IRAN after S anctions 2016 April - 14 The country of Iran, at a - PowerPoint PPT Presentation

IRAN after S anctions 2016 – April - 14

The country of Iran, at a Glance • Industry, Resources • GDP • HR • Iranian Calendar Opportunities and challenges Iran's financial system • Banks • Currency exchange • International Transaction • TAX system • Double Taxation Agreement • BULGARIA – IRAN Foreign Companies in Iran , Free Trade zones Intellectual Property , Employments , Courts in IRAN Eurofast Global In IRAN

The country o f Iran, at a Glance Borders with 7 countries • Iraq : 1458 Km IRAN • Turkmenistan : 992 Km • Afghanistan : 936 Km • Area : 1,648,195 Km^2 • Pakistan : 909 Km • Population : 80 millions • Azerbaijan : 759 Km • Turkey : 499 Km • Armenia : 35 Km • Sea access: 2700 Km TEHRAN North : Caspian Sea South : Persian gulf • Area : 617.73 Km^2 and gulf of Oman • Population : • 220,000 km Roads Urban 8.8 millions Metro 15.2 millions • 12,000 km Railway • 15 Commercial Ports Tehran hosts • 54 Airports Tehran (+3.5 GMT) 45% of Iran's industries

IRAN Resources th in Natural resources Largest economy in the world in Oil and Petrochemicals Iran’s petrochemical exports to over Zinc reserves in the world 4 th producer in the world 60 countries in 2011 reached $14Billion USD. Gas reserves in Global natural 15% of the world’s proven gas reserves Copper reserves in the world 9 th producer in the world Cement producer in the region 8 th in the world Ranking of Iran in other Sectors Crude Oil Producer in the world 4 th in Variety of agricultural products 5 th 11% of the world’s proven oil reserves Ecotourism 10 th 11 petro mechanical complexes Rating in the historic attractions

IRAN Industry Sectors Oil & Gas Industry & Transportation Agriculture ICT Tourism Health Mining Investment Groups; 2,20% Pharmaceutica Annual Industry Return on Equity June 2014 l; 2,40% Professonal 70% 59,60% Auto Services ; 2,10% 55,40% 60% 53,00% Manufacturing; 2,90% Market Capitalization 50% Iranian Industries 35,90% Petro 40% 33,40% Telecom; 32,20% June 2014 Chemicals; 6,90% 30% 24,30% 20% Metal 10% Industry; Other 11,30% 0% Banks; Industries; 11,70% 20,90% Financial Services; 14,60%

GDP Components GDP growth +4.3% (IMF, 2014 est.) GDP Nominal: $416.5 billion Services 45% PPP: 1.357 trillion GDP by component Household consumption (45.4%) Industry 44% Government consumption (14.1%) Gross fixed investment (31.1%) Manufacturing 11% Investment in inventories (1.2%) Exports of goods/services (20.8%) Agriculture 10% Imports of goods/services (−12.7%) Inflation (CPI) 9.6% (Jan 2016)

Human Resources Agriculture Services 25% 44% 80.555.939 Industries Current Population 31% (2016-04-03) Field of study 2010 Young Society Engineering and construction 31% One of the highest 0-14 years: 23.7% rate in the world 15-24 years: 18.7% 23% Social science, business and law 25-54 years: 46.1% Humanities and arts 14% 55-64 years: 6.3% 65 years and over: 5.2% 10% Science

Iranian Calendar New Year : 21 March (Each 4 years will be on 20 March) Iranian MARCH S S M T W T F Calendar Solar Hijri calendar Fiscal year 21 March Saturday – Wednesday : 8 hours Working Days Thursday : some companies/ state Offices/ universities are off or working only 6 hours Friday : week-end Holiday S M T W T F S IRAN S M T W T F S EUROPE

Opportunities and challenges for investors Opportunities Challenges 1. The Scale 1. Sanctions will be gradually lifted and • $1.2 trillion economy (PPP) sometime is unclear • Large population (80m) & sizeable middle class 2. Financing 2. The resources • Few foreign banks deal with Iran currently • Oil, gas and minerals reserves 3. Competition & finding a partner 3. The diversified economy • Large players control much of the market • Opportunities in almost all sectors 4. IP infringement and fake goods • Strong industrial base • Issue for MNCs 4. The skills 5. Custom duties • Population is well-educated & digital savvy • Can make an import-export model difficult • Large group of experienced expats abroad 5. The need for investment • Economy is in major need of new capital

