Tel: [phone] www.investiniran.ir

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• Foreign Investment in Iran
• Laws and Regulations,
• Advantages, and
• Investment Opportunities
• Presentation by Sharagim Shams
• Deputy Director General, Foreign Investment
  Office
• Organization for Investment,
• Economic and Technical Assistance of Iran
• (OIETAI)
• On the occasion of UBCCE Third Business Forum

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Presentation Highlight

• 1.General Information about Iran
• -Fundamental Macroeconomic Reforms
• - Privatization
• 2.Foreign investment in Iran Policies, Laws
  and Regulations and advantages

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General Information about Iran
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Geography

• Location
• -Middle East, bordering Iraq,Turkey, Pakistan,
  Afghanistan and Turkmenistan t Oman Sea and the
  Persian Gulf from south and the Caspian Sea from
  north,
• -Strategic location on the Persian Gulf and
  Strait of Hormuz, which are vital maritime
  pathways for crude oil transport

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Area 1.67 million km² Population 71.5 million
Literacy ratio 85 30 Provinces
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Climatic Characteristics Numerous Diversity
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Economy
GDP US 382.3 billion, GDP per capita US
5346 GDP (PPP) US 842 billion , GDP per capita
(PPP) US 12,800 GDP average annual growth
rate(2004-2008) 7.5 Trade Balance US 45
billion surplus Import (FOB) US 55
billion Export US 100
billion Export - commodities petroleum 80,
chemical and petrochemical products, fruits and
nuts, carpets Import-Commodities Industrial raw
materials and intermediate goods, capital goods,
foodstuffs and other consumer goods, technical
services,
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Export Import Trends
Value US Billion
Imports
Exports
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Main Trading Partners (Top 10)
Non-Oil Export Partner
Import Partners
Value US Million
IMPORTS SHARE
Capital 16
Intermediate 67
Consumer 13
Other 4
Source I.R. Iran Customs
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Irans Main Advantages

• Diversified, Hydrocarbon-rich Economy
• 4th largest oil producer in the World
• 2nd highest gas reserves in the World
• Largest industrial base in the MENA region
• 10th Country on Tourism Attractions and 5th on
  Ecotourism
• High GDP growth rate
• 4th to 9th rank in production of Zinc, Lead,
  Cobalt, Aluminum, Manganese and Copper in the
  world.
• 4th rank on diversity of Agriculture products in
  the world.
• 6 Free Trade-Industrial Zones
• 19 Special Economic Zones

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• Recent Developments
• Comprehensive Tax Reform
• Fixing corporate income tax at a flat rate of
  25, while under the previous law, companies were
  subjected to both a 10 corporate tax plus their
  dividends being taxed at ascending levels up to
  54.
• Introduction of Many New Tax Holidays and
  exemptions
• ? Creation of a Central Tax Authority.

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• Floating Single Exchange Rate System
• Unification from March 2002.
• Less than 5 Fluctuations.
• Trade System
• Replacement of Non-tariff Barriers by Tariffs.
• Rationalization of the Tariffs (35.6 to 16.5)
• Privatization
• More than 20 billion USD Privatized.

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Fundamental Macroeconomic Reforms
(privatization)

• Expediency Council Resolutions
• Opening up new areas formerly closed to
  private local/foreign investors.
• The general policies of Article 44 of the
• Constitution of the Islamic Republic of Iran

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Foreign investment in Iran policies , laws
and regulations and advantages
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Foreign Investment Policy

• Contribution to Economic Development
• Financing Projects, Upgrading Technological
  Management Skills,
• Sharing Benefits and Risks on Equal Term without
  Discrimination
• Advantages in Enhancing Products and Output
  Quality, Increasing Employment Exports

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The Body in Charge
The Organization for Investment is the sole
official authority for the promotion of foreign
investments in the country and for the
investigation of all issues pertaining to foreign
investments. (FIPPA , Article 5)
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The Legislation

• The Foreign Investment Promotion and Protection
  Act (FIPPA)
• Substitutes Former LAPFI
• Ratified in 2002
• By Laws
• Implementing Regulations of the FIPPA

