Investment Protection Measures in Iran

Investment Protection Measures in Iran

I.R. Iran’s Foreign Investment Manual

The government of I.R. Iran welcomes foreign investments and urges all the foreign investors to attentively peruse Iran’s Foreign Investment Promotion and Protection Act (FIPPA) and its executive bylaws to know their own rights and be informed of the facilities and protections they may enjoy as well as the legal obligations and requirements caused by investing in Iran.

In this manual, first the process of looking into the applications by foreign investors to the Investment Organization of Iran is briefly discussed. Then, some articles from FIPPA and its bylaws, referring to guarantees given to the investors, their rights, facilities granted, the protection extended as well as their commitments and obligations will be offered. The last section is devoted to entry and registration procedures for foreign investments once the investment permit is issued.

1-The process of examining the applications by foreign investors to the investment organization of Iran up to permit issuance:

The foreign investors who would like to make investments in Iran within the framework of Iran’s Foreign Investment Promotion and Protection Act (FIPPA), need to first fill out a special form (to be obtained either in person or on-line at ) and submit it to the organization. The application is presented by the Investment Organization to the Foreign Investment Council and will be pursued until a permit is issued.
Choosing the form depends on the type of the foreign investment and the agreement concluded between the parties (domestic and foreign investors). The form has to be submitted in English except for when the investor is an Iranian expatriate or from Persian-speaking countries like Tajikistan or Afghanistan.

2-Guarantees and protections:

  • Foreign Capital is guaranteed against nationalization and expropriation, and in such cases the Foreign Investor shall be entitled to receive compensation (Article 9 of the FIPPA).
  • Should laws or government regulations lead to prohibition or cessation of approved financial agreements within the framework of this Act, then the government shall procure and pay the resulting damages (Article 17 of the FIPPA & Article 26 of the bylaws).
  • The purchase of goods and producer services of the foreign investment is guaranteed in cases where a state-run organ is the only buyer or supplier of a product or producer service at a subsidized price (Article 11 of the bylaws).

Rights and facilities:

  •  Foreign investments subject to this Act shall enjoy the same rights, protections and facilities available to domestic investments in a non-discriminatory manner (Article 8 of the FIPPA).
  •  The Foreign Investment and its profits may be transferred in foreign currency or goods (Articles 13-18 of the FIPPA).
  •  Acceptance of foreign investments in all the production, industrial, agricultural, transportation, communications, and services fields as well as in fields related to water, power, and gas supply and energy fields.
  •  The possibility of the referral of investment-related disputes to international authorities (Article 19 of the FIPPA).
  •  The possibility of land ownership in the name of the company (registered in Iran) in joint ventures (Article 24 of the bylaws).
  •  Issuance of visas for three years in Iran for foreign investors, managers, experts and their immediate family members and the possibility of visa renewals (Article 20 of the FIPPA & Article 35 of the bylaws).
  •  The investors are notified of the final decision regarding their applications within at most 45 days (Article 6 of FIPPA).
  •  Having a choice to choose the investment method in the project as FDI or Foreign Investment in all sectors within the framework of “Civil Participation”, “Buy-Back” and “Build-Operate-Transfer” (BOT) schemes (Article 3 of FIPPA).
  •  Acceptance of investments by any natural or legal non Iranian or Iranian person utilizing capital of foreign origin and granting the facilities envisaged in FIPPA to them (Article 1 of FIPPA).
  •  The foreign investor must choose an audit institute out of the audit institutes recognized by the Association of the Official Auditors of Iran to substantiate their financial and annual reports (Articles 1, 22-23 of the bylaws).

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