Banks in IRAN 3 6 22 Private banks Governmental Governmental • Ansar Bank • EN Bank Commercial banks Specialized banks • Tejarat Bank • Parsian Bank • Karafarin Bank • Refah Bank • • Bank Melli Iran Keshavarzi Bank (Agriculture) • Bank Saderat Iran • Saman Bank • • Bank Sepah Bank Maskan (Housing) • Bank Pasargad • Bank Mellat • • Post Bank of Iran Bank of Industry and Mine • Sarmayeh Bank • Hekmat Iranian Bank • Export Development Bank of Iran • Sina Bank • Tourism Bank • Cooperative Development Bank/ • Ayandeh Bank • Iran Zamin Bank • Gharzolhasaneh - Mehr Iran Bank • City Bank • Middle East Bank Investment institutions (7) • Bank Day • Gharzolhasaneh - Resalat Bank • TTBank • Ghavamin Bank • Ghadir Investment Company • Turquoise Partners • AminIB • Mofid Securities Co. • EN Bank • MellatIB • Pasargad Bank

Bank Account Types Bank Account Types in IRAN • • • Individual Iranian Currency Current account (Without Interest rate) • • Legal entity Other Currency • Deposit account (Euro, Dollar, ext.) • Daily calculated (approximately 17%) • Short term (1, 3,6,9,12 months) • Long term

Account Opening General Conditions for Individual • Introduction by another bank account holder • Approval letter from Central Bank (background check) Foreign Individual • Reference letter from account holder • Valid resident permit General Conditions for Legal Entity • Written request by the company • Certified copy of the Articles of Association. • Certified copy of financial standing of the company. • Company's registration, board members, managing director and authorized signatories. • Minutes of the board of directors Foreign Legal Entity • Proof of identification • Registration under Iranian laws • Bank application forms. and regulations

Currency exchange Iranian currency : Rial (IRR) ریام $ € ¥ Banks Currency exchange – Lower exchange rate offices – Limitation – Higher exchange rate Up to a USD 5000 – No limitation (In special cases up to USD 10000) – International Transaction Send to Any Account in the world Usually 1 or 2 working days, Maximum 3 days Impossible or very limited now (Bank swift is in reconnecting process)

International Transactions Solution ریام $ IRR € ¥ Exchange Any Bank in the Offices World money Internet Banking Pay to Exchange offices online E-Banking services

Taxation System The Iranian Tax Regime Real Estate Income Tax Employment Income Tax Income Business & Professional Income Tax Taxes Corporate Income Tax Direct Fiscal year : 21 March Taxes Tax on Incidental Income Tax declarations: Tax on Transfer of Real Properties Property Maximum 4 months after fiscal year Inheritance Tax Taxes Stamp Duties Value-added Tax Indirect Taxes Tax on Imports General Individual Tax Rates Income in IRR Rate Salary Tax Rates 15% Up to 30,000,000 (US$1,230) annual taxable income Rate 20% 30,000,000 to 100,000,000 (US$4,767) 0% Up to IRR 138,000,000 US$ 5,000 25% 100,000,000 to 250,000,000 (US$9,917) 10% of the excess over Up to IRR 966,000,000 US$ 32,500 30% 250,000,000 to 1,000,000,000 (US$36,666) 20% of the excess over Over IRR 966,000,000 US$ 32,500 35% In excess of 1,000,000,000 (US$36,666)

Taxation System Exemptions Ex- Business Activity Duration emption Taxation system for foreign investors in Iran Agriculture 100% Perpetual Similar to Local invertors Industry and Mining 80% 4 Years Industry and Mining in 100% 20 Years Less-Developed Areas Tourism 50% Perpetual Export of Services & 100% During 5th Non Oil Goods Development Plan Handicraft 100% Perpetual Educational & Sport 100% Perpetual Services Cultural Activities 100% Perpetual Salary in Less- 50% Perpetual Developed Areas All Economic Activities 100% 20 Years in Free Zones

Double Taxation Agreement List of Countries Signed the Agreement to Avoid Double Taxation with Iran • • • Algeria Kazakhstan Spain • • • Armenia Korea Sri Lanka • • • Austria Kuwait Sudan • • • Azerbaijan Kyrgyzstan Switzerland • • • Bahrain Lebanon Syria • • • Belarus Malaysia Tajikistan • • • Bulgaria Oman Tunisia • • • China Pakistan Turkey • • • Croatia Poland Turkmenistan • • • Cyprus Qatar Ukraine • • • France Romania Uzbekistan • • • Georgia Russia Venezuela • • • Germany Serbia Vietnam • • Indonesia Slovenia • • Jordan South Africa

Double Tax Treaty Agreement BULGARIA – IRAN 2004 2006 2007 On April 28, 2004, Bulgaria and Iran signed agreement for the avoidance of a double taxation which entered into force two years later, in June 2006 and is applicable as of 2007. An interesting aspect of the treaty with Iran are the withholding tax rates, with dividend payments taxed with 7.5 % of the gross amount and interest and royalty payments taxed with a maximum 5 % rate . Worth noting is the exemption of a tax on interests paid to state, municipal and/or other government institutions.