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FAQs

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Are the sanctions considered as event of force major?

The concept and forms of force major clauses are different in the laws of various countries and there is no single procedure for acceptance of economic sanctions as an example of force major. However, in the event of prediction of sanction as an example of force major in a contract, claiming the occurrence of force major is accepted as contractual force major.

Are electronic correspondence accepted as evidence in international commercial claims?

Basically, electronic correspondence has been accepted in the international trade, due to the advancement of new technologies and the prevalence of the use of this method of correspondence in international trade relations, and many arbitration tribunals accept these correspondences as evidence.

Is Iran a member of the Multilateral Investment Guarantee Agency (MIGA)?

Yes, the Government of the Islamic Republic of Iran has become a member of the Multilateral Investment Guarantee Agency (MIGA), and it is possible for foreign investors to obtain guaranteed coverage of the agency in accordance with the relevant criteria.

Does the tax rate apply to all types of companies, including Iranian companies and foreign companies, in the same way?

The income tax rate for all types of companies, including Iranian and foreign companies (branches and dealers), is 25%, which applies equally to all companies.

Does every investment case under the foreign investment law, require special license?

Yes, every investment case under this law requires a special (independent) license.

Is it possible to acquire land in Iran by foreign investors, in principle?

In cases which foreign investment leads to the formation of an Iranian company, the land acquisition by that company is permitted in accordance with the investment plan determined by the organization.

Are foreign investments automatically protected by law?

No, obtaining the support provided by the law in relation to foreign investment in Iran requires obtaining an investment license.

Is the investment license valid for a certain period of time?

Yes, if the foreign investor fails to enter the required part of the capital to the country after the issuance of the license within a specified period of time which is determined by the foreign investor commission on the basis of the investment plan, his license will be considered to be void.

How can Iranian investments be subject to FIPPA?

Iranian investment can be subject to FIPPA, if their capital is of a foreign origin and the investor provide documentation confirming his economic and commercial activities abroad.

Is the foreign investment permitted in companies admitted to the stock exchange?

Yes, according to the rules governing the foreign indirect investment, foreign investment is permitted in companies admitted to the stock exchanges.

What are the limits on the amount foreign investment in Iran?

There are no limitation on the amount or percentage of foreign direct investment in the Islamic Republic of Iran.

In which legal and contractual format of the foreign investment is acceptable?

According to Foreign Investment Promotion and Protection Act (FIPPA), the foreign investors must invest in one of the three forms of “civil partnership”, “Buy-Back” and “Build, Operation and Transfer”.

Does the a request for annulment of the arbitral award suspend its execution?

No, according to different legal systems, usually the mere request for the annulment of the arbitration award will not suspend the execution; however, the court of the country in which execution is sought will have the authority to order the suspension of execution, if it deems it is reasonable to suspend execution until the outcome of the annulment proceedings. In this regard, you must refer to the specific laws of the country in which execution was sought.

Is the arbitration decision amendable?

Rules of most arbitration institutes, anticipate that if the award contains typographical mistakes or miscalculations, the arbitration award would be amendable upon request of the applicant party, which should be made within a specified period and the arbitrator would issue the corrective award. The arbitrator himself may amend the within a certain period of time.

Is the arbitration award subject to appeal or revision?

Basically, arbitration consideration is a one-tier procedure. Therefore, there is no contest or revoke stage in arbitration (except in exceptional cases). However, in the limited and certain cases specified in the law, the arbitration decision is revocable to the request of the opposing party.

Does the registration of the application for arbitration require any payment?

Yes, organizations and arbitration institutions usually receive fees according to their pre-existing tables for registration of application of arbitration before starting to pursue arbitral affairs.

What are the issues that are referable to arbitration according to Iranian law?

In accordance with Iranian law, all the disputes whether domestic or international are referable to arbitration. However, in some cases (e.g. familial, criminal, or bankruptcy cases, etc.), certain limitations or prohibitions have been imposed by the law.

Who can refer their differences to arbitration? And is it necessary to have a commercial ID?

In general, the parties of all domestic or international commercial or non-commercial disputes (both individuals and legal persons) may refer to arbitration dependent on prediction of an arbitration clause in the contract or to agree to resolve their dispute through arbitration after the dispute and it’s not required to have a commercial ID.

