Foreign Investment Incentives

foreign investment incentives

 

    Considering the multitude of international investment, it is only natural for countries to offer foreign investment incentives that enable them to attract investors into their borders, and Iran is no exception. Iran’s strategic position allows it to introduce free Trade Zones (FTZs) across the country (https://www.freezones.ir/en/Infographics). There are currently 15 free zones across Iran, with seven being new ones added to the previous existing zones. In order to promote and protect foreign investment, the country has introduced certain laws applicable to foreign investments made within the FTZs.

 

Incentives within the FTZ

    The Foreign Investment Promotion and Protection Act (FIPPA) aims to offer foreign investment incentives to those who are interested in doing business in Iran FTZs. According to FIPPA, foreign investors are allows to make investment without limitations to the proportion. Requests of Investment are received by the organization of the same zone, which is responsible for the issuance of the investment license. Foreign nationals do not require a visa to enter FTZs. A resistance permit from two weeks up to six months can be obtained upon authority agreement.

    Investment can be made in the form of cash or non-cash, however, non-cash capital needs to undergo valuation before the issuance of the license. Foreign Direct Investment (FDI) is also possible within areas where private sector is allowed to invest, without any limitations with regards to foreign investment proportion. In addition, investors are permitted to transfer the principal capital as well as the profit made from the investment outside the free zone.

 

Tax and Tariff Exemption

    Another foreign investment incentive involves tax exemption. The FIPPA states that foreign investment is exempt from paying direct taxes on both income and assets for 20 years. Additionally, such investments are subject to Value Added Tax (VAT) exemption within the free zone. Commodities and services within the zone are exempt from VAT as well as export of goods abroad. Imports, however, are subject to VAT regulations. In addition to tax exemption, foreign investors are exempt from paying customs tariffs for production line equipment and machinery imported to the zone.

 

Conclusion

    Foreign investment incentives enable countries to attract investors from around the world. Iran offers incentives within its 15 FTZs located across the country. Incentives include ease of legal investment procedures to tax and tariff exemption and more as stated in the FIPPA.

 
Speaking Practice

    Do a research on the foreign investment incentives your country offers. Elaborate on the incentives in an audio recording. (4 min)

 
Presentation

    Prepare and record (video recording) a presentation introducing your country’s free trade zones and the incentives they offer to foreign investors. (5 min)

 

Source

https://www.freezones.ir/en/Incentives

https://www.freezones.ir/DesktopModules/Bring2mind/DMX/Download.aspx?Command=Core_Download&EntryId=15&language=fa-IR&PortalId=0&TabId=97

 

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Global Investment

Iran’s Economy

International Trade

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