Chapter One: Definitions
\nArticle (1)
\nThe terms and expressions used in this Law shall have the following
\nmeanings:
\nLaw: The Law for the Promotion and Protection of Foreign Investments.
\nForeign Investor: Non-Iranian natural and\/or juridical persons or
\nIranians using capital of foreign source, who have obtained the
\ninvestment license referred to in Article (6).
\nForeign Capital: All types of capital, being cash or non-cash, brought
\ninto the country by foreign investors and include the following:
\na) Cash funds in the form of convertible currency imported into the
\ncountry through banking system or other methods of transfer,
\nacceptable to the Central Bank of the Islamic Republic of Iran;
\nb) Machinery and equipments;
\nc) Tools and spares, CKD parts and raw, addable, and auxiliary
\nmaterials;
\nd) Patent rights, know-how, trade marks and names, and specialized
\nservices;
\ne) Transferable dividends of foreign investors;
\nf) Other permissible species approved by the Council of Ministers.
\nForeign Investment: Application of foreign capital in a new or existing
\neconomic entity after obtaining the investment license.
\nInvestment License: The license issued for every foreign investment in
\naccordance with Article 6 of this Law.
\nOrganization: The Organization for Investment, Economic and
\nTechnical Assistance of Iran, subject matter of Article (5) of the Law
\nestablishing the Ministry of Economic Affairs and Finance ratified on
\nJuly 15, 1974.
\nHigh Council: The High Council for Investment, subject matter of
\nArticle (7) of the Charter of the Organization for Investment, Economic
\nand Technical Assistance of Iran ratified on June 2, 1975.
\nBoard: The Foreign Investment Board, subject matter of Article (6) of
\nthis Law.
\nChapter Two:
\nGeneral Criteria for Admission of Foreign Investments
\nArticle (2)
\nAdmission of foreign investment shall be made, in accordance with the
\nprovisions of this Law and with due observance of other prevailing laws
\nand regulations of the country, subject to the following criteria:
\na. Help create economic growth, upgrade technology, enhance
\n,development of the quality of products, increase employment
\nopportunities, exports, and penetrate into international markets;
\nb. Does not threaten the national security and public benefits, and
\ndeteriorate the environment; does not distort the country’s
\neconomy and impose unfair implication on products based on
\nlocal investments;
\nc. Does not involve granting of concessions by the Government to
\nforeign investors. The word concession as used herein means
\nspecial rights which place the foreign investors in a monopolistic
\nposition.
\nd. The ratio of the value of the goods and services produced by the
\nforeign investments, subject matter of this Law, to the value ,t of
\nthe goods and services supplied to the local market at the time of
\nissuance of the investment license, shall not exceed 25% in each
\neconomic sector and 35% in each field (sub- sector). The fields
\nand investment ceilings in each field shall be determined in the
\nby-law to be approved by the Council of Ministers.
\nForeign investment for the production of goods and services specifically
\nfor export purposes other than oil, shall be exempted from the
\naforementioned ratios.
\nNote. The Law for the Ownership of Immovable Properties by Foreign
\nNationals ratified on June 6, 1921 shall remain enforceable. Ownership
\nof land of any type and at any scale in the name of foreign investors is
\nnot permissible within the framework of this Law.
\nArticle (3)
\nForeign investments admitted in accordance with provisions of this Law
\nshall enjoy the incentives and protections available under this Law.
\nSuch investments may be admitted under the following two categories:
\na) Foreign direct investment in areas where the activity of private sector
\nis permissible;
\nb) Foreign investments in all sectors within the framework of “civil
\nparticipation”, “buy-back” and “build-operate-transfer” arrangements
\nwhere the return of capital and profits accrued is solely emanated from
\nthe economic performance of the r project in which the investment is
\nmade, and such return of capital and profit shall not be dependent upon
\na guarantee by the Government, state-owned companies or banks.
\nNote1. So long as the foreign investment subject matter of “build-
\noperate-transfer” arrangements referred to in Para (b) of this Article,
\nand its incurred profits thereon are not amortized, the exercise of
\nownership right by the foreign investor over the unamortized capital in
\nrespect of the recipient economic entity is permissible.
\nNote 2. With respect to investments subject matter of Para (b) of this
\nArticle, if, as a result of promulgation of laws or Government resolutions,
\nthe execution of approved financial agreements within the framework of
\nthis Law is prohibited or : interrupted, the accrued losses, to a maximum
\nof due installments shall be committed and paid by the Government.
\nThe scope of acceptable commitments shall be approved, within the
\nframework of this Law, by the Council of Ministers.
\nArticle (4)
\nThe investment by a foreign government or foreign governments in the
\nIslamic Republic of Iran shall have to be approved by the Islamic
\nConsultative Assembly on a case by case basis. The investment by
\nforeign state-owned companies is considered to be private.
