Transcript Slide 1
Foreign Investment in Iran: Laws and Regulations, Advantages, and Investment Opportunities
Presentation by : Sharagim Shams Deputy Director General, Foreign Investment Office Organization for Investment, Economic and Technical Assistance of Iran (OIETAI) On the occasion of UBCCE Third Business Forum
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Presentation Highlight
1.General Information about Iran -Fundamental Macroeconomic Reforms - Privatization 2.Foreign investment in Iran : Policies, Laws and Regulations and advantages Tel: +98(21) 33967075 www.investiniran.ir
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General Information about Iran
Tel: +98(21) 33967075 www.investiniran.ir
Fax: +98(21) 33967864 www.iio.ir
Geography
Location
: Middle East, bordering Iraq,Turkey, Pakistan, Afghanistan and Turkmenistan t Oman Sea and the Persian Gulf from south and the Caspian Sea from north, S trategic location on the Persian Gulf and Strait of Hormuz, which are vital maritime pathways for crude oil transport
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Area: 1.67 million km² Population: 71.5 million Literacy ratio: %85 30 Provinces Tel: +98(21) 33967075 www.investiniran.ir
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Tel: +98(21) 33967075 www.investiniran.ir
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Mid Summer
Climatic Characteristics: Numerous Diversity
Climate Factor Temperature (c) Humidity (%) Rainfall (mm) North of Iran South of Iran Min: 5 70 165 Max: 50 10 0 Mid Winter Climate Factor Temperature (c) Humidity (%) North of Iran Min: -28 South of Iran Max: 31 90 20 Rainfall (mm) 1200 125
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Economy
GDP: US$ 382.3 billion, GDP per capita: US$ 5346 GDP (PPP): US$ 842 billion , GDP per capita (PPP): US$ 12,800 GDP average annual growth rate(2004-2008): % 7.5
Trade Balance US$ 45 billion surplus Import (FOB) US$ 55 billion Export US$ 100 billion
Export - commodities:
petroleum 80%, chemical and petrochemical products, fruits and nuts, carpets
Import-Commodities:
Industrial raw materials and intermediate goods, capital goods, foodstuffs and other consumer goods, technical services,
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Export & Import Trends
Value: US$ Billion
70 60 50 40 30 20 10 0
`` .
Exports .
Imports 70 55
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SAUDI ARABIA BELGIUM TURKEY AFGANISTAN JAPAN SOUTH KOREA INDIA CHINA UAE IRAQ TURKEY ITALY INDIA FRANCE UNITED KINGDOM SOUTH KOREA SWITZERLAND CHINA GERMANY UAE
Main Trading Partners (Top 10)
394 410 526 539 587 821 1495 1970 1813 1978 2033 3082 3523 4915 5325 1172 2003 2328 2384 Value: $US Million 13438 Non-Oil Export Partner Import Partners IMPORTS
Capital Intermediate Consumer
SHARE
% 16 % 67 % 13 Other % 4
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Source: I.R. Iran Customs
• • • • • • • • • •
Iran’s Main Advantages:
Diversified, Hydrocarbon-rich Economy 4th largest oil producer in the World 2nd highest gas reserves in the World Largest industrial base in the MENA region 10th Country on Tourism Attractions and 5th on Ecotourism High GDP growth rate 4th to 9th rank in production of Zinc, Lead, Cobalt, Aluminum, Manganese and Copper in the world.
4th rank on diversity of Agriculture products in the world.
6 Free Trade-Industrial Zones 19 Special Economic Zones Tel: +98(21) 33967075 www.investiniran.ir
Fax: +98(21) 33967864 www.iio.ir
Recent Developments:
Comprehensive Tax Reform :
Fixing corporate income tax at a flat rate of 25%, while under the previous law, companies were subjected to both a 10% corporate tax plus their dividends being taxed at ascending levels up to 54%.
Introduction of Many New Tax Holidays and exemptions
Creation of a Central Tax Authority.
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Floating Single Exchange Rate System : Unification: from March 2002.
• • • • •
Less than 5% Fluctuations.
Trade System : Replacement of Non-tariff Barriers by Tariffs.
Rationalization of the Tariffs (35.6% to 16.5%) Privatization : More than 20 billion USD Privatized.
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Fundamental Macroeconomic Reforms (privatization)
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Expediency Council Resolutions: Opening up new areas formerly closed to private local/foreign investors.
