Law on the Encouragement and Protection of Foreign Investment of the Islamic Republic of Iran
Law on the Encouragement and Protection of Foreign Investment
Chapter 1 Definition
Article 1
The terms and phrases used in this law have the following meanings:
Law: Law on the Encouragement and Protection of Foreign Investment
Foreign Investment Person: A non-Iranian natural person or legal person who has obtained an investment license in accordance with Article 6 of this Law or an Iranian natural person or legal person who uses foreign funding sources.
Foreign capital: Cash or non-cash capital introduced into Iran by foreign investors includes the following:
1. The introduction of convertible foreign exchange cash in Iran through the banking system or other channels and approved by the Central Bank of Iran.
2． Machinery and equipment
3. Instruments, spare parts, bulk parts, raw materials, additive materials, auxiliary materials
4. Patent rights, proprietary technology, brands, trademarks, professional services
5. Transferable dividends to foreign investors
6. Other items approved by the Cabinet
Foreign investment: foreign capital utilized in a new economic sector or an existing economic sector after obtaining investment permission
Investment permission: in accordance with this law Article 6 Licensing issued for each foreign investment
Organization; Iranian investment and economic and technical assistance mentioned in Article 5 of the Law on the Establishment of the Ministry of Finance and Economics passed on April 24, 1353 AH Organization
Supreme Council: The Supreme Council mentioned in Article 7 of the Constitutional Law of the Iranian Investment and Economic and Technical Assistance Organization passed on March 12, 1354 AH.
Commission: the Foreign Investment Committee mentioned in Article 6 of this Law.
Chapter 2 General Conditions for Accepting Foreign Investment
Article 2
Accepting foreign investment should be conducive to the development of industry, mining, agriculture and service industries The production shall be carried out in accordance with this Law and in compliance with other current laws and regulations of the country, and in accordance with the following guidelines:
1. Conducive to economic growth, improvement of technical level and product quality, increase of employment opportunities and growth in exports.
2. Do not threaten national security and public interests, do not damage the production environment, do not disrupt the national economy, and do not disrupt production activities that rely on domestic investment.
3. Do not cause the government to provide special privileges to foreign investors. Privileges refer to the rights that place foreign investors in a monopoly position.
4. The ratio of the value of products and services produced by foreign investment in this law to the value of products and services in the domestic market at the time of issuance of the license shall not exceed 25% in each economic sector and shall not exceed 35% in domestic industries. %. The "Implementation Rules of the Investment Law" to be approved by the cabinet will clarify the industries and quantities in which foreign capital can invest
Foreign investment used for production exports and provision of export services (except crude oil) is not subject to the above-mentioned proportion restrictions.
Remarks
The "Law on Real Estate Ownership by Foreign Citizens" promulgated on July 7, 1931 is still in effect. This law does not allow the ownership of any form or amount in the name of foreign investors. land.
Article 3
Foreign investments accepted by this Law shall enjoy the benefits of this Law and shall be protected by this Law. These investments are accepted through the following two channels:
1. Foreign capital is directly invested in areas open to private enterprises.
2. Foreign capital is invested in all industries in the form of "national participation", "buyback" and "construction, operation and transfer". However, these investments do not rely on guarantees provided by the government, banks, and state-owned companies. The principal and interest are repaid entirely with the proceeds from investment in economic projects.
Note 1
If the foreign capital entered in the form of "Build, Operate and Transfer" (BOT) in Paragraph 2 of this Article and its profits have not been repaid, the foreign investor shall have the right to The exercise of ownership rights over capital shares in the investment economic sector.
Remark 2
Regarding the investment in Paragraph 2 of Article 3 of this Law, if a new law or government decision causes the execution of a signed financial contract to be prohibited or suspended, the losses incurred will be The government repays it, up to the amount of the installment due. The Cabinet of Ministers will determine the scope of acceptable compensation within the framework of this law.
Article 4
Investments by foreign governments in Iran must be approved by the parliament on a case-by-case basis, and investments by foreign state-owned companies will be regarded as investments by private companies.
Chapter 3 Authoritative Institutions
Article 5
The organization is the only official institution of the state that encourages foreign investment and handles all matters related to foreign investment. Foreign investors must submit applications related to investment, capital entry, project selection, and capital withdrawal to the organization.
Article 6
For the purpose of reviewing and approving applications under Article 5, a Foreign Investment Committee will be established, chaired by the Vice Minister of Finance and Economics, with members including the Vice Minister of Foreign Affairs, State Administration and the Vice-President of the Planning Organization, the Vice-President of the Central Bank and, as appropriate, the Deputy Minister of the relevant Ministry.
The investment license can be issued after it is approved by the committee and signed by the Minister of Finance and Economics.
When accepting foreign investment, the Commission shall comply with the provisions of Article 2 of this Law.
Remarks
After receiving the investment application, the organization should conduct a preliminary review of the application within fifteen days and submit its opinions to the committee. The committee should review the investment application within one month after the organization submits its opinions. Conduct research and publish approval results in writing.