\nChapter Three: Competent Authorities
\nArticle (5)
\nThe Organization is the only official authority for the promotion of
\nforeign investments in the country, and for Investigation of all Issues
\npertaining to foreign Investments. Applications of foreign investors in
\nrespect of issues such as admission, importation, employment and
\nrepatriation of capital shall have to be submitted to the Organization.
\nArticle (6)
\nFor the purpose of investigation and making decision on applications
\nsubject matter of Article (5), a Board under the name of the “Foreign
\nInvestment Board” shall be established under the chairmanship of the
\nVice Minister of Economic Affairs and Finance who is ex-officio the
\nPresident of the Organization Vice Minister of Foreign Affairs, Deputy
\nHead of the State Management and Planning Organization, Deputy
\nGovernor of the Central Bank of the Islamic Republic of Iran and vice
\nministers of relevant ministries, as the case requires.
\nIn relation to applications for admission, the investment license shall,
\nafter the approval of the Board, be issued upon confirmation and
\nsignature by the Minister of Economic Affairs and Finance.
\nAt the time of admission of foreign investments, the Board is required to
\nobserve the criteria referred to in Article (2) of this Law.
\nNote. The Organization, after preliminary appraisal, is required to take
\nthe investment applications, along with its own considerations, to the
\nBoard within a maximum period of 15 days as from the date of receipt of
\nthe applications. The Board is under obligation to review the
\napplications within a maximum period of one month from the date of
\nsubmission, and announce its final decision in writing.
\nArticle (7)
\nIn order to facilitate and accelerate issues related to the admission and
\nactivity of foreign ,investments in the country, all relevant bodies
\nIncluding the Ministry of Economic Affairs and Finance, Ministry of
\nForeign Affairs, Ministry of Commerce, Ministry of labor and Social
\nAffairs, Central Bank of the Islamic Republic of Iran, Costumes
\nAdministration of the Islamic Republic of Iran, Directorate General for
\nRegistration of Companies and Industrial property, and the Organization
\nfor Environment Protection are required to introduce to the Organization
\na fully authorized representative whose designation is signed by the
\nhighest authority of the body. The representatives so introduced are
\nrecognized to act as medium and coordinator for all issues related to
\ntheir respective body vis-\u00e0-vis the Organization.
\nChapter Four:
\nGuarantee and Transfer of Foreign Capital
\nArticle (8)
\nForeign investments under this law shall equally enjoy all, rights,
\nprotections, and facilities provided for domestic investments.
\nArticle (9)
\nForeign Investments shall not be subjected to expropriation or
\nnationalization, unless for public purposes, in accordance with due of
\nlaw, in a non-discriminatory manner, and upon payment of appropriate
\ncompensation on the basis of the real value of the investment
\nimmediately before the expropriation.
\nNote1. Application for compensation shall have to be submitted to the
\nBoard within one year from the date of
\nre- expropriation or nationalization.
\nNote 2. Disputes arising from expropriation or nationalization shall be
\nsettled by virtue of the provisions of Article (19) of this Law.
\nArticle (10)
\nCeding the whole or part of the foreign capital to domestic investor
\nand\/or, upon approval of the Board and confirmation of the Minister of
\nEconomic Affairs and Finance, to other foreign investor is permissible.
\nIn case of ceding to another foreign investor, the cedee shall, at least,
\nhave the same qualifications as the initial investor, and shall replace
\nand\/or become a partner to the former investor from the standpoint of
\nthis Law.
\nChapter Five: Provisions on Admission, Importation and
\nRepatriation of Foreign Capital
\nArticle (11)
\nForeign capital may be imported into the country by way of one or a
\ncombination of the following manners to be protected by this Law:
\na) Sums of cash to be converted into Rials;
\nb) Sums of cash not to be converted into Rials but to be used directly
\nfor purchases and orders related to foreign investment;
\nc) Non-cash items after evaluation by the competent authorities.
\nNote. Arrangements related to the manner of evaluation, and
\nregistration of foreign capital shall be determined in the Implementing
\nRegulations of this Law.
\nArticle (12)
\nThe rate of conversion of foreign exchange applicable at the time of
\nimportation or repatriation of foreign capital as well as the rate for all
\ntransfers, in case of applicability of a unified rate of exchange, shall be
\nthe same rate prevailing in the country’s official network; otherwise, the
\napplicable rate shall be the free-market rate as acknowledged by the
\nCentral Bank of the Islamic Republic of Iran.
\nArticle (13)
\nThe original foreign capital and the accrued profits, or the balance of
\ncapital remaining in the country subject to a three month prior notice,
\nafter fulfillment of all obligations and payment of legal deductions, and
\nupon confirmation by the Minister of Economic Affair and Finance, shall
\nbe transferable abroad.
