Industry Ministry approves 11b of foreign investment

Industry Ministry approves $11b of foreign investment

TEHRAN – Iranian Industry, Mining and Trade Ministry has issued licenses for more than $11 billion in foreign investment projects so far, though actual capital inflows remain far lower, an official at the country’s investment authority said.

Majid Almasi, director general for foreign investment at the Organization for Investment, Economic and Technical Assistance of Iran, said licenses worth $10 billion to $11 billion have been approved with authorization from the economy minister.

However, the capital that has actually entered the economy and been formally registered – including machinery and technical know-how – amounted to about $1.2 billion in the Iranian year 1403, he said, adding that inflows are expected to rise this year.

Almasi said around $1 billion has already been registered this year, with investment coming not only from neighboring countries but also from more distant markets, including Africa.

Capital brought in by Iranians living abroad is also counted as foreign investment because the funds originate outside the country, he added.

He said bank deposits by foreigners do not qualify as foreign investment, despite bringing in foreign currency.

To benefit from Iran’s decades-old law on foreign investment protection – which covers political risk and guarantees capital repatriation – investors must obtain approval from the Foreign Investment Board and the investment organization.

Foreign investors have shown interest across a wide range of sectors, from small projects of around $500,000 such as hotel construction to large-scale ventures in petrochemical value chains, equipment imports and technology transfer, Almasi said.

Investment models include joint ventures, buy-back contracts and build-operate-transfer schemes, depending on the sector, project structure and expected returns, he added.

Almasi said Iran offers competitive advantages including tax incentives, legal protections for investors and customs exemptions for imported equipment. He noted that once investment-related imports are registered, investors do not require domestic foreign exchange allocation because their funding source is external.

Iran’s economic ecosystem can deliver strong returns, he said, citing companies such as mobile operator Irancell, ride-hailing firm Snapp and Razi Petrochemical as examples of successful foreign-backed ventures.

Foreign investment, he added, is not limited to cash inflows but also includes the entry of advanced machinery and equipment, noting that many foreign-branded vehicles assembled in Iran operate under foreign investment licenses.

EF/MA

source: tehrantimes.com