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The general policies of Article 44 of the Constitution of the Islamic Republic of Iran Tel: +98(21) 33967075 www.investiniran.ir
Fax: +98(21) 33967864 www.iio.ir
Foreign investment in Iran:
policies , laws and regulations and advantages Tel: +98(21) 33967075 www.investiniran.ir
Fax: +98(21) 33967864 www.iio.ir
Foreign Investment Policy
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Contribution to Economic Development
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Financing Projects, Upgrading Technological & Management Skills,
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Sharing Benefits and Risks on Equal Term without Discrimination
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Advantages in Enhancing Products and Output Quality, Increasing Employment & Exports Tel: +98(21) 33967075 www.investiniran.ir
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The Body in Charge
First Deputy Minister of Economic and Finance The Organization for Investment is the sole official authority for the promotion of foreign investments in the country and for the investigation of all issues pertaining to foreign investments. (FIPPA , Article 5) State Tax Organization Privatization Organization Stock Exchange Organization for Investment Treasury Banking System Customs
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The Legislation:
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The Foreign Investment Promotion and Protection Act (FIPPA):
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Substitutes Former LAPFI
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Ratified in 2002
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By Laws:
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Implementing Regulations of the FIPPA Tel: +98(21) 33967075 www.investiniran.ir
Fax: +98(21) 33967864 www.iio.ir
Features of FIPPA:
Types of Investments: Direct Investment (Equity Participation) in All Areas Open to Iranian Private Sector Investment through Contractual Arrangements (Non-Equity Forms): Buy Back Arrangements -Civil Partnership -BOT Schemes Tel: +98(21) 33967075 www.investiniran.ir
Fax: +98(21) 33967864 www.iio.ir
Features of FIPPA:
Areas of Investment:
All Areas in Industry, Mining, Agriculture, and Services: -In Greenfield Projects -In Brownfield projects and existing companies Tel: +98(21) 33967075 www.investiniran.ir
Fax: +98(21) 33967864 www.iio.ir
Features of FIPPA: Risks Covered under FIPPA:
All non-Commercial Risks, i.e. Currency Transfer, Nationalization, expropriation, Government Intervention and Breach of Contracts by Government Tel: +98(21) 33967075 www.investiniran.ir
Fax: +98(21) 33967864 www.iio.ir
Features of FIPPA:
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 Tel: +98(21) 33967075 www.investiniran.ir
Fax: +98(21) 33967864 www.iio.ir
Features of FIPPA:
Settlement of Disputes: Between Investors (Free), Between Investors and Government: Amicable Domestic Courts Ad-hoc Arbitrations ICSID (International Center for Settlement of Investment Disputes): Underway Tel: +98(21) 33967075 www.investiniran.ir
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Features of FIPPA: Organization:
Organization for Investment, Economic and Technical Assistance of Iran (OIETAI)
Foreign Investment Board Tel: +98(21) 33967075 www.investiniran.ir
Fax: +98(21) 33967864 www.iio.ir
Procedure For Foreign Investor ( Phases 1 to 4 )
1. Identification and Selection of Investment Project
2. Obtaining Preliminary Permit from Relevent Iranian Organization
3. Issuance of Foreign Investment License
4. Implementing of Project Tel: +98(21) 33967075 www.investiniran.ir
Fax: +98(21) 33967864 www.iio.ir
Features of FIPPA
Investment Licensing Procedure :
Simplified, Short and Transparent Submission Of Application OIETAI Preparation And Submission Of a Report Foreign Investment Board Draft License Communicated Max 15 Days Tel: +98(21) 33967075 www.investiniran.ir
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Max 30 Days Final License Issued
Why Invest in Iran? (Advantages):
1.Strategic Location 2. Market Potentials & Proximity 3. Labor Privileges 4. Developed Infrastructure Tel: +98(21) 33967075 www.investiniran.ir
Fax: +98(21) 33967864 www.iio.ir
Advantages (contd.):
5. Low Utility & Production Cost 6. Abundant Natural Resources 7. Climatic Characteristics 8. Fiscal Incentives Tel: +98(21) 33967075 www.investiniran.ir
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Foreign investment
Statistices
under the
Foreign Investment promotion & protection Act (FIPPA)
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Foreign Investment under the Foreign Investment Promotion & Protection Act ( FIPPA)
US$ million
14000 12000 10279 10000 8000 6000 4000 2703 1358 2000 68 613 0 2001 2002 2003 Fax: +98(21) 33967864 www.iio.ir
2004 4275 2005 2006 12746 2007 2087 2008
Sectoral Distribution of Foreign Investment (1993 up to March year 2009)
US$ million
Services; 3693 Trsnsportation & Communications ; 1826 Construction; 906 Water, Electricity & Gas Supply; 4771 Tel: +98(21) 33967075 www.investiniran.ir
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Other; 6 Agriculture; 21 Mining; 2450 Industry; 20505
Geographical Distribution ْ of Foreign Investments (1993 to March 2009)
US$ million
Transnational, 1,699 International, 26 Oceanic, 682 Euroup, 11,056 Asia, 11,689 America, 1,040 Tel: +98(21) 33967075 www.investiniran.ir
Fax: +98(21) 33967864 www.iio.ir
Africa, 7,989
Features of FIPPA:
Treaties
- Bilateral Investment Treaties (BIT) with 53 Countries, - Regional & Multilateral Treaties with Member States of
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Organization of Islamic Conference (OIC),
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Economic Cooperation Organization (ECO).
- Double Taxation Treaty (DTT) with 44 Countries Tel: +98(21) 33967075 www.investiniran.ir
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Contents of BIT:
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Promotion of investments: (most-favored –nation treatment) Treatment of investment Expropriation , losses and compensation Repatriations and transfers
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Subrogation
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Contents of BIT:
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Dispute settlement procedure
• • •
• Validity of the agreement:
Admission and establishment, Scope and definition of investment ;
… Tel: +98(21) 33967075 www.investiniran.ir
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International Memberships:
• Multilateral Investment Guarantee Agency (MIGA) since 2003 • World Association of Investment Promotion Agencies (WAIPA) since 1998
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International Co-operations:
• World Bank: Project for Enhancing Institutional Capacity of Foreign Investment Promotion in Iran • FIAS: Assessment of Investment Environment in Iran • UNIDO: Project for Capacity Building in Industrial Investment Promotion • UNCTAD: Preparation and Launch of WIRs and certain other survey studies
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Contact Information
Organization for Investment, Economic and Technical Assistance of Iran( OIETAI) Address: Davar Ave. Tehran P.O.Box: 11365/4618
President of OIETAI Tel: +98 21 33967043-33967770 Fax:+98 21 33967759
Foreign Investment Office
Tel: +98 21 33967755 – 33967075 Fax: +98 21 33967864 Websites: www.investiniran.ir
; www.iio.ir
E-mails:
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