International Agreements
The principal law regarding the Iranian applicable legal system in relation to the International Agreements is the “Foreign Investment Promotion and Protection Act” (the “FIPPA”) which has been ratified on 10th March 2002.
International Agreements
The mentioned law consists of 7 chapters by the below topics:
- Definitions
- General terms regarding admission of the foreign investment
- Relevant and competent authorities
- Protections on foreign investors and transferring the investment
- Types of investment and the rules regarding importation and repatriation of foreign capital
- Dispute resolution mechanisms
- Final provisions
As it was previously mentioned, since the FIPPA is the most relevant law regarding the investment and international agreements in Iran, we will discuss some of the critical issues by referring to the FIPPA in this paper.
What is the legal definition of foreign investment and what kinds of that are possible in Iran?
According to Article 1 of the FIPPA, the main criterion of foreign investment is not related to the nationality and the foreign origin of that should be considered. Therefore, Iranian nationals may enjoy from the provisions as well if the originality of the investment related to abroad.
By virtue of Article 3, there are only two ways for the establishment of foreign investment:
- Foreign Direct Investment (FDI) in the fields that the private sectors are allowed to do so.
- Foreign Investment through “civil partnership”, “buy-back” and ‘build- operation- transfer (BOT)”.
What is the competent authority regarding issuing the authorization?
Pursuant to Article 5, the sole official competent authority for the promotion of the foreign investment in Iran is the Organization of Iran Investment (the “Organization”). Therefore any application should be submitted before the organization whether by Iranian nationals or foreigners.
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