Iran has a young and dynamic population and a thriving business community. It is the last remaining major emerging economy in the world to enter the global market.
The economy of Iran has the capability and infrastructure to become the biggest economy in the middle east and business investment in Iran have high rates of return. The average rate of return on investment in real-estate, telecom, mining and oil industry of Iran is more than 44.9% and the inflation rate of the economy for 2015 was under 14.0%.
Foreign company registration in Iran
Foreign investors can now establish their company with 100% ownership of the shares and control of their business. This can be an advantage to some of the companies willing to be more involved in the Iranian market providing them with more security and stability as a foreign investors. There are Two types of companies which can be registered for foreign investment opportunities:
- Limited Liability Company
- Joint Stock Company
Limited Liability Company
A Limited Liability Company is defined as a company formed by 2 or more individuals to conduct business transactions and activities. Limited Liability Company is based upon the direct contributions of the partners to the partnership and not by share subscription.
The formations of limited liability partnership is deemed to have taken place when the capital in cash has been fully contributed and when non-cash contributors have been assessed and delivered.
Joint Stock Company
A Joint Stock Company is defined as a company formed by 3 or more individuals to conduct business transactions and activities. Joint Stock Company is based upon the direct contributions of the partners to the partnership and not by share subscription. The formations of Joint Stock Company is deemed to have taken place when the capital in cash has been fully contributed and when non-cash contributors have been assessed and delivered.
Foreign Companies can establish a branch of their company in order to conduct their business in Iran. The Branch will be a foreign company and act as a branch under mother company and may operate in the following areas of activities:
- Post sales service for the goods or services of the mother company.
- Carrying out the contracts terms between Iranians and mother company.
- Plan future investment of the mother company in Iran.
- Collaborate with Iranian experts for business activities in neighbor countries.
- Participate in non-oil exports market in Iran.
- Regulating duties in the areas of clearance from government organizations and services in the fields of transportations, insurance, banking and marketing, etc.
A local branch office of a foreign company is the subordinate of the mother company which carries out the objectives and business transaction for the mother company. The operation of the branch office will be conducted under the name and responsibility of the mother company. The branch office is subject to Iranian laws in areas such as labor, social security, taxation, etc. The government protects the legal rights of a registered branch office as of the mother and domestic companies. Review the below table below to find out more about the types of companies:
Registering a company in Iran and employment
There is a minimum national wage applicable to each sector of activity fixed by the Supreme Labor Council which is revised annually. In 2015 the minimum wage, determined by the Supreme Labor Council, was about US$230 per month (US$2,760 per year). Membership in the social security system for all employees is compulsory. The national poverty line for 4-person households in Tehran was approximately $9000 per year in 2015
Foreign nationals are prohibited from working in Iran unless they receive work and employment permits (even if they are supposed to receive wage and salary outside the Iranian territory).
Trade Laws of Iran that you should know if you set up a company
The general guideline of the custom laws of Iran does not prohibit any other goods from entering the country other than the list below but usually certain permits and licenses are required in order to clear your goods from customs.
- Alcoholic drinks;
- Gambling tools;
- Weapons, ammunition and explosive goods;
- Narcotic drugs;
- Magazines, photos, films and snaps and those goods, which are against religious and national dignity of the country.
- Any type of writings which are against the official religion of the country and /or disturbing discipline and public purity and national dignity.
- Those types of goods which have legitimate and legal prohibition and /or their import and export have not been allowed according to the customs tariff table or special rules
The import of all importable commodities by the governmental or non-governmental importers except in following cases will be subject to registration and receiving import certificate from the Ministry of Commerce upon observing other stipulated rules and regulations.
Trade certificate is a document for import or export of products. Trade certificates are issued by the Chamber of Commerce, Industries and Mines in Tehran or other provinces for the qualified applicants for a period of one year.
The import before export of raw materials and goods needed for manufacturing, finishing, preparation and packaging of export commodities