Foreign Investment in Iran - JICA · PDF fileapplications to different sectors among them...

www.investiniran.ir www.iio.ir

11111In the name of GOD

Foreign Investment in Iran Promotion & Protection, Incentives and Procedure

Organization for Investment,

Economic and Technical Assistance of Iran (OIETAI)

Sara Akbari Mehrabani

Division Chief

Investments Projects Appraisal

1

Presentation Highlight

General Information about Iran

Incentives and Benefits of Foreign Investment in Iran

Introduction to “ Foreign Investment Promotion and Protection Act” (FIPPA)

Supports & Services Provided by OIETAI

Procedure For Foreign Investor

Investment Opportunities and Projects in Iran

www.investiniran.ir www.iio.ir 2

General Information about

Iran


Chapter 1

3


Geography

Location:

Country in south-western Asia, located on the northern shore of the Persian

Gulf with an area of 1,648,195 square kilometers.

Iran lies at the eastern most edge of the geographic and cultural region known as

Middle East,

Bordering Iraq, Turkey, Pakistan, Afghanistan and Turkmenistan, 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

4


http://www.investiniran.ir/

Sectors of the Economy

Manufacturing • Handicrafts • Automobile Manufacturing • Defense Industry • Construction and real

estate • Energy, Gas, Petroleum,

and Petrochemicals • Mines and Minerals

Service • Retail and Distribution • Healthcare • Tourism and Traveling • Banking, Finance and

Insurance • Communications and IT • Transportation

Agriculture • Agriculture and Food

stuff www.investiniran.ir www.iio.ir 7

Iran’s Main Advantages:

The diversified economy with over 40 industries directly listed in the Tehran Stock Exchange

Resource-rich & Labor-rich economy

Young and educated population & Large domestic market

Developed infrastructure in transportation, telecommunications & energy

Tax exemptions and incentives

Widespread and sound infrastructure.

Diversity in economic sectors and rich in oil and hydrocarbon resources, www.investiniran.ir www.iio.ir 8

Continued

4th largest oil producer in the World

2nd highest gas reserves in the World

10th rank in tourism

industry and potential of

standing as the 5th in

ecotourism

Having the largest and mot diversified industries in the Middle east and North Africa Region,

4th rank in production of Zinc and 10th

rank in production of Cobalt in the

world.


Incentives and Benefits of Foreign

Investment in Iran


Chapter 2

10

Law & Regulation Incentives

Financial Incentives

Tax & Custom Incentives

Regional Incentives


Law & Regulation Incentives (Features and Advantages of FIPPA)


Granting protection coverage to all foreign investment schemes.

Quick approval of the foreign investment application

Issuing a three-year residence license for foreign investors, directors, experts as well as their immediate family members

Expropriation and nationalization

Unlimited transfer of capital and dividend

Guarantee of the purchase of the goods and services resulting from investment projects in BOT investment schemes where the government acts as the sole purchaser.

Law & Regulation Incentives (Features and Advantages of FIPPA)


• Tax & Custom Incentives


Highlights of Tax Holidays

• Fixed corporate income tax at a flat rate of 25%

Activity Level of

Exemption

Duration of

Exemption

Industry & Mining 80% 4 Years

Industry & Mining in less Developed

Areas 100% 20 Years

Agriculture 100% Perpetual

Tourism 50% Perpetual

Export of Services &non-oil goods 100% During 6th

development Plan

Salary in Less Developed Area 50% Perpetual

Profit used to Development of Existing

Unites or Setting up New Unites 50 % Perpetual


New Tax Incentives enforceable from March 2016

• Total Taxable income <= registered Capital 50% of income is free of tax

• In less developed areas,

• Total Taxable income <= double of registered Capital 100% of income is free of tax

o In case of each 5% foreign investment, 10% will be added to above incentive, maximum up to 50%

Income Tax with Rate of 0.0% Duration of Exemption

Industry, Mining & Services (Hospital & Hotels) 5 Years

Industry, Mining & Services (Hospital & Hotels) in Industrial Parks and Economic Especial Zones

