Iran is among the countries with most energy resources in the world. In addition to vast resources of fossil fuels such as oil and gas, Iran has a great potential in the field of renewable energies such as wind, solar, biomass and geothermal energy. Iran is also among the countries with specific objectives and policies in regard to renewable energy. In fact, the strategic plan of Iran in respect of the energy sector is optimized exploitation of fossil fuels and enhancing the exploitation of renewable energy in order to satisfy the growing need to energy in the country.

According to recent laws and regulations, the Organization of Renewable Energy of Iran (SUNA) under auspices of Energy Ministry of Iran purchases the power from investors concluding the Power Purchase Agreement (PPA) with SUNA, based on new feed-in tariffs for a period that has increased from 5 to 20 years. It also should be noted that feed-in tariffs differ by power plant technology type. The feed-in tariffs will be annually adjusted, but the adjusted tariffs will not be applied to the PPA already concluded.

As the first step of the procedure, foreign investors need to submit an application for project registration with SUNA. In order to apply for the registration, foreign investors need to register a company in Iran, as only “Iranian” persons may apply for the said registration. A company registered under Iranian laws shall be regarded as an “Iranian” company even if 100% of the shares is owned by foreign investors. They also may purchase shares of existing Iranian companies, which would be an applicant of the registration.

After it has been verified that the application meets the requirement, the construction permit shall be issued. It is noteworthy that more than 25% of the shares of the foreign investors holding the permit may not be transferred prior to commissioning.

Afterwards, the foreign investors need to acquire three different licenses including the Environmental permit, Grid Connection permit and Land permit. These permits shall be obtained within six months after the construction permit issued. If the applicant has obtained 2 out of 3 permits at the expiry of the period, it might be extended.

Only after obtaining the said three permits, the foreign investors may conclude the PPA with SUNA and construction of the power plant may commence. It should be noted that in order to apply the previously mentioned tariffs in regard to the PPA, it is required for the Bio Mass, Geothermal and Micro Hydro power plants to reach commercial operation within 30 months. The said period for Wind Farms and Solar power plants is 24 and 15 months respectively. If these periods have passed before starting of the commercial operation, the then-current feed-in tariffs would apply.

Notwithstanding these challenges, Iran is one of the most attractive market of renewable energies, with vast resources of renewable energies and governmental policies to support it. 

It is evident that establishing a power plant requires proceeding with different legal stages and acquiring the essential licenses/permits. Accordingly, it is of the utmost importance to enjoy legal consultation of the specialized legal experts in this field. In this regard, Dadpooyan Hami International Law Firm is ready to provide the investors with the required services in this sector.

Our IP team excels at delivering winning legal strategies in high-stakes intellectual property disputes, including patent and design matters. We understand our clients’ businesses and the critical role that IP plays in Iran. Our ability to handle the complicated technical and administrative issues which are often intertwined with IP disputes in Iran.

Patent in Iran

  • Filing and prosecuting foreign patent applications
  • Preparing and filing patent appeal briefs before Iran Patent Office
  • Litigating patent  disputes
  • Analyzing prior art and rendering patentability opinions
  • Rendering legal opinions concerning the validity and infringement of patents
  • Developing and managing patent portfolios
  • Counseling patent owners regarding strategies and likelihood of success
  • Preparing and negotiating patent license agreements and assignments
  • Patent search in Iran including patentability, state of the art, infringement and Freedom to Operate search.
  • Patent watch in Iran

patent

Industrial Design in Iran

  • Industrial Design Registration in Iran
  • Preparing and filing design appeal briefs before Iran Patent Office
  • Litigating design disputes
  • Analyzing prior art
  • Rendering legal opinions concerning the validity and infringement of design
  •  Management of  design portfolios
  • Licensing

Dadpooyan Hami International Law Firm with utilizing lawyers and legal advisors could codify and prepare types of your internal and international contracts in order to preventing disputes and diminishing claims in judicial and administrative authorities. You with utilizing professional lawyers and legal advisors could protect yourselves rights in contracts and in judicial authorities.

Legal Overview of Lands in Iran

Introduction

Ownership is a permanent right through which a person can possess a property according to the regulations and enjoy all interests thereof. Ownership is a useful notion throughout the legal systems around the world, which was created with the creation of humans on earth. The owners’ rights and the pertinent governing regulations have gradually experienced many changes.( Legal Overview

One of the ownership rights and perhaps the most important one is ownership of lands. Land, as an immovable property, have been one of the most essential needs of humankind throughout the history. Due to its significance and dependency on domestic borders and economy of countries, the legislatures have always ratified regulations that increase the interference of governments on different grounds such as social necessities, public interests, social expediency and sovereignty and also try to enhance the use of lands in order to benefit from the value thereof in economy and investment. However, these regulations are not always passed to the prejudice of people. In fact, the result of these regulations might be to the benefit of persons.

