FOREIGN INVESTMENT in IRAN - rtedc.org · FOREIGN INVESTMENT in IRAN ... • th4 largest producer...

FOREIGN INVESTMENT in

IRAN

Presented by:

Dr. Akbari

Director General for Foreign Economic Relations

Organization for Investment, Economic & Technical Assistance of Iran (OIETAI)

Ministry of Economic Affairs & Finance

www.iio.ir www.investiniran.ir

A presentation for

…

…. June 2013


Takht-e-Jamshid, Shiraz - Iran

IRAN ; An Strategic Country

Presentation Highlights:

1. General Information ……………………………………………. 3 Slides

2. Why Iran? …………………………………………………………… 5 Slides

3. Foreign Investment Regulatory Framework (FIPPA) 5 Slides

4. Foreign Investment Service Center (FISC) …………….. 4 Slides

5. Promotions and Supports ……………………………………. 6 Slides

6. Probable fields of cooperation …………………………….. 2 Slides

GDP (2012, nominal): $ 483 billion GDP per capita: $ 6440 GDP (2012, PPP): $ 998 billion GDP per capita (PPP): $ 13,100

Import/Export Trends Value: US Million

40 685 45 168

58 342

50 173

66 438

60 923 57 030

12 996 14 599 18 070 19 551

26 115

31 506 34 033

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

2006 2007 2008 2009 2010 2011 2012

imports

exports

1.General Information



A Resource-Rich Economy

• Diversified, Hydrocarbon-rich Economy

• 4th largest producer and 3rd holder of oil reserves in the World

• 4th largest producer and 2nd holder of gas reserves in the World

• 10th Country on potential Tourism Attractions and 5th on Ecotourism

• Largest industrial base in the MENA region

• One of the top producers of Zinc, Lead, Cobalt, Aluminum, Manganese and Copper in the world.

• 4th rank on diversity of Agriculture products in the world and a unique climate diversity having 50-60 degree (c) temperature difference in a given time of the year

7

1.General Information - CONT


Targets set by Iran 5th Development Plan on economic aspects

• 20 Billion USD per year investment in Oil and Gas Industry by Private and Foreign investments

• Unemployment down to 7% by making available almost 1 million jobs per year

• Improvements in Public Healthcare and Social Safety Net

• Annual GDP growth rate of 8%

• Elimination of dependency of Government current expenses to the oil and gas revenue

8

1.General Information - CONT


Si-O-Se Pol, Isfahan - Iran


Reasons to Invest in Iran:

• The 17th largest economy in the world by purchasing power parity (PPP).

• The diversified economy with over 40 industries directly involved in the Tehran Stock Exchange and a capital market with a value of more than US$ 138 billion

• Resource-rich economy

• Labor-rich economy

• Young and educated population

10

2.Why Iran?


• Large domestic market with 75 million population

• Developed infrastructure in transportation, telecommunications and energy

• Strategic location, surrounded by 15 land and sea neighbors, can serve as a lucrative trade and transit route in both north-south and east-west corridors providing a unique foreign market access

• Various Tax exemptions and incentives

2.Why Iran? - CONT

Highlights of Tax Holidays

Activity Level of Exemption Duration

of Exemption Agriculture 100% Perpetual

Industry and Mining (article105) 80% 4 Years

Industry and Mining in Less-Developed Areas

100% 10 Years

Tourism 50% Perpetual Exports 100% Perpetual

Handicraft 100% Perpetual

Education, sport and services 100% Perpetual

Cultural activities 100% Perpetual

Salary in Less-Developed Areas 50% Perpetual

Co-operative 100% Perpetual Free Trade Zones 100% 25 Years

2.Why Iran? - CONT


Privatization: • Before:

More than 70% of the national economy were state owned.

• Now:

Due to general policies of article 44 (2005) :

• Privatization of more than US$ 80 billion of SOEs during the past five years and companies with the value of about US$ 70 billion still available under the plan.

• Some articles was approved caused for a change in the role of government from direct ownership and management of enterprises to policy-making, guidance and overseeing.(2008)

• Ban on government investment or engagement in all economic activities and its obligation to transfer the already operational state owned plants and companies to private sector.

2.Why Iran? - CONT


Capital Market:

• Market index standing at 71000 in 2013(Oct) with more than 190% increase comparing to 2012

• The market size and value reaching to more than US$ 138 billion

2.Why Iran? - CONT



Damavand, Tehran- Iran


3.Foreign Investment Regulatory Framework (FIPPA)

Types of Investments

Direct Investment

(Equity Participation) in All Areas Open to Iranian

Private Sector Without Any Limitation on the

Percentages of Foreign Shareholding

Investment through Contractual Arrangements

(Non-Equity Forms):

- Buy Back Arrangements

- Civil Partnership

- BOT Schemes

Features of Foreign Investment Promotion and Protection Act (FIPPA) Areas of Investment:

3. FIPPA - CONT

All Areas in

Industry, Mining, Agriculture, Construction,

Transport, Communication and Services

And in

Greenfield Projects

Brownfield projects and existing companies


3. FIPPA - CONT

Risks to be Covered:

• Nationalization & Expropriation

• Currency Transfer

• Breach of financing agreement through the enactment of legislation or regulation by the Government



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

and …

3. FIPPA - CONT


Investment in Capital Market:

• The new bylaw for foreign investment in the stock exchange approved in 2010

• The new bylaw for foreign investment in the stock exchange, securities was approved by the Ministerial Council in 2010

• No limitations for transferring the capital, capital gains and dividends at any time and the possibility of strategic investments and membership in the board of directors of listed companies.

