Foreign Investment in Iran Outline Policy for Attracting FDI Why - - PowerPoint PPT Presentation

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
• rder 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

• f 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

• f 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