After lifting of sanctions, foreign investors enter into Iran’s market with a positive view. Some of the investors have commenced their activity in different industrial, agricultural and commercial sectors and some are gathering financial, economic and legal information in order to evaluate the economic justification for entering into the Iranian market.

Domestic and foreign investors of several sectors including Tourism Industry, Hotels and Renewable Energy Power Plants (wind, biomass and solar), need to purchase or lease the lands of their projects. Due to the multiplicity of laws and regulations in this regard, it would be impossible to purchase or lease lands without legal assessment of different types of lands, the owner(s), being assured that the persons possessing the land or selling it are true owners, assessing legal deeds and documents of transfer and also acquiring the deed of title or official deed.

Legal Overview of Lands in Iran

Trade Mark

Under Iranian law, a trademark can be protected on the basis of registration. Registration Process of a Trade Mark in Iran is as follows:

1- Submission of application to registration office (Industrial Property Office).

2- Examination of application: Registration office must examine the application based on legal conditions and documents within 30 days of the date of Submission. This examination includes both Substantive and procedural conditions.

3- Defects in application: If there is a defect in the application, applicant can correct it within 60 days. Otherwise, the Office rejects the application.  Refusal of application can be objected in the Special Commission.

4- Acceptance and publication of application: If no defect found in application or the defect has been corrected within specified time, registration office will accept the application and then publish it.

5- Objection to acceptance:  Any interested party may protest to the registration of Trade Mark within 60 days of publication date. The objection will be considered in the Special Commission.

6- Registration of Trade mark : The applicant shall deliver published notice to the Office. Then if Office determines legal conditions within 30 days of publication date, the mark will be registered after payment of the related costs.

Trade Mark

Note: For foreign applicants who have submitted their request directly to the registration authority in execution of Paris Convention (Mark Registry of Industrial Property General Office), they should pay foreign currency equivalent to Rial.

Iran’s Membership in International Trade Mark Conventions

  1. Paris Convention for the Protection of Industrial Property (1883)

Iran has been a member of the Paris Convention for the Protection of Industrial Property since 1998.

  1. Madrid Agreement (1891) and Protocol Relating to the Madrid Agreement (1989) Concerning the International Registration of Marks

On 25 September 2003 Iran acceded to both the Madrid Agreement and the Madrid Protocol on the International Registration of Marks with the World Intellectual Property Organization (WIPO). The Madrid Agreement and the Madrid Protocol came into force in Iran on 25 December 2003.


Dadpooyan Hami International Law Firm with utilizing lawyers and legal advisors could codify and prepare types of your internal and international contracts in order to preventing disputes and diminishing claims in judicial and administrative authorities. You with utilizing professional lawyers and legal advisors could protect yourselves rights in contracts and in judicial authorities.

iranian Oil

● Introduction

 The Ministry of Petroleum of the Islamic Republic of Iran is responsible for all kinds of oil and gas activities. The Ministry by itself has got the four major subsidiaries body as follows which undertake implementation and operation of the above mentioned activities: ( iranian Oil )

  • National Iranian Oil Company (NIOC)
  • National Iranian Gas Company (NIGC)
  • National Iranian Oil Refining & Distribution Company (NIORDC)
  • National Petrochemical Company (NPC)

The Iran’s Unique Position in terms of hydrocarbon reserves is as follows:

  1. Iran is endowed with 155 billion barrels of oil equivalent to 10.9% of the global oil reserves.
  2. Iran owns 18% of the global natural gas reserves equal to 34 TCM of natural gas. III. Iran’s current exploration projects will lead to a considerable increase in the country’s oil and gas reserves.
  3. Presently, 62 onshore oil fields, 16 offshore oil fields, 20 onshore gas fields, and 2 offshore gas fields are in operation in Iran.
  4. 26% of hydrocarbon reserves and 50% of natural gas reserves are located across Iran’s common borders with its neighbors.

iranian Oil

Currently, Iran, with 33/6 trillion cubic meters of natural gas reserves which is equivalent to 234 billion barrels of crude oil reserves, is the world’s largest owner of gas reserves. In its last official report, National Iranian Oil Company declared that Iran’s normal and natural gas reserves are more than 33/7 trillion cubic meters and the volume of normal and recoverable crude oil reserves of the country are about 157 billion barrels; Overall, with the total volume of oil and natural gas reserves of 400 billion barrels, Iran is the world’s largest gas reserves. In order to attract foreign investment in Iranian oil and gas industry, particularly after termination of sanctions, a committee known as the “Oil Contracts Review Committee” unveiled a new contract titled “Iran Petroleum Contract (IPC)” in late 2015. The primary purpose of this Contract is to make a dramatic change in the oil and gas industry of Iran. On the other hand, Iran’s Parliament  has also played an important role in this evolution through legislation of several laws such as “Duties and Powers of the Ministry of Oil,” enacted in 2012, “Petroleum Law Reform Act” passed in 2011 and “The Fifth Development Plan” in 2010. However, The turning point of this legal evolution can be found in contractual mechanism of the implementation of projects in the upstream of oil and gas industry which is mentioned in law of “Duties and Powers of the Ministry of Oil” 2012. In this article, the legal aspects of Iran’s petroleum rules and contracts, especially for post-sanctions era, have been analyzed.

