Improving Products with High Quality and Competitiveness in International Scale

Increasing Employment & Exports

Sharing Benefits and Risks on Equal Term without Discrimination

At the Cross Roads of East and West

Why Iran?

Iran as a hub for the CIS/MENA market

Low effective rate of taxation

25% flat corporate tax rate

Tax holidays

No tax on dividends or capital gains

Quality infrastructure

319 airports, 13,000 km railroads

20 Ports

Cheap energy

Electricity @ 1.5 ¢ per kWh

Natural gas @ 1.5 ¢ per M³

Affordable labor

Abundant natural resources

Export promotion incentives

Full tax exemption

Export prize

Duty refund on raw material imports

Soft loans

Why Iran?

Continue…

OIETAI

Founded in June 1975

The main official authority to promote and protect Foreign Investment

Taking care of all issues related to foreign investment such as:

Admission Importation Utilization Repatriation

Ministry of Economic Affairs

& Finance

OIETAI Foreign

Investment Board

Foreign Investmen

t Dep.

Foreign Investment

Services Centre (FISC)

Types of Investments

Direct Investment

(Equity Participation)

in Greenfield & Brownfield Projects

Investment through Contractual Arrangements

(Non-Equity Forms):

Buy Back Arrangements

BOT Schemes

The Legislation

The Foreign Investment Promotion and Protection Act (FIPPA):

• Substitutes Former LAPFI

• Ratified in 2002

• Implementing Regulations of the FIPPA

Centre of Investment and Consultancy Services

Continuous study and investigation of investment barriers, proposing solutions to correct the weaknesses through the approval of new law and regulation.

Developing a map of country’s investment incentives and provincial advantages.

Establishment of investment service centers in Provincial chambers

Holding Training courses, workshops and etc. for corporate managers and companies interested in attracting FI including negotiation, contracting, financial solutions and other related issues in cooperation with UNIDO and institutions like EY, Deloitte ,KPMG and etc.

Continue…

Collection of data from Brownfield and Greenfield plans and categorizing and refining them according to the pattern proposed by the investors.

Preparation and distribution of Investment Guidebook.

Establishing a private Investment fund for the use of private sector in order to secure bank facilities.

Identifying foreign investors and domestic investors and establish a proper link between them.

Proposal for establishing specialized courts for investment disputes.

Features of Investment under FIPPA:

No Limitation on:

Equity Percentage,

Volume of Investments,

Profit Transfer,

Capital Repatriation

Types of Capital Imported

No Import / Export Restriction

Some other Features of FIPPA

Article 35 Services

3 years Multi-entry Visa

3 years Residence Permit

Work Permit

Risks Covered By FIPPA

Currency Transfer

Nationalization &

Expropriation

Government Intervention

and Breach of Contracts

by Government

Foreign Investment Services Center (FISC)

FISC

Tax Organization

Any Organization as per the case

Central Bank

of Iran

Office for registration

Companies & Industrial

Property

Department of Environment

Ministry of Industry, Mine

&Trade

Ministry of agriculture

Ministry of Labor

Ministry of Foreign Affaires

I.R.I Customs Administration

FISC

Facilitation of Issues related to the admission and activities of FDI

Facilitation of official procedures for required permissions & licenses

Coordination with Executing Agencies Related to Foreign Investment

Key Services Offered by FISC

Guidance to foreign investors concerning investment in Iran.

General supervision of foreign investment projects.

Necessary coordination with all relevant authorities, prior to the

issuance of the investment license including:

• the declaration of establishment

• the environment protection license

• the permits for subscriptions to water, electricity, fuel and telephone

• the license for exploration and exploitation of mines, etc.

Continued

registration of joint venture company

registration of order for importation of machinery

and equipments

issues related to importation and repatriation of

capital, customs and tax affairs, etc.

Investment Licensing Procedure

Submission Of

Application

Final License

Issued by Minister

of Economic Affaires

and Finance

Draft License

Communicated

Preparation And

Submission Of a Report

Foreign

Investment

Board

OIETAI

Max 5 Days Max 10 Days

Incentives and Benefits of Foreign Investment in Iran

Tax Incentives Fixed corporate income tax at a flat rate of 25%

Income Tax with Rate of 0.0% Duration of Exemption

Industry, Mining & Services (Hospital & Hotels) 5 Years

Industry, Mining & Services (Hospital & Hotels) in Industrial Parks and Special Economic Zones 7 Years

Industry, Mining & Services (Hospital & Hotels) in Less Developed Areas 10 Years

Industry, Mining & Services (Hospital & Hotels) in Less Developed Areas located at Industrial Parks and Special Economic Zones

13 Years

100% of Income Derived Agricultural Activities Perpetual

100 % of Income Derived From Export of Services ,non-oil goods, agricultural Products Perpetual

Tax Incentives

After the Termination of Tax Holidays Period:

Total Taxable income <= registered Capital 50% of income is free of tax

In less developed areas:

Total Taxable income <= double of registered Capital 100% of income is free of tax

Investment Incentives in Free Zones

7 free Zones in Iran: • 2 in North-West (Aras, Makou) • 1 in North (Anzali) • 3 in South (Kish, Geshm, Chabahar) • 1 in South-West (Arvand)

20 Years Tax Exemption for All Economic Activities No needed Visa for Entrance of Foreigners Custom Exemption for Raw materials and Industrial

machineries of Producing units Possibility of Exporting Products to The Mainland Easy provisions for Re-export and Transit of Commodities

Foreign Investment Office Tel: +98 21 33967755 – 33967075

Fax: +98 21 33967864

Foreign Investment Services Center Tel: +98 21 33967749 – 33967766

Fax: +98 21 33967774

No. 82 Vozara Ave., P.C.: 1511917613 Tehran –

IRAN Tel.: (+98-21) 8871 6708

Fax: (+98-21) 8871 0461 -2 E-mail: investment@tccim.ir

Website: www.tccim.ir