Q: What appeal do you believe Iran has for FDI?
A: Iran is a big country with a diversified economy and young and educated people. It has a large pool of trained and efficient human resourses at a very competitive cost, an extensive industrial background, a vibrant services sector and a unique geographical location at the heart of a crossroads connecting the Middle East, Asia and Europe. Another attractive feature of the country is its market potential. Iran has a vast domestic market, with a steadily growing population now numbering 80 million. It also has easy access to neighbouring markets with approximately 400 million inhabitants. And Iran's political stability and security in a region undergoing a bout of unrest makes the country a trustworthy destination for potential investors.
Q: Beyond oil and gas, what opportunities exist for foreign investors in Iran?
A: Iran is mostly known as a hydrocarbons-rich economy. However, the country possesses highly diversified fields of activities and opportunities for foreign investors. Industries such as car manufacturing, steel producing, the oil and gas industries, the petrochemical industries and food and agribusiness are important parts of the economy. It should be added that the administration of president Hassan Rohani has succeeded in reducing inflation from record high of 40% to 15%.
The Iranian ICT sector is exponentially growing thanks to its unique combination of demographic and economic variables. The reason behind this growth is Iran’s population, which is large, young and enthusiastic when it comes to picking up new technologies.
Another promising field is the construction sector. Encouraged by the country’s youthful demographic trends, investors are looking at real estate more and more, as the sector has stood the test of time as a safe, fixed asset. Iran’s young demographic profile, which is growing at 1.24% per year, has justified this increase in construction activity.
The health sector is another attractive field to invest in. An exceptional workforce and a flourishing pharmaceuticals industry have spurred growth in Iran’s healthcare sector in recent years.
Finally, tourism is a prospective target for investors. A successful domestic tourism market has laid the groundwork for an increased number of foreign visitors interested in Iran’s history, its natural beauty and its business opportunities.
Q: What incentives are in place to attract investors? Are there any new incentives being planned?
A: There are some tax incentives for investment. For example, in the mining and manufacturing sectors, 80% of income is tax exempted for a four-year term. The income derived from all activities in agriculture, fish farming, bee keeping, poultry and husbandry is tax exempt with no time limitation.
There are also tax exemptions in the tourism sector, and 100% of taxable income of all units located in lesser developed areas will be tax exempt for a period of 10 years. In addition, all enterprises, domestic or foreign, that have obtained a utilisation permit from authorities will enjoy an annual exemption equal to 50% of their applicable taxes.
Q: The government has renewed its bid to join the World Trade Organization [WTO]. Do you see the current development on the negotiations over the country’s nuclear development programme playing in favour for Iran’s bid to join the WTO? What benefit do you expect for FDI from WTO membership?
A: For more than a decade Iran has been an observer member of the WTO. Certainly new political developments managed by the government of Mr Rohani can ease the process of accession to the WTO.
Based on the general policies that have been endorsed by the Iranian general economic framework during the past two decades, the government is obliged to give up its control on the majority of the economic activities and enhance the role of the private sector.