● Laws and Regulations

Legal evolution of contractual mechanism of the implementation of projects in the upstream of oil and gas industry can be tracked in law of “Duties and Powers of the Ministry of Oil” 2012 and “Petroleum Law Reform Act” of 2011. However, the main step has been taken in law of “Duties and Powers of the Ministry of Oil”. Article 1 of this law states: “Ministry of Oil is established to fulfill the general policies of the Islamic Republic of Iran in the oil and gas sector, policymaking, governance, planning and monitoring of all upstream and downstream operations in the oil, gas, petrochemical and refining, and applies its sovereignty and public ownership on oil and gas resources on behalf of the Islamic government”.

 In this law, section “D” of Article 3 “The investment and financing” allocated to the Investment subjects and oil contract patterns, and by the new legislative procedures, has effectively changed the contractual mechanism of implementation of projects in the upstream sector of the oil industry. Under this section, duties and powers of the Ministry of Oil regarding investment and financing are determined as follows:

 “1. Approval of development and investment projects in oil, gas, petrochemical and refining industries in order to complete the production chain and create further added value;

  1. Establishing effective mechanisms for attracting domestic and foreign financial resources needed to implement development projects and keeping production capacity in compliance with laws and regulations;
  2. Attracting and directing domestic and foreign capital to develop hydrocarbon fields, with priority of shared fields Through designing new contractual patterns such as cooperation with domestic and foreign investors and contractors without transferring the ownership of oil and gas stored in the tanks and in conformity with the protected production.”

 It seems that the latter paragraph, with the exception of the ownership of oil and gas in the tanks and assign it to the government, implies a contraposition in which the main element of the production sharing contracts – partial ownership of foreign oil companies in production is recognized. In other words, because in paragraph “D” of article “3”, only transfer of ownership of oil and gas in the tanks to contractors is prohibited, legal authorization is given to the Ministry of Oil to conclude contracts which lead to the co-ownership of foreign oil companies in production. However, in order to eliminate some misconceptions about the production sharing contracts, the share of foreign companies might be allocated with a particular mechanism such as delivery at the border or in a certain location so that the historical negative mindset that such sharing is against Iran’s Constitution can be set aside.

It seems that “Iran Petroleum Contract (IPC)” has be designed in accordance with paragraph “D” of article “3” of law of “Duties and Powers of the Ministry of Oil”, in which one of the duty of the Ministry is “Attracting and directing domestic and foreign capital to develop hydrocarbon fields, with priority of shared fields Through designing new contractual patterns such as cooperation with domestic and foreign investors and contractors without transferring the ownership of oil and gas stored in the tanks and in conformity with the protected production.” Prior to the new legislations, “Buyback” was the only model for petroleum contracts in Iran’s upstream oil and gas industry. By new legislations, however, the way of using partnership models has been paved and a new contract titled “Iran Petroleum Contract (IPC)” is drafted. Notwithstanding, there still is no restriction in using “Buyback” contracts. Therefore, both “Buyback” and “IPC” will be reviewed in this section.

Download Pdf : The Governing regulations of iranian Oil and Contracts


 

Dadpooyan Hami International Law Firm with utilizing lawyers and legal advisors could codify and prepare types of your internal and international contracts in order to preventing disputes and diminishing claims in judicial and administrative authorities. You with utilizing professional lawyers and legal advisors could protect yourselves rights in contract and in judicial authorities.

Arbitration

●Introduction

Arbitration is a kind of private adjudication by which parties to a commercial contract can resolve their disputes outside of any judicial system. One of the main reasons of incorporating an arbitration clause in an international agreement is that parties can be certain about enforceability of the arbitral award. Many countries have adopted international conventions that are pro-enforcement, that is, they provide only narrow grounds for refusing to enforce. In this article, we will first talk about arbitration in Iran and after that, we will discuss enforcement of arbitral awards in Iran.

Arbitration

●International Arbitration in Iran:

 A legislation regarding international arbitration passed in Iran’s Parliament in 1977 under the title of “International Commercial Arbitration Act (ICAA)” which has been inspired by UNCITRAL Model Law. According to article 1 of this act, ICAA will apply: 1- When one of the parties to the contract at the time of concluding arbitration agreement is not Iranian. 2- When a dispute is commercial (whether contractual or not).