To register a foreign company in Iran, should an agent be an Iranian or the partner should be an Iranian?

In order to register a branch or representation in Iran, one person must be nominated as a representative of a foreign company that can be Iranian or non-Iranian.

Could the manager of the branch of a foreign company in Iran at the same time working as the managing director of an Iranian company (joint stock Company)?

Yes, such a situation is not illegal.

Is the legal personality of the agent/branch of the foreign company independent or dependent on the legal personality of the main company?

Both branches and representative offices are dependent to the foreign company.

Does the representative of the branch of a foreign company which is registered in Iran, need the work and residence permits?

Any foreign person who is engaged in economic activities in Iran must receive work permits.

What are the possible grounds for the activity of the branch and representation of foreign companies in Iran?

Items such as Provision of after-sale services of foreign countries, provision of technical and engineering services and transfer of technological knowledge between the parties, are some of the grounds for investment of foreign companies in Iran.

Which branches and representative offices of foreign companies can register their branches in Iran?

 Registration of a branch or representative office of a foreign company in Iran is depending on the reciprocal action of the foreign country, which means that if Iranian companies can register their branches or representative offices in that country, the companies of that country can also register their branches and representatives offices in Iran.

What is the deadline for announcing the changes of a company, which its main center locates out of Iran?

The deadline for announcing these changes is 3 months for the companies which their main center is in Europe, Asia (excluding the Far East) and North America, and 4 months for the rest of the world.

In what sections are foreign investors allowed to invest?

Currently, foreign investors are permitted to invest in all areas which Iranian private investors are allowed to carry out investment in Iran.

Under the EU and USA sanctions regulations, Is it possible to delist the sanctioned persons?

With due attention to current European and American laws, the possibility of legal or administrative objection and request for delisting of such persons exists. In the EU, the European Court of Justice (ECJ) and in the United States of America, the Office of Foreign Assets Control of the Department of Treasury (OFAC), are competent to deal with requests of delisting under certain requirements.

Is it possible for Iranian-Americans to transfer income and/or fees from Iran to the US?

According to regulations issued by the Office of Foreign Assets Control of the Department of Treasury of the United States of America (OFAC), it is possible to transfer income and/or fees gained from inheritance or sale of real property from Iran to the US under certain requirements and procedures.

What procedures govern the settlement of disputes between the government and the foreign investor?

With due attention to the bilateral contract between the foreign investor and the government or Iranian partner, usually the parties may resort to the domestic courts of law in Iran at the first instance and may refer also to ad hoc arbitration, chosen as competent forum in the mutual contract for dispute settlement, afterwards; such as Tehran Regional Arbitration Center (TRAC).

Who is the competent authority to deal with the requests related to foreign investment in Iran?

The Organization for Investment, Economic and Technical Assistance of Iran (OIETAI) is currently the authorised governmental institution which deals with foreign investment affairs in Iran.

Are the legal framework governing the Free Trade Zones different than the laws governing the economic affairs of the rest of the Iranian territory?

The governing laws of the Free Trade Zones are slightly different than the legal framework governing the rest of the Iranian territory in regards to trade and economic activity.

What are the legal ways of presence in Iran for foreign nationals, consisting of natural persons or companies?

Foreign nationals, whether natural persons or companies, may engage in trade and economic affairs inside and outside the "Foreign Investment Support and Encouragement Act" framework, of which both statuses have their own unique privileges.

What is the or recognition prerequisite for engagement of foreign persons in economic activities in Iran?

Foreign persons must obtain the "Pervasive Code of Foreign Nationals" upon entrance, in order to engage in economic activities.

Is the outflow of capital and its returns allowed in the situation of termination of investment?

Under specific requirements upheld by the law, outflow of capital and its returns is possible.

Is it possible to register branches of foreign companies in Iran?

In the view of the recent provisions, registration of such branches is allowed.

What is the most common form of foreign-owned companies in Iran?

Foreign nationals, mostly register companies with "Limited Liability" and "Joint Stock" character in Iran.

Is it possible to establish a company with total foreign stock holders in Iran?

According to the recent regulations and provisions in regards to formation of companies by foreign nationals in Iran, establishment of such companies is permitted.