• The foreign investors could also request for receiving a foreign investment license (optional) for guaranteeing the supply of adequate forex in case of transferring the retained funds abroad.

3. FIPPA - CONT


Azadi Sq., Tehran- Iran


Main Objectives of FISC:

• Before project implementation phase:

• Facilitation the FDI procedures in Iran‌،

• Coordination with Executing Agencies Related to Foreign Investment

• Well extended throughout the country by National FISC in Tehran and provincial setups in the capital of all 31 provinces

• A focal point for FDI applicants،

• Facilitation of official procedures for required permissions and licenses

• Aftercare and corporate development services through continuous monitoring of ongoing/utilized investment projects and rendering business facilitation supports

4.Foreign Investment Service Center (FISC)

FISC Services

Declaration of establishment

permits for subscriptions relating to utilities

Coordination for Necessary permissions

Corporate Establishment Related Activity

Exploration Permissions

Dissemination of

information and provision of necessary guidance

registration of order for importation of

machinery and equipments

Necessary coordination for the securing of entry visa,

residence and employment permits

environment protection license

Coordinating for Customs Related issues

Responsibility Chart 4. FICS - CONT


Ministry of Foreign Affairs

Ministry of labor

I.R.I Customs Administration

FISC

Ministry of Agriculture

Ministry of Industry, Mine & Trade

Department of Environment

Office for the Registration Companies & Industrial Property

Central Bank of Iran

Any Organization as per the case

Tax Organization

Members 4. FICS - CONT


Investment Licensing Procedure : Investment Licensing Procedure : Simplified, Short and Transparent

Submission Of

Application

Final License Issued

Draft License

Communicated

Preparation And

Submission Of a Report

Foreign

Investment

Board

OIETAI

Max 5 Days Max 10 Days

4. FICS - CONT



Statue of Hercules ,Bisotoon, Kermanshah- Iran

International legal infrastructure, affiliations and relations

• Bilateral Investment Treaties (BIT) with 53 Countries

• Regional & Multilateral Treaties with Member states of Organization of Islamic Cooperation (OIC) & Economic Cooperation Organization (ECO)

• Double Taxation Treaty (DTT) with 44 countries

Treaty

• Multilateral Investment Guarantee Agency (MIGA)

• World Association of Investment Promotion Agencies (WAIPA)

Membership

• FIAS: Assessment of Investment Environment in Iran

• UNIDO: Capacity Building in Industrial Investment Promotion

• UNCTAD: Preparation and Launch of World Investment Report (WIR) and other Surveys

Cooperation

5.Promotions and Supports



Iran Investment Opportunities

5.Promotions and Supports - CONT

IRAN INVESTMENT GUIDE-WINTER 2011


Including:

• Introducing Iran macroeconomic performance

• investment climate

• Areas of Opportunities

• The Regulatory Framework

• Visas & Work Permit and procedures to obtain required permissions and licenses for doing business in Iran

www.iio.ir

www.investiniran.ir

Investment Road Shows (2010-2011)

Organizing and conducting 19 specialized seminars in 13 countries aiming at introducing Iran investment opportunities and ready to invest projects • China

• India

• Italy

• Turkey

• Portugal

• Germany

• Malaysia

• Qatar

• Singapore

• South Korea

• Spain

• Thailand

• Ukraine



NATIONAL DEVELOPMENT FUND of IRAN (NDFI)

• The government has set up a national development fund since September2011, allocating 20% of Oil & Gas revenues to help spur economic development and production.

• The National Development Fund will allocate its resources to investment projects at LIBOR +%3-%5 .

• Provision of facilities out of the National Development Fund to the private, cooperative and public nongovernmental sectors

• Aimed at production and development of investment domestically and internationally, considering the competitive conditions and proper economic output



IRAN FDI Inflow 2006-2012




Eram, Shiraz- Iran


6. Probable fields of cooperation


… You have to fill in this page case by case based on the studies which have done on

that specific target market….

6. Probable fields of cooperation


Tohid Tunnel & Milad Tower, Tehran- Iran

THANK YOU

Contact Information:

, Foreign Economic Relations Office

Tel : +98 21 33967777

Fax : +98 21 33967866

+98 21 33967764

Websites : www.investiniran.ir

www.iio.ir

E-mail : [email protected]

[email protected]

Address :

Davar Ave. Tehran P.O.Box: 11365/4618


Any questions?


Thank you

For

Your Kind Attention

FOREIGN INVESTMENT in IRAN - rtedc.org · FOREIGN INVESTMENT in IRAN ... • th4 largest producer...

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