●Recognition and Enforcement of Arbitral Awards in Iran:

Islamic Republic of Iran jointed to the Convention on Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention) by ratifying it in 18/04/2001. Therefore New York convention will apply to Arbitration awards. Contracting States are allowed to make two reservations as to the scope of applicability of the Convention. The first limitation is one of reciprocity: a Contracting State can provide that it will only apply the Convention to awards that are issued in the territory of another Contracting State. This reservation has been adopted by more than half of Contracting States. The second permitted reservation is that a Contracting State may “declare that it will apply the Convention only to disputes arising out of legal relationships, whether contractual or not, which are considered as commercial”. It should be noted that Islamic Republic of Iran used these reservation rights in accordance with article 1(3) of New York Convention. According to “Act of Islamic Republic of Iran’s Accession to the Convention on Recognition and Enforcement of Arbitral Awards in New York”:

 1) Iran will apply this convention only to the commercial disputes whether contractual or non-contractual.

2) Iran will apply this convention only to the awards that is issued in another contracting state. Internal awards in Iran legal system can be defined as an award that has been granted in territory of Iran and in accordance with International Commercial Arbitration Act. On the other hand when an award has been issued outside of territory of Iran, whether in accordance with International Commercial Arbitration Act or not, it is a foreign award.

●International Arbitral Awards outside of New York Convention:

Chapter 8 of International Commercial Arbitration Act, is about enforcement of the awards: “Article 35: Enforcement. 1- Excluding the cases mentioned in Articles (33) and (34), the arbitration award issued in accordance with the regulations of this Law shall be final and binding after notification. In case of “written application” from the court mentioned in Article (6), the arrangements for enforcement of court verdicts shall be executed. 2- In case one of the parties demands the cancellation of the award from the court mentioned in Article (6) of this Law and the other party demands its recognition or enforcement, the court shall prescribe that the party demanding nullification to deposit an appropriate guarantee provided that the party demanding recognition or enforcement of the judgment requests so.” A difficulty arises when an international arbitral award is neither enforceable under provisions of New York Convention nor ICAA.  For example when an award is issued in a non-contracting states and it’s also not enforceable based on ICAA. In such cases, there are three theories that can be used by a competent court: 1. Analogize a foreign arbitral award to a foreign court decision. 2. Analogize a foreign arbitral award to a foreign enforceable documents. 3. Analogize a foreign arbitral award to a domestic arbitral award whether a national award (according to Civil Procedure Code of Iran) or an international award (according to ICAA).

●Required Procedures for Enforcement

The only specific requirement imposed by the Convention is that the party applying for recognition and enforcement must provide the court with authenticated original award or a certified copy, and original arbitration agreement or a certified copy. In addition, if the award or the agreement is not in the same language used in the enforcing jurisdiction, the party must provide a certified translation of the documents.

●Defenses to Enforcement (ground for non-enforcement)

Grounds of challenging an international award in Iran are the same as grounds stated in Article 5 of the Convention. Reasons of challenging an arbitration award based on Article 5(1) are as follows:

  1. Incapacity and invalidity.
  2. Lack of notice of the appointment of the arbitrator and of the arbitral proceedings or fairness.
  3. Arbitrator acted in excess of his/her authority.
  4. The tribunal or procedure was not in accord with the parties’ agreement.
  5. The award is not yet binding or has been set aside.

Above-mentioned grounds will be applied when the losing party protests against the award. In brief, Article 5(2) defenses include:

  1. Lack of arbitrability.
  2. Violation of public policy.

These two additional defenses can be raised by the court itself. Another restriction that exists in Iran legal system is article 139 of Constitutional Code of Iran. According to “act of Islamic Republic of Iran’s Accession to the New York Convention on Recognition and Enforcement of Arbitral Awards “This convention will be applied without prejudice to article 139 of Constitutional Code of Iran.” Article 139 states:  “the settlement, of claims relating to public and state property or the referral thereof to arbitration is in every case dependent on the approval of the Council of Ministers, and the Assembly must be informed of these matters. In cases where one party to the dispute is a foreigner, as well as in important cases that are purely domestic, the approval of the Assembly must also be obtained. Law will specify the important cases intended here.” This article states one of the controversial principles in the Constitution of Iran. Some scholars believe that this principle does not apply to States Companies so bringing a case before an arbitral tribunal by such companies is not in contract with that provision.

  • Conclusion: There are different kinds of international arbitral awards. Some of them are enforceable under New York Convention, and since Islamic Republic of Iran has ratified the Convention, they can be enforced in Iran provided that they have been granted in a contracting state and in relation to commercial disputes. Some other awards are enforceable under “Iran’s International Commercial Arbitration Act”. Other international arbitral awards that are not covered by NYC or ICAA can also be recognized and enforced by courts according to theories presented by well-known scholars.