\nArticle (14)
\nDividends of foreign investments after deduction of taxes, dues and
\nstatutory reserves, upon the approval of the Board, and confirmation by
\nthe Minister of Economic Affairs and Finance, shall be transferable
\nabroad.
\nArticle (15)
\nPayments related to the installments of the principal of the financial
\nfacilities of foreign investors and relevant expenses, agreements for
\npatent rights, know-how, technical and engineering assistance, trade
\nmarks and names, management as well as similar agreements within
\nthe framework of the relevant foreign investment, upon the approval of
\nthe Board and confirmation by the Minister of Economic Affairs and
\nFinance, are transferable abroad.
\nArticle (16)
\nTransfers referred to in Articles (13) , (14) and (15), shall be made
\nsubject to the provisions of Para (b) of Article (3) of this Law.
\nArticle (17)
\nForeign exchange required for the transfers referred to in Articles (14),
\n(15) and (16) of this Law may be secured by way of the following
\nmethods:
\na) Purchase of foreign currency from the banking system;
\nb) Out of the foreign exchange earnings from the export of the products
\nand\/or out of the foreign exchange earnings from service activities of
\nthe economic entity in which the foreign capital is employed;
\nc) The export of permissible goods subject to the relevant laws and
\nregulations.
\nNote1. Application of one or a combination of the above methods shall
\nbe specified in the investment license.
\nNote 2. The Central Bank of the Islamic Republic of Iran is under
\nobligation, to make available to the foreign investor the equivalent
\nforeign currency for the transferable sums referred to in Para (a), upon
\nagreement of the Organization and confirmation by the Minister of
\nEconomic Affairs and Finance.
\nNote 3. In case the investment license expressly refers to Para (b)
\nand\/or (c) of this Article, this license is regarded as an export license.
\nArticle (18)
\nTransfer abroad of the portion of the foreign capital imported into the
\ncountry within the framework of the investment license but remains
\nunused, is released from all foreign exchange, and export and import
\nlaws and regulations.
\nChapter Six: Settlement of Disputes
\nArticle (19)
\nDisputes arising between the Government and the foreign investors in
\nrespect of the mutual obligations within the framework of investments
\nunder this Law, if not settled through negotiations, shall be referred to
\ndomestic courts, unless another method for settlement of disputes have
\nbeen agreed under the Law for Bilateral Investment Agreement with the
\nrespective Government of the foreign investor.
\nChapter Seven: Final Provisions – Article (20)
\nThe relevant executive bodies are required to take, measures, upon the
\nrequest of the Organization, for the issuance of entry visa, residence
\npermit, work and employment permit, as the case may be, for foreign
\ninvestors, managers and experts working for the private sector involved
\nin foreign investments under this Law, as well as their immediate relatives.
\nNote. Differences of opinions between the Organization and executive.
\nbodies. Will be settled upon the opinion of the Minister of Economic
\nAffairs and Finance.
\nArticle (21)
\nThe Organization is required to provide for the public to have access to
\nall information related to investments, foreign investors, investment
\nopportunities, Iranian partners, fields of activity and other information
\navailable to the Organization.
\nArticle (22)
\nAll Ministries, state-owned companies and organizations as well as
\npublic institutes to whom the applicability of law is required to be
\nstipulated by name, are under obligation to provide the Organization
\nwith reports on foreign investments implemented as well as information
\nrequired for foreign investors I so that the Organization can proceed In
\naccordance with the above Article.
\nArticle (23)
\nThe Minister of Economic Affairs and Finance is required to provide,
\nevery six months, the relevant committees in Islamic Consultative
\nAssembly with a report on the performance of the Organization with
\nrespect to foreign investments under this Law.
\nArticle (24)
\nAs from the date of ratification of this Law and its t Implementing
\nRegulations, the Law for the Attraction and Protection of Foreign
\nInvestments ratified on November 28, 1945 – as well as its
\nImplementing Regulations are repealed. The provisions of this Law shall
\nbe repealed or altered by subsequent laws and regulations in the event
\nthat repeal or alteration of this Law would have been stipulated in those
\nlaws and regulations.
\nArticle (25)
\nThe Implementing Regulations of this Law shall be prepared by the
\nMinistry of Economic Affairs and Finance and shall be subsequently
\napproved by the Council of Ministers within two months.
\nThe above Law comprised of 25 Articles and 11 Notes has been
\napproved by the Islamic Consultative Assembly in its session.<\/p>\n","protected":false},"excerpt":{"rendered":"
Chapter One: Definitions Article (1) The terms and expressions used in this Law shall have the following meanings: Law: The Law for the Promotion […]<\/p>\n","protected":false},"author":1,"featured_media":3457,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1107],"tags":[1233],"class_list":["post-3461","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investment_process_en","tag-foreign-investments"],"acf":[],"yoast_head":"\n