7 Years

Industry, Mining & Services (Hospital & Hotels) in Less Developed Areas 10 Years

Industry, Mining & Services (Hospital & Hotels) in Less Developed Areas located at Industrial Parks and Economic Especial Zones

13 Years



• Total Taxable income <= registered Capital 50% of income is free of tax

• In less developed areas, • Total Taxable income <= double of registered

Capital 100% of income is free of tax

• In case of each 5% foreign investment, 10% will be added to these 2 incentives, maximum up to 50%



• in case of increasing the employment volume up to 50% in comparison to last year, one-year exemption can be added to the duration of exemptions (mentioned in previous slide)

In companies with more than 50 employees,

• can enjoy 50% on Tax Rate for the income from sales of products(12.5 % instead of 25%) after the end of above duration

In the case that foreign companies with reliable Brand produce goods

using production capacity of Iranian companies and export at least 20%

of total production,.


Customs Exemptions


Regional Incentives


Investment Incentives in Free Zones

20 Years Tax Exemption for All

Economic Activities

No needed Visa for Entrance of

Foreigners

Custom Exemption for Raw materials and Industrial machineries of

Producing units

Possibility of Exporting

Products to The Mainland

Easy Circumstances for

Re-export and Transit of

Commodities


7 free Zones in Iran 2 in North-West (Aras,

Makou)

1 in North (Anzali)

3 in South (Kish, Geshm, Chabahar)

1 in South-East

(Arvand)


Introduction to

Foreign Investment Promotion and Protection Act

(FIPPA)

Features and Advantages


Chapter 3

23


Foreign Investment Policy

24


Types of Investments

25


Investments Volume

Profit Transfer,

Capital Repatriation,

Types of Capital Imported,

Import / Export.

Scopes of Investment under FIPPA

No limitation on:

26

Areas of Investment


Risks Covered under FIPPA

Currency Transfer,

Nationalization & Expropriation,

Government Intervention and Breach

of Contracts by Government


Features of FIPPA Foreign Investor:(definition ) - Non-Iranian natural or juridical person - Iranians using capital with foreign origin Foreign Capital

- Cash - Non-cash: - Machinery & equipments - Tools & spares, CKD parts & raw, addable &

auxiliary materials - Patent rights, technical know-how, trade marks and

names, and specialized services


Possibility of

Investment by foreign

Natural and Juridical

Persons and Iranians

Living Aboard

Equal Treatment with

Foreign Investors as

accorded to Domestic

Investors

Quick Approval of

Foreign Investment

Application Issuing Three-Year

Residence Permit for

Foreign Investors,

Directors, Experts and

Their Immediate Family

Members,


Some

other

Features

of

FIPPA

30

Supports & Services

Provided by

OIETAI


Chapter 4

31

Foreign Investment Services Center (FISC)

FISC has been established in 2002, In order to facilitate and expedite issues related to the

admission and activity of Foreign Investments in the Country, (based on Article 7 of FIPPA)

Provides all before Care and after Care Services Provision of Information and Necessary Advice to Foreign

Investors Through:

* Meetings,

* E-mail,

* Telephone

The representatives from all related Government departments

are obliged to coordinate for all issues related to their respective agency for foreign investment facilitation.



Main Objectives of FISC

Facilitation the FDI procedures in Iran‌،

Coordination with Executing Agencies Related to Foreign Investment

A focal point for FDI applicants،

Facilitation of official procedures for required permissions and licenses

33

FISC’s Members



Key Services Offered by FISC Necessary guidance to foreign

General supervision on foreign investment projects.

Necessary coordination concerning the issues including:

the declaration of establishment

the environment protection license

the permits for subscriptions utilities

the license for exploration and exploitation of mines,

etc.

registration of joint venture company

registration of order for importation of machinery and

equipments and other customs affairs

Tax affairs

35

Related Regulation of Single

Window


UN/CEFACT has indicated 3 model for

implementation of Single Window


single Authority


Single Automated System


Automated Information Transaction System


Single Window in Iran


Latest Situation of Single Window in Iran


Single Window in Iran

• investors using the single window could submit their applications to different sectors among them tourism, industry and the like.