Download Pdf : Arbitration in Iranian Legal System


 

Dadpooyan Hami’s attorneys have extensive experience representing parties during arbitration proceedings, as well as ensuring performance and enforcement of arbitral awards. Most of the times, clients require legal assistance before a dispute exists, or prior to initiating legal proceedings. Our services include helping them address certain pre-dispute considerations and counseling them prior to formulating and negotiating the arbitration process. The firm assists the clients in specific dispute resolution with using tools specifically adapted to their operation and business objectives, and help them anticipate legal and economic risks in an international context. Our attorneys will assist you to draft a dispute resolution clause, negotiate an arbitration agreement and will advise you on the consequences of including the dispute clause in their contracts.

Foreign Investment

Iran’s Stock Exchange Tehran Stock Exchange was established in 1968, and has been the primary equities market in Iran. In 2005, the new Capital Market Law of Iran approved by parliament and in 2006, according to this Act, TSE was demutualized and established as a joint stock company with over 6000 shareholders. TSE has enjoyed a reputation for having maintained an orderly market and a cost effective trading capability since its inception. The fully computerized trading system has helped boost the trading capacity and efficiency of the stock market. In 1994 electronic trading systems was launched. In 2007, TSE moved to the powerful trading system (powered by Atos Euronext) for meeting the high trading volume. TSE has been awarded quality system certificate of ISO9001; in 2009 and also planned to obtain ISO27001 certification for its IT Security Management System. TSE has implemented many reform measures in the past few years in order to bring it in line with international practice, and to better reflect investors’ diversified needs. TSE is set to continue making progress towards liberalization and internationalization. The Tehran Stock Exchange, with its fully automated trading systems and book entry mechanisms, is known as one of the most active exchanges in the Middle East region. At the end of June 201, the total market capitalization of the 342 companies listed on the Tehran Stock Exchange (TSE) amounted to US$105 billion. The ratio of total market capitalization to GDP was about 26 % in 2010. In this year, the total trading value was US$19 billion, representing a market turnover rate of 22.5%. The market P/E ratio of the Tehran market was 6.7, lowest among primary WFE1 exchanges, making it an attractive marketplace for investors. In order to enhance the core competitiveness of the Tehran Stock Exchange and to make faster progress towards liberalization and internationalization, the authorities have also promoted the introduction of new financial products, new financial institutions and implemented many reform measures, such as the listing of Single Stock Futures (SSF), relaxing limitations on foreign investment , streamlining foreign registration procedures, and adjusting various trading system and mechanisms so that they are more in line with international standards.

  • Tehran Stock Exchange

 As with several emerging stock markets, the Tehran Stock market historically set several limitations on foreign investment. With the growth of Iran’s stock market and development of the economy, the Stock market Authorities have gradually relaxed these limitations on foreign investors. Since April 2010, the process for investment by foreign investors in the stock markets has been changed from the ‘permit’ system to the ‘repatriation’ system. On 18th April 2010 Upon the recommendation of the Ministry of Economic Affairs and Finance, and by virtue of the paragraph 3 of article 4 of the Securities Market Law of I.R.I ratified in 2005, the Council of Ministers approved “The Regulations Governing the Foreign Investment in the Exchanges and OTC Markets” . This has consequently simplified the application procedures for foreign investment in the Tehran Stock Exchange. According to Article 7 of this “Regulations” the restrictions imposed on the possession of shares by the non-strategic foreign investors on every exchange or OTC market are set forth as follows: The number of shares owned by the total foreign investors shall not exceed twenty (20%) percent of the total shares number of the companies listed on the exchange or on the OTC market or twenty percent (20%) of the shares number of any company listed on the exchange or on the OTC market. The number of shares owned by each foreign investor in any companies listed on the exchange or on the OTC market shall not exceed ten percent (10%) of the shares number of such companies. Based on Article 4 the foreigners/ foreign entities shall have to submit the required information and documents to the Organization along with an application based on the forms prescribed by the Organization so as to obtain a license for trading in securities on every exchange or OTC market.