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Features of FIPPA

• Types of Investments
• Direct Investment
• (Equity Participation) in All Areas Open to
  Iranian
• Private Sector
• Investment through Contractual Arrangements
• (Non-Equity Forms)
• -Buy Back Arrangements
• -Civil Partnership
• -BOT Schemes

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Features of FIPPA

• Areas of Investment
• All Areas in Industry, Mining, Agriculture, and
  Services
• -In Greenfield Projects
• -In Brownfield projects and existing companies

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Features of FIPPA

• Risks Covered under FIPPA
• All non-Commercial Risks,
• i.e. Currency Transfer, Nationalization,
  expropriation, Government Intervention and Breach
  of Contracts by Government

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Features of FIPPA

• Boundaries of Investment
• No Limit on Equity Percentage,
• No Limit on Volume of Investments,
• No Limit on Profit Transfer,
• No Limit on Capital Repatriation
• No Limit on Types of Capital Imported
• No Import / Export Restriction

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Features of FIPPA

• Settlement of Disputes
• Between Investors (Free),
• Between Investors and Government
• Amicable
• Domestic Courts
• Ad-hoc Arbitrations
• ICSID (International Center for Settlement of
  Investment Disputes)
• Underway

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Features of FIPPA

• Organization
• Organization for Investment, Economic and
  Technical Assistance of Iran (OIETAI)
• Foreign Investment Board

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Procedure For Foreign Investor( Phases 1 to 4 )

• 1. Identification and Selection of Investment
  Project
• 2. Obtaining Preliminary Permit from Relevent
  Iranian Organization
• 3. Issuance of Foreign Investment License
• 4. Implementing of Project

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Features of FIPPA

• Investment Licensing Procedure

Submission Of Application
? Simplified, Short and Transparent
Final License Issued
Draft License Communicated
Preparation And Submission Of a Report
Foreign Investment Board
OIETAI
Max 15 Days
Max 30 Days
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Why Invest in Iran? (Advantages)

• 1.Strategic Location
• 2. Market Potentials Proximity
• 3. Labor Privileges
• 4. Developed Infrastructure

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Advantages (contd.)

• 5. Low Utility Production Cost
• 6. Abundant Natural Resources
• 7. Climatic Characteristics
• 8. Fiscal Incentives

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• Foreign investment
• Statistices
• under the
• Foreign Investment promotion protection Act
• (FIPPA)

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Foreign Investment under the Foreign Investment
Promotion Protection Act ( FIPPA)
US million
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Sectoral Distribution of Foreign
Investment(1993 up to March year 2009)
US million
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?Geographical Distribution of Foreign
Investments (1993 to March 2009)
US million
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Features of FIPPA

• Treaties
• - Bilateral Investment Treaties (BIT) with 53
  Countries,
• - Regional Multilateral Treaties with Member
  States of
• Organization of Islamic Conference (OIC),
• Economic Cooperation Organization (ECO).
• - Double Taxation Treaty (DTT) with 44
• Countries

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Contents of BIT

• Promotion of investments
• (most-favored nation treatment)
• Treatment of investment
• Expropriation , losses and compensation
• Repatriations and transfers
• Subrogation

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Contents of BIT

• Dispute settlement procedure
• Validity of the agreement
• Admission and establishment,
• Scope and definition of investment

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International Memberships

• Multilateral Investment Guarantee Agency (MIGA)
  since 2003
• World Association of Investment Promotion
  Agencies (WAIPA) since 1998

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International Co-operations

• World Bank Project for Enhancing
  Institutional Capacity of Foreign Investment
  Promotion in Iran
• FIAS Assessment of Investment Environment in
• Iran
• UNIDO Project for Capacity Building in
  Industrial
• Investment Promotion
• UNCTAD Preparation and Launch of WIRs and
• certain other survey studies

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Contact Information

• Organization for Investment, Economic and
• Technical Assistance of Iran( OIETAI)
• Address Davar Ave. Tehran P.O.Box 11365/4618
• President of OIETAI
• Tel [phone]
• Fax[phone]
• Foreign Investment Office
• Tel [phone] 33967075
• Fax [phone]
• Websites www.investiniran.ir www.iio.ir
• E-mails fisc_at_investiniran.ir
  info_at_investiniran.ir