• Iran is finalizing the single window for investment, adding that the window is planned to be launched in the intranet in the first phase due to security concerns.

• The pilot plan has been launched in East Azarbaijan province and all provinces across the country will be connected to this window later down the road.


East Azarbaijan Investment Single Window

East Azarbaijan Investment Single Window was implemented and developed in 2012.

Single Window network is designed to conducting inquiries related to investment was designed and defined 278

processes for 129 related agencies: ( 35 related agencies, 12 banks, 62 Municipally, 20 proconsul).

Everyone can access easily to Single Widow portal with referring to www.investin-ea.ir site.

All of license’s applicants can refer to this said website and get necessary document, reviewing terms and conditions,

regulations, by-laws and other related information they need to apply form online.


Procedure For Foreign Investor

( Phases 1 to 4 )


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


Chapter 5

Marketing &Investment

Opportunities

and Projects

in Iran


2 Main activities In Section of promotion in foreign Investment office


Method Of Identifying Investment

Opportunities


Method Of Identifying Foreign Investors


Difference of International marketing

between OIETAI & Commercial institute


Iran Investment Opportunities


Foreign Investment Opportunities In Iran

Design & Prepare “Summary-Sheet” to Gather Investment

Opportunities from all over Iran

Identification of Opportunities &

Making a Data Base

Presentation Of Projects By:

www. www.investiniran.ir

* Participation in International Seminars

* Face to Face Meetings with Project Owner &

Potential Investors





IRAN INVESTMENT GUIDE

And Other Publications

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

55

Chapter 6

Treaties, International

Cooperation and Membership


Treaties

- Bilateral Investment Treaties (BIT) with Foreign

Countries,

- Regional & Multilateral Treaties with Member

States of

• Organization of Islamic Conference (OIC),

• Economic Cooperation Organization (ECO).

- Double Taxation Treaty (DTT) with Foreign

Countries www.investiniran.ir www.iio.ir 57

Contents of BIT

Promotion of Investments

Treatment of investment

Expropriation , losses and

compensation

Repatriations and transfers

Subrogation Dispute

settlement procedure

Validity of the agreement:

Admission and

establishment,

Scope and definition of investment ;


International Memberships

Multilateral Investment Guarantee Agency (MIGA) since 2003

Multilateral Investment Guarantee World

Association of Investment Promotion

Agencies (WAIPA) since 1998


International Co-operations:



• necessity of usage of capacities for local production,

• production and export under the international brands,

• tax incentives under the article 31,

• transparency in financial market.

Use the capacities of the Law on Elimination of barriers to competitiveness and improvement of financial market of country.

• uniform drafting reports by applicant organization for finance,

• mobilizing finance for priorities projects,

• invariant process for documents of application for finance.

Facilitate the Mechanism for mobilization of finance resources.

• necessity of drafting investment strategy in post-sanction era,

• collecting the priority, plan, program and opportunities of local organizations,

• categorize and prioritize the most important projects,

• technology absorption and knowledge transfer,

• make the mode of production, industrial product and related services knowledge base.

Providing industrial and sectoral priorities to draw up industrial strategy, by using objectives and comments of relevant ministries and organizations.


• signification of the overall policy on resilient economy,

• severance of the provisions relating to foreign investment,

• drafting of strategic plan base on the related policies,

• implementation of strategic plan.

Implementation of resilient economy and its policies.

Giving the priority to foreign investment aimed at developing economic diplomacy, entering the global markets and access to technology to achieve the goals and visions of resilient


Organization for Investment, Economic and

Technical Assistance of Iran( OIETAI)

www.investiniran.ir

[email protected]

[email protected]

Foreign Investment Office

Tel: +98 21 33967755 – 33967075 Fax: +98 21 33967864

Foreign Investment Services Center

Tel: +98 21 33967749 – 33967766 Fax: +98 21 33967774

64

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Foreign Investment in Iran - JICA · PDF fileapplications to different sectors among them...

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