Foreign Investment

  • Buying and Selling Stocks

  1. a) Choose a stockbroker. In choosing a broker, you should check if that broker (person or corporation) is a member in good standing at the Tehran Stock Exchange. A complete listing of the TSE member-brokers can be found in various publications or from the TSE Membership Department. It is important that you trust your broker and that you are satisfied with the services it provides for you. Brokerage services include market reports, advice regarding the stock selection and timing of purchases and sales, trade executions, on time delivery of important documents – such as confirmation receipts – and other trading related activities that their clients may require.
  2. b) Open a brokerage account. Once the investor has chosen his brokerage firm, a brokerage account has to be opened. This account allows the client to perform stock transactions (buy and sell shares) any time – similar to a bank account which enables you to deposit, transfer and withdraw money. Opening a brokerage account is relatively easy to accomplish and takes no longer than opening a bank account. A specimen signature card needs to be filled out, containing the: name, address (professional and private), telephone number(s), and most importantly, the client’s signature. Frequently, bank and professional references have to be submitted. Once an account has been opened, the client may buy or sell immediately according to the trading instructions between the investor and broker. Trading instruction can vary depending on the investors’ objective – whether it is short term or long-term, minimum or maximum value of trades (trading limit), etc. All transactions are handled confidentially and the broker will not reveal to any person the details of any purchases or sales done for his client.
  3. c) Place your order with your broker. After opening the account, a trader will be assigned to the investor. A trader is a licensed salesman who is authorized to buy and sell securities at the TSE. The assigned trader will be your contact person for all the transactions. He/she will receive your order, most likely by telephone (unless arrangements are made), and will execute the order through the trading terminal connected to the main system of the Exchange. Thus, when placing an order to buy or sell, you have to call your trader and give the details of your order. The trader needs to know the following specifications: buy or sell order, which stock to buy or sell, the number of shares to buy or sell, and preferably also the bid price (when buying) or asked price (when selling).
  4. d) Settle your transaction. Buying and selling transactions are settled by book-entry. This means the ownership of shares and cash is transferred electronically to the brokerage account, without the stock certificates and cash being handed over physically. The account is credited when buying shares, and debited in the case of selling shares. Tehran Stock Exchange is launching the paperless or scriptless trading that result to eliminating the physical handover of stock certificates when buying or selling. The system replaces the scrip based system where stock certificates are handed over for transfer to the next owner. Instead, stock certificates are simply immobilized and kept in a safe place – Central Securities Depository of Iran, Inc. The book-entry system clearly advantages over the paper-based system. It has dramatically reduced paper work, facilitated the trading and eliminated the loss or forgery of shares. Currently the TSE settles trades on T+3, i.e., four days after the transaction date. Therefore, payments and/or securities must be delivered to your broker on trading day. Be sure to always verify the settlement deadline with your broker for future transactions.
  • Global Relationship

TSE is the full member of WFE (Since 1992) and also a member and one of the founders of FEAS (Sincec1995) and also a subscriber of International corporate governance network (ICGN). TSE also is an active participant of OIC Members’ Stock Exchange Forum.

* Issuance of Foreign Investment License

  1. Application Form;
  2. Establishment License / Primary agreement / Preliminary agreement of the pertinent Iranian organization;
  3. Official letter of the foreign investor to submit to the OIETAl;
  4. The foreign investors background including a brief history of the company, the year of establishment area of activities in case of foreign investor is a natural person, a photocopy of passport and resume will be provided;
  5. A list of machinery, equipments and CKD part which may be imported into the country as a part of the foreign investors capital (if available);
  6. In case that part of the foreign investor’s share is in the form of technical know –how, a draft of the contract outlining the conditions of the transfer of technology;
  7. Any further useful information;

The primary objective in this process is to find a suitable and “acceptable” local partner. If the contemplated foreign investment project complies with the plan already sanctioned, the Ministry of Economic Affairs and Finance may introduce to the potentially interested foreign investor, the local partners already holding an “agreement in principle” for taking part in such a project. A ministerial “agreement in principle” must be applied for jointly by both the foreign and the local potential investors. Details of the project are to be submitted to the Ministry of Economic Affairs and Finance as per a standard questionnaire, together with a feasibility study. Once the agreement in principle is issued, the parties should take the preliminary steps along with implementation of the project, such as importation of the machinery, equipment and setting up the required infrastructure. An “application for participation” is required to be filed by the foreign investor with OIETAI to the effect of participation in implementation of the sanctioned project. Then, the process is followed by a review of the application by the Supervisory Board for Attraction and Protection of Foreign Investment . The Foreign Department of Ministry of Economic Affairs and Finance, upon preliminary coordination with the Ministries concerned, shall prepare a comprehensive report for submission to the Supervisory Board to adopt the decision. If the project is deemed to be in the country’s overall interest, the Board conveys its favored decision through MEAF for approval and issues an Investment Decree. The Decree, once issued, is the formal permission for the investor to begin operation and to import the necessary capital which will be protected under the law.

Download Pdf : Foreign Investment Portfolio


Dadpooyan Hami International Law Firm with utilizing lawyers and legal advisors could codify and prepare types of your internal and international contracts in order to preventing disputes and diminishing claims in judicial and administrative authorities. You with utilizing professional lawyers and legal advisors could protect yourselves rights in contracts and in judicial authorities.

