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 Export Low effective promotion rate of taxation Quality incentives Cheap energy infrastructure Affordable labor 25% flat Full tax corporate tax exemption Electricity @ 1.5 rate 319 airports, Abundant Export prize ¢ per kWh Tax holidays natural 13,000 km Duty refund on Natural gas @ railroads resources No tax on raw material 1.5 ¢ per M³ dividends or 20 Ports imports capital gains Soft loans
Why Iran?
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Ministry of OIETAI Economic Affairs & Finance Founded in June 1975 OIETAI The main official Foreign authority to promote and Investment protect Foreign Investment Board Taking care of all issues Foreign related to foreign Investmen investment such as: t Dep. Admission Importation Utilization Foreign Repatriation 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) Tax Any Organization I.R.I Customs Organization as per the case Administration Central Bank of Iran Ministry of Foreign Affaires FISC Office for registration Companies & Industrial Property Ministry of Labor Department of Ministry of Ministry of Environment Industry, Mine agriculture &Trade
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 Preparation Foreign Draft And Issued by Minister OIETAI License Investment Submission Communicated of Economic Affaires Board Of a Report and Finance Max 10 Days Max 5 Days
Incentives and Benefits of Foreign Investment in Iran
Tax Incentives Fixed corporate income tax at a flat rate of 25% Duration of Income Tax with Rate of 0.0% Exemption 5 Years Industry, Mining & Services (Hospital & Hotels) 7 Years Industry, Mining & Services ( Hospital & Hotels ) in Industrial Parks and Special Economic Zones 10 Years Industry, Mining & Services (Hospital & Hotels) in Less Developed Areas Industry, Mining & Services (Hospital & Hotels) in Less Developed Areas located at 13 Years Industrial Parks and Special Economic Zones Perpetual 100% of Income Derived Agricultural Activities Perpetual 100 % of Income Derived From Export of Services ,non-oil goods, agricultural Products
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
No. 82 Vozara Ave., Foreign Investment Office P.C.: 1511917613 Tehran – Tel: +98 21 33967755 – 33967075 IRAN Fax: +98 21 33967864 Tel.: (+98-21) 8871 6708 Foreign Investment Services Center Fax: (+98-21) 8871 0461 -2 Tel: +98 21 33967749 – 33967766 E-mail: investment@tccim.ir Fax: +98 21 33967774 Website: www.tccim.ir
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