Business Ownership & Intellectual Property Rights in Iran

Can Iranian company be 100% foreign-owned and controlled? Must an Iranian Company have local directors, or can they all be foreigners?

A company registered in Iran, regardless its shareholders are all Iranian or foreigners, considers as a local company and there is no legal restrictions in nomination of foreign shareholders as its managers. So they can own all the shares of a company and full control of it.

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By whom should the resolution of a company be formed, shareholders or its board directly?

The law specifically provides the board with all necessary authorities for the management of the company within the limits of the company's objectives as stated in Articles of Association. However, the board may exercise any power which have been solely reserves the rights to the shareholders who partake in the general meeting and limitations on the board's authority which will be distributed among the directors, but not in respect of third parties, whose rights can be written in the Articles of Association.

The ordinary meeting is competent to deal with all of the affairs of the company except those which are clearly within the competence of the statutory and extraordinary meetings it is stated required to take action on the following matters:

  • Review and approval of the balance sheet and profit and loss account and other financial reports.
  • Review and approval of the directors' annual report.
  • Review and approval of the inspectors' annual report.
  • Election of directors (if their term has expired).
  • Election of inspector(s) and alternate inspector(s).
  • Designation of general circulation newspaper in which the company's legal notices will appear.

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Are barrier shares allowed in Iranian companies?

A Joint Stock company may issue both ordinary and preferred shares in either bearer or registered form. While the law does not specifically state what privileges may be accorded to preferred shares, the Article of Association of each company's priorities is allowed to define those preferences such as dividends and distribution of assets in liquidation, and multiple voting powers and so forth.

Articles 20 and 24 of the Commercial Act.

The barrier shares are legally accepted in a Limited Liability Company too. In these companies, all the shareholders have the right of vote proportionate to the amount of their shares unless defined in the Article of Association

Article 107 of the Commercial Act

As it is seen, the Act gives an implicit ratifies to barrier shares and the article of association can illustrate their limits.

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How, if at all, is the identity of the holder of the bearer shares protected?

In the Act of Commerce has not been specified that bearer shares should be with name. Note 2 of Article 24 of the Act clears that all shares can be release with name or anonymous. So by virtue of that, there is no legal restriction on issuing bearer shares anonymously.

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Is a foreign company allowed to take the ownership of property in Iran?

Agencies or representatives of a foreign company or foreigners as legal persons or real persons are allowed to buy a property in Iran on the grounds that there is some reciprocal permission between Iran and the origin country of the buyers but a company registered in Iran, even if all are foreign shareholders, can buy and own as much property as it wishes in Iran without any restrictions.

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Is Copy Right protected in Iran?

The Copy Right Law has not signed up by Iran so far. Although on March 12, 1999, Iran ratified the Stockholm Act of July 14, 1967, as amended on September 28, 1979, of the Paris Convention for the Protection of Industrial Property of March 20, 1883, all software, intellectual properties, techniques and technologies, inventions, brands and commercial trade marks imported as a part of capital in a foreign investment used in a productive and industrial activity in Iran can be registered in the Department in Charge of Registration of Companies and Industrial Property Rights of Iran to be protected by Law.

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Are imported new technical methods know how or softwares used in a foreign investment protected by law

As discussed before, all technical methods, machineries or software imported to the country as a part of foreign capital can be registered in the Department in Charge of Registration of Companies and Industrial Property Right and will be protected against any eventual copying or unauthorized imitation?

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