Corporate law framework

Foreign companies willing to operate in Iran have two main options. They can either register a company in Iran or establish a branch or representative office (Hereinafter Rep. office) of their own company. Each option offers a number of privileges. Thanks to recent changes in the laws and practices of company incorporation in Iran, it is possible for nationals of foreign countries to establish companies in Iran with 100 percent foreign capital. There is no need to have Iranian partners either. According to article one of Company Registration Act of Iran Commercial Code, ‘any company formed in Iran is an Iranian company’. This is true regardless of the nationality of partners. Therefore, a Iranian companies companies formed by foreign nationals could use all the incentives, facilities and possibilities available to Iranian companies. For example, an important advantage of incorporating a company in Iran for foreign nationals is   that it enables the company  to come in possession of immovable property.( Corporate law framework )

Corporate law framework

 In fact, according to the Iran Ownership of Immovable Property Law, foreign persons are not legally competent to possess any land. However, foreigners who become partners in an Iranian legal person can buy and possess land in the company’s name. It is also possible for such companies to rent immovable property for any span of time as long as it does not contradict the laws and regulations of the country. The two most popular company types in Iran are Limited liability companies and joint stock companies.

A limited Liability Company is a company formed between two or more natural persons for trade purposes without the capital being divided to shares. In this company type, the liability of each partner is strictly limited to the capital they have invested. The name of the company should not contain any of the partner’s names, otherwise that partner will have unlimited liability vis-à-vis third parties. The minimum number of  partners for this company type is two people, which differs from Joint Stock Companies. The other very commonly used Corporate law framework vehicle in Iran is Joint Stock Companies. This company type is characterized by division of capital into shares.  Joint Stock companies are divided into public and private joint stock. The distinction lies in the possibility of trading the shares publicly in public joint stock companies. The minimum number of shareholders in private joint stock companies is three, while public joint stock companies require a minimum of five shareholders who should all together provide at least one-fifth of the total capital.  In addition to incorporation of Iranian companies, foreign entities have the option of registering a branch or a Rep. Office in Iran. In order for foreign companies to be allowed to work in Iran through a branch or a Rep. Office, such companies need to be legally recognized in their country of origin. 

A single-article law, passed in the Iranian Parliament in   1997, allows companies legally registered in foreign  jurisdictions to register a branch/ representative in Iran. Such branches/ Rep. Offices can engage in the following activities:   

  1. Offering after sales services of foreign products/services.
  2. Operating contracts signed between Iranians and foreign companies.
  3. Conducting investigations and providing the pre-requisites for foreign investment in Iran.
  4. Cooperating with Iranian technical/engineering companies todo projects in other countries.        
  5. Increasing none-petroleum exports of Iran.
  6. Rendering technical/engineering services and transfer of technology.       
  7. Engaging in activities that have been authorized by legally competent authoritiesin Iran such as rendering services in transportation, insurance/ inspection of goods,banking, marketing and etc.

Management   of a branch or a Rep. Office   needs  to be done by one or more natural persons residing in Iran. A branch is a local unit of the foreign company directly responsible for conducting activities of the foreign company locally. The branch shall act in the name and with the responsibility of the company. In contrast, the representative, who could be a natural or legal person, shall act in its own name and responsibility. For branches, foreign companies desiring to register a branch in Iran need to submit some documents attached to their application to the office of Company Registration and Industrial Property. As for Rep. Offices, an Iranian legal or natural person must be introduced as a representative. Each company is allowed to have one official Rep. Office registered in Iran. The representative will, subject to the agency agreement, deliver parts of the duties of the foreign company in Iran. The Representative shall submit certified translation and original documents enclosed to an application to the office of Company Registration and Industrial Property.Rep. Office and branches that are not licensed to conduct transactions and exclusively deal with market research for their mother company and receive payments from mother companies to cover their costs are not taxed for such payments received from mother companies.

Download Pdf : Iran Corporate law framework for foreign investors


Dadpooyan Hami International Law Firm is a private and independent institution that registered in Tehran Registration Office for Companies and non-Commercial Institutions and its main center is Tehran. Our Firm with utilizing experiences of jurists, legal advisors, experts and illustrious precedents in the field of Companies and Registration Services, will present impartial and professional legal services.

Business

To start a business in Iran, foreign entities can approach the Iranian market in different ways. Incorporating a new company, registrating a branch office and registration of a representative office (agent office) are three different ways for foreign companies to do business in Iran.

  • Incorporation of a company in Iran

Following a directive issued on 2008, The Company Registration Office will now permit the registration of up to 100% foreign controlled companies in mainland Iran without the need for presenting a foreign investment license. Our firm can assist clients on establishing their company under Iranian commercial Law.

Along with assisting the clients to register their company in Iran, our lawyers also can help clients to draft the Articles of Association, to check the validity of minutes of General Managers of Founders and Board of Directors meetings and the shareholder meeting under the Iranian Commercial Law and to prepare all the required documents in order to register the company.

