Decreed and amended by the High Council of Free Trade‑Industrial zones
June 16,1994, No. K23T/33432, October 24,1994, No. K86T/40688
November 12,1995, No. K 15795t/49047, January 7,1997, No.
K 16685T / 108859
In these regulations, the following terms are used in lieu of the corresponding phrases:
Mainland: The Islamic Republic of Iran, excluding the Free Trade and Industrial Zones
Authority: The Authority of each Free Trade and Industrial Zone of the Islamic Republic of Iran.
Zone: Fach Free Trade and Industrial ‘Lone of the Islamic Republic Iran.
Investment: The utilization of capital in different forms in any economic activity for the purpose of manufacturing goods and providing services.
Foreign Capital: All the types of capital mentioned in Article (3) of these Regulations (save Rial amounts) imported into the Zones by foreign investors.
Foreign Currency Capital: The capital mentioned in Article (3) of these Regulations (Save Rial amounts) that is imported into the Zones from outside the mainland by Iranian national,..
Net Profits: The excess of realized income earned by an entity over expenses incurred in a financial I)rriod resulting from profit making activities, identified and measured in accOrdLutce with generally accepted accounting principle
All natural and legal persons and institute, both Iranian and foreign, as Well as international organizations, may either separately or jointly with the Authority and affiliates thereof or jointly with each other ingest in the Free Zones in accordance with these Regulations; their accepted capital shall be subject to these Regulations.
For the purpose of these Regulations, capital shall comprise:
a. Rial amount and tOreien currency amounts convertible in the Zones (each lone);
b. Machinery, equipment. parts and tools;
c. Industrial property rights including patents, technical know ‑how, trademarks and names;
d. Land, air and sea‑going vehicles related to the investment;
e. All or part of transferable net profits generated in the Free Zones and added to the initial capital utilized in another authorized activity governed by these Regulations.
In special cases, raw materials and semi finished parts may, at the discretion of the Authority, be accepted as a part of foreign capital.
Capital shall be accepted ;in(] made subject to these Regulations under the following conditions:
a. to be utilized in activities authorized by a Zone;
b. to complete the entire procedure for the grant of the investment permit mentioned in Article (6) and (7);
c. it does not involve the granting by the Authority to the investor of a concession or monopoly rights.
Foreign investors may participate in the economic activities of the ‘Lone up to any ratio (of the amount of investment)
The investors mentioned in Article (2) of these Regulations that wish to import their capital in any of the Zones must submit to the ‘Lone Authority their application together with a questionnaire (prepared by the secretariat and the Zone Authority and placed at the said investors disposal). Applications received in a Zone shall be examined by the Zone Authority and an investment permit issued by the Authority of that Zone.
Alterations to the contents of the questionnaire and the investment permit may only be made with the knowledge and, where necessary, approval of the Zone Authority.
Exploitation of the activity subject to the investment license ,hall be upon tile exploitation license issued by teh zone Authority.
Within the period specified in the investment permit, the holder of an investment permit must import into the Zone a set percentage of tile capital in order to commence implementation of the activities mentioned in tile investment permit.
The importation and registration of capital in Free Zones shall be undertaken in the following manner:
(1)The Capital mentioned in Article 3 (a) of these Regulations shall be deposited in the bank (or authorized credit institute) account of the entity in which the investment is to be made and, after computation of the Rial or foreign currency countervalue, as tile case may be, at the date of the deposit and in a accordance with the certificate of the bank (or the authori/ed credit institute), registered as the capital of the investor in the register of tile Zone Authority.
(2)The capital mentioned in Article 3 (b) and (d) of these Regulations and as specified in the investment permit and evaluated as per their (‘lh value evidenced by documents and relevant invoices shall, after review by the lone Authority, be converted; the foreign exchange value thereof and. concurrently, its Rials equivalent (at the current rate of exchange posted in the Zone) shall be registered as of that date as the capital of the investor in the register of the Zone Authority.
