Foreign investment policies 1

The legal framework for foreign investment in Iran consists of three distinct aspects:

• investment by natural persons of foreign nationality; 2) foreign investment in the framework of the “Commercial Code”; and 3) foreign investment in the framework of the “Foreign Investment Promotion and Protection Act” of 2002 (FIPPA).

• Investment by natural persons of foreign nationality. According to the Civil Code, foreign nationals will, subject to the existence of a treaty on reciprocity, enjoy the same rights and privileges of Iranians. The companies formed by such foreign nationals will be of Iranian nationality and subject to the same laws which regulate the activities of Iranian companies.

• Foreign investment in the framework of the Commercial Code. Foreign nationals can, in the framework of the Commercial Code and subject to the observance of the relevant procedures, form and register companies in Iran. Iran’s Commercial Code does not differentiate between Iranian and foreign stock holders of Iranian companies. In other words, there is no restriction regarding the nationality of those who want to establish companies in Iran. In this context, foreign exchange restrictions are equally applied to Iranian and foreign investors. Such companies, however, do not enjoy the privileges set out in FIPPA

• Foreign investment in the framework of FIPPA. The 2002 “Foreign Investment Promotion and Protection Act” lays down the rights, duties and obligations of foreign investors and their fields of activity. All natural and legal persons of foreign nationality, international companies, institutes and organizations, as well as natural and legal persons of Iranian nationality whether resident in Iran or not with capitals of foreign source who obtain the permit to invest in Iran in the framework of APPFI and its “By-Law” will be entitled to enjoy the privileges and protections set out in that Act.