  • Registration of a branch or representative office

The Council of Ministers approved the Executive By-Laws of the Law Permitting Registration of Branches and Representative Offices of Foreign Companies under No.019776T/M/78-930 on May 2, 1999. According to Article 1 of these By-Laws, the companies that are considered as legal companies in their countries of origin i.e. have been formed on the basis of the laws and regulations of those countries and are legal entities, may set up their branches or representative offices in Iran, on the basis of the applicable laws and regulations, in order to carry out the businesses mentioned hereafter. There are other certain requirements applicable to the foreign entities seeking to register branches or representatives office in Iran:

  1. Companies shall be able to enjoy the same treatment (as a minimum) in your country regarding registering branches or representative offices.
  2. Representative agencies shall be managed / administered by persons permanently situated in Iran

Business

  • Field of activities for foreign company

  1. After sale services for goods or services of foreign company.
  2. Implementing of operational processes of agreements signed between Iranian and foreign companies.
  3. Study and to pave the ways for foreign investment in Iran.
  4. Cooperation with technical and engineering companies of Iran to carry out activities in country of third party.
  5. Enhancement of non- oil exports of Islamic Republic of Iran and transfer of know- how and technology.
  6. To carry out activities licensed by governmental institutions such as rendering services on transportation,
  7. Insurance and inspection of goods, banking, marketing and so on.
  • Branch office of a company

According to Article 2 of the Executive By-Laws of the Law Authorizing Registration of Branches and Representative Offices of Foreign Companies, a branch of a foreign company is a local (Iranian) wing of the original company that carries out the business and functions of the head office of the company in Iran directly through one or more principal representative(s).

  • Agents (Local) and Representatives

By “agent” of a foreign company, it is meant a natural person or a legal entity that, on the basis of an agency agreement, carries out some of the activities and functions of the principal company in Iran.

  • Procedure for establishing a branch or representative office

For the purpose of registering a branch or representative office in Iran, The required documents should be submitted at the Office for Registration of Companies and Industrial Property (ORCIP) in Tehran. The Persian translation of the documents are also required to be submitted to ORCIP. Copies of originals should be duly legalized by the nearest Iranian Consulate.  The labor law, taxation and social security regulations shall govern the branch and representative offices. Residency and work permits shall be issued for the foreign managers of the branch and representative office. Our firm will assist clients for establishing a branch or representative office in Iran as well as preparing the required documents in order to submit to ORCIP.

Dadpooyan Hami International Law Firm with utilizing lawyers and legal advisors could codify and prepare types of your internal and international contracts in order to preventing disputes and diminishing claims in judicial and administrative authorities. You with utilizing professional lawyers and legal advisors could protect yourselves rights in contracts and in judicial authorities.

Download Pdf : Doing Business in Iran

Joint Venture

An international joint venture is an agreement between two persons from different countries and consists of the creation or acquisition of a subsidiary joint common market of the foreign partner.

The creation of a joint venture involves sharing of specific unique skills, whether commercial (distribution network), technical (production, licenses,) or managerial, but also means financial and human resources from each partner in a common spirit of cooperation. They share the management, control, risks and profits associated with this common structure. Successful joint ventures involve real cooperation and total adherence to a common goal. These depend strongly on the characteristics of the respective partners. International joint venture is one of the significant form of FDI in Iran and globally expansion/development of the multinational companies. In Iran, joint venture partners can invest in all areas that are open to the private sector. In practice, one can see several joint venture companies in construction projects and in the railway, power generation, transport, tourism, and automotive industries.

Joint Venture

A joint venture company registered in Iran is regarded as an Iranian company and is subject to Iranian law, even if its majority of shares belong to a foreign partner. Therefore, Iranian laws and regulations normally govern the legal relationship between parties. Iranian investment laws are mainly reflected in the Foreign Investment Promotion and Protection Act, the Third Five-Year Economic, Social, and Cultural Development Plan, the Forth Five-Year Economic, Social, and Cultural Development Plan, the Fifth Five-Year Economic, Social, and Cultural Development Plan, the Law on the Administration of Special Economic Zones, and the Law on the Administration of Free Trade-Industrial Zones. In addition to investment laws, foreign joint venture partners should be familiar with Iran’s general business laws, such as the Code of Commerce, Tax Code, Export and Import Regulations, Labor Law, and Law for Registration of Patent and Trade Marks.

The parties can opt for a contractual JV. If this is the case, their relationship will be construed as a voluntary partnership under Article 573 of the Iranian Civil Code. The parties to a contractual JV can regulate all aspects of the JV in detail in their contract.
The parties may also decide to use a corporate form existing under the Iranian Commercial Code, such as a:

  • Joint stock company (JSC).
  • Limited liability company (LLC).
  • Limited partnership.
  • General partnership.

 The most recommended corporate structures for the establishment of JVs in Iran are JSCs and LLCs.

Dadpooyan Hami International Law Firm with utilizing lawyers and legal advisors could codify and prepare types of your internal and international contracts in order to preventing disputes and diminishing claims in judicial and administrative authorities. You with utilizing professional lawyers and legal advisors could protect yourselves rights in contracts and in judicial authorities.

 Download Pdf : International Joint Venture