Article 7
In order to simplify and speed up the review and approval procedures for foreign investment applications, all relevant agencies including the Ministry of Finance, Ministry of Foreign Affairs, Ministry of Commerce, Ministry of Labor, Central Bank, Customs, Industry Ownership enterprises, company registration authorities, environmental protection organizations, etc. should recommend to the organization a plenipotentiary representative signed and approved by the top leader of the unit. Recommended representatives serve as coordinators and liaisons between the department and the organization, handling all matters related to the department.
Chapter 4 Protection and Transfer of Foreign Capital
Article 8
Foreign investors covered by this Law enjoy the same rights and protections as domestic investors. and offers.
Article 9
No foreign investment may be confiscated or its property nationalized. Unless it is in the interest of the public, in accordance with the provisions of the law, in a non-discriminatory manner, their property may be confiscated or their ownership may be nationalized. But before that, appropriate compensation should be given as soon as possible according to the actual value of the investment.
Note 1
Requests for compensation for losses must be submitted to the Commission within one year after the property is confiscated or ownership is nationalized.
Remark 2
Disputes arising from confiscation of property and nationalization of ownership will be resolved in accordance with Article 19 of this Law.
Article 10
Foreign capital may be transferred in part or in full to a domestic investor or to another foreign investor with the consent of the Commission and the approval of the Minister of Finance and Economy. Once capital is transferred to other foreign investors, the recipient must meet the minimum investor conditions and will be deemed the successor and participant of the former investor in accordance with the provisions of this Law.
Chapter 5 Regulations on Acceptance of Foreign Investment and Entry and Exit
Article 11
Foreign capital may enter Iran in one or more of the following ways and be subject to this regulation. legal protection.
1. Convert cash to rial.
2． Cash not converted into rial used for direct purchases or orders of goods related to foreign investments.
3. Non-cash capital assessed by authoritative agencies.
Remarks
The implementation details of this law will clarify the registration procedures and assessment of foreign investment.
Article 12
If a single exchange rate, that is, the country’s official exchange rate, is used for the entry, exit and transfer of foreign capital, settlement will be based on the official exchange rate. If a single exchange rate is not implemented, settlement will be based on the free market exchange rate of the day confirmed by the central bank.
Article 13
After the company has completed all its obligations and paid the statutory fees, it shall notify the committee three months in advance. After approval by the committee and approval by the Minister of Finance and Economics, the company may transfer the original Investments, derived profits or investment balances are remitted out of Iran.
Article 14
After deducting taxes, fees and statutory reserves, profits from foreign capital may be remitted out of Iran after being approved by the committee and approved by the Minister of Finance and Economy.
Article 15
Within the framework of the Foreign Investment Law, upon approval by the Commission and approval by the Minister of Finance and Economy, preferential installment payments as well as patents and proprietary rights shall be granted to foreign investors. Fees for various contracts such as technology, technical services, consulting and design, branding, trademarks and management can be remitted overseas.
Article 16
The transfer of foreign capital mentioned in Articles 13, 14 and 15 shall be implemented in accordance with the provisions of paragraph 2 of Article 3 of this Law.
Article 17
Foreign capital transfers mentioned in Articles 12, 14 and 15 shall obtain foreign exchange in the following ways.
1. Buy foreign exchange from a bank.
2． Sectors of the economy that use foreign capital obtain foreign exchange by exporting the products they produce or providing services.
3． Foreign exchange earned from exporting legal goods in accordance with relevant laws and regulations.
Remarks 1
The investment permit must indicate one or more of the above channels.
Remark 2
The Central Bank shall, after obtaining the consent of the organization and the approval of the Minister of Finance, ensure the remittable foreign exchange provided to foreign investors in paragraph 1 of this article.
Remarks 3
The investment licenses in paragraphs 2 and 3 of this article will be regarded as export licenses.
Article 18
Within the investment licensing framework, the unused portion of foreign capital entering Iran is not subject to restrictions on foreign exchange laws and regulations and import and export regulations when it withdraws from Iran.
Chapter 6 Dispute Resolution
Article 19
If investment disputes between the government and foreign investors cannot be resolved through negotiation, they shall be settled by domestic courts. Mediation is required unless the government of the country where the foreign investor is located has agreed to other means of settlement in the bilateral investment contract.
Chapter 7 Others
Article 20
The relevant executive departments shall, in accordance with the requirements of the organization, issue visas, residence permits, business licenses, and arrange employment. Facilitate foreign investors, foreign managers, foreign experts and their immediate family members who invest in private enterprises.
Remarks
Disputes between the organization and implementation departments will be resolved based on the opinions of the Minister of Finance and Economics.
Article 21
Organizations have an obligation to inform the public about foreign investors, foreign investments, investment opportunities, partners in Iran and other aspects.
Article 22
All ministries, state-owned companies, government-affiliated organizations and public institutions that implement this law are obliged to provide information on foreign investment to the organization and reports. in order for the organization to take action in accordance with the preceding clause.
Article 23
The Minister of Finance shall submit a report on the organization's work in foreign investment to the relevant committee of the Parliament every six months.
Article 24
This Law and its Implementing Rules shall be effective from the date of their adoption. 》Invalid. Foreign capital previously accepted under the original investment law is brought under the jurisdiction of this law. If the content of this law is replaced or modified by future laws and regulations, the new law will explain it.
Article 25
The implementation details of this law will be formulated by the Ministry of Finance and Economics within two months and submitted to the Cabinet for approval.