(3) The capital mentioned in Article 3 (c) of these Regulations shall, after its evaluation has been confirmed by the Zone Authority, be registered as capital in the register of the Authority. Allocation of the value of the technical know‑how to the capital account shall be concurrent with tile transfer of said technical know‑how.
(4) The capital mentioned in Article 3 (e) of these Regulations
shall, after confirmation by an auditing firm acceptable to the
Zone Authority, he registered as capital in tire rcgistcr ol~the
Zone Authority in the lirllowing manner:
a. After obtaining the approval of the Authority , with the aim of increasing the capital to expand investment in the same entity;
b. After obtaining the approval of the Authority, with the aim to expend investment in activities other than activities for which permission has been granted.
c. After following the procedure set forth in Article 6 of these Regulations. if the aim is to invest in activities other than the activity for which the investment permit was issued.
d. Whenever all or part of imported capital in kind is deemed in the judgment of the Authority as defective, damaged or useless, or do not conform with the specifications declared in the application, or whose declared value exceeds its real value, such portions of its price are not confirmed by the Authority and shall he carried into the capital account.
e. In cases where capital goods mentioned in Article 3 (b) and (d) of these Regulations belonging to foreign investors were previously used on the Mainland and transferred to the Zones with the authorization of relevant Mainland authorities, the transfer of such goods shall be deemed as a transfer of domestic capital and shall be subject to the provisions of these Regulations.
Investors may insure the capital the), import into the ‘/.ones. If, pursuant to the occurrence of a contingency. an insurance company becomes the subrogate of the investor in accordance with the insurance policy, such subrogation by virtue of payment ofcompensation to the insures shall be recognized; however, it shall not be deemed as an assignment of capital.
The legal rights of foreign investors are guaranteed and protected. Equitable compensation for damages shall be paid by the Authority in cases where the capital of foreign investors in nationalized by law in the public interest and/or said investors property is taken. In such cases, investors must within a period ol’six months from date of the expropriation file with the Authority a request for compensation for damages incurred. The Authority shall evaluate at current prices the amount of damages incurred and within a period of three months pay compensation thereof. The Zone Authority may undertake the aforementioned guarantees through contractual arrangements with the Central Bank and other banks, credit institutes and insurance companies.
In case the investors subject to this article are inclined to have (lie guarantee mentioned in the Law on Attraction and Protection of Foreign Investments (approved in 1955), to be fulfilled, their proposal of investment has to be submitted to the body subject to the Article (2) of the above‑‑mentioned law. Issuance of guarantee shall be allowed in compliance with the procedures and formalities defined in (lie Law.
Each year all entities set up in a Zone pursuant to investment permits must communicate to the Authority a report on their operations and their financial accounts; the financial accounts must be confirmed by an auditing firm acceptable to the Authority.
Repatriation from the Zones of net profits, the initial capital and gains resulting from economic activities undertaken with foreign capital and foreign crrency capital as well as the proceeds of the sale or transfer of these types of capital is permitted.
Upon the request of such investors, and after verification that the amounts for which repatriation from a Zone is requested result from utilization of the investors registered capital in the activity specified in tile investment permit, and alter ensuring that the circumstances set forth in the following Note have been taken into account, the Zone Authority Shall issue the necessary authorizations within one week from date of rcccipt of the said request.
In its review, the Zone Authority must take into account whether the investor may benefit from the tax exemptions mentioned in Article 13 of’ the I.aw on tile Administration of the Free Zones and whether the amounts for Much repatriation is requested are net amounts.
Payments of installments of the principal of loans and related expenses, as well as payments pursuant to patent, technical know‑how, technical assistance and engineering, trademark, management and similar contracts are authorized if the authority is intOrmed and if they ;ire made within the framework of investment projects based on relevant contracts and financial statements.
Investors may transfer their share of stock to other investors x% ith the authorization of the lone Authority. In such case, the transferee shall he deemed in every respect the successor of the original investor.
The transfer of capital from one lone to another lone shall be subject to the investment regulations of the Zones from which the capital departs and in which it enters.
Disputes between foreign investors and Iranian parlies shall be settled in accordance with contracts and written agreements.