Iranian Free Zone Investment

What are the tangible benefits of setting up a business in the FTZ?

As discussed before in detail, Free Trade Zones have a large variety of advantages and facilities which the Mainland does not. The bureaucratic procedure of register a foreign investment is lengthier than on FTZ and it's needed to follow the timetables to repatriate the capital or benefits (although these are not real restrictions and all the regulations are well clear). Some of the benefits and incentives of FTZ are listed below:

  • Investment independently or in partnership with Iranians with no limit on investment and shareholding.
  • Foreign investments up to any ratio (of capital investment).
  • 15 years of full tax exemption.
  • Investment guarantee from any viewpoint.
  • Offshore banking and non banking credit practices.
  • 100% free repatriation of capital and profit at any time.
  • Vast pool of manpower at all levels of skills and various trades and Proper employment regulations.
  • No currency restrictions.
  • No bureaucratic regulations and avoidance from red tape.
  • The legal rights of foreign investors are guaranteed.

In the event of nationalization, the Authority of each Zone shall make the compensation; Foreign investors may lease land with reasonable rents, and own the buildings and other installations built on the land.

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Is there any additional advantage for investment in Free Trade Zones compared with the Mainland?

In effective, at the moment Free Trade Zones do not have any significant advantage to the Mainland. They are built up during the time that there were no facilities for foreign investors in the Mainland and they could provide better circumstances and more conducive atmosphere for an economic activity with Iran but since March 2002 that the Foreign Investment Protection and Promotion Act is being ratified and enforced, the Mainland provide a better condition considering that the protection given by the Government there, is a sovereign guarantee, much more solid, valid and trustable that the common one in an FTZ and the condition of repatriation of the capital and dividends are the same. So, considering the variety of the opportunities and projects exist for an investor in the Mainland is not comparable with an FTZ by no mean. The only consideration is that the procedure of registering an investment in the Mainland is lengthier and more time consumer than in a FTZ, however an able and influent local agent can compensate such a hard task.

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