The following is a simplified version of the Act on Attraction and Protection of Foreign Investment:

Chapter one, definitions

Article 1- The terms used in this Act have the following meanings:
Act: The present act on foreign investment. Foreign investor: Real or legal persons who invest in Iran, capital of foreign origin Foreign capital: Any capital of any kind, in cash or kind, imported into Iran by the foreign investor, including cash imported to Iran through the banking system or any other channel acceptable to the Central Bank, machinery and equipment, tools and spare parts etc, intellectual property rights with respect to technical
knowledge, trade names and logos, and dividends on capitals, as well as other assets. Foreign investment: Employment of foreign capital in a new or an existing economic entity under the relevant permit Investment permit: Permit issued for each case of investment according to Article 6 this Act Organization: Organization for Investment and Technical Supports subject of Article 5 of the Act on Formation of the Ministry for Economic and Technical Affairs High Council: High Council for Investment subject of Article 7 of the Act on the Articles of
Association of the Organization Committee: Committee for Foreign Investment subject of Article 6 of the present Act.

Chapter two, general conditions on acceptance of foreign investment

Article 2- The acceptance of foreign investment shall be in compliance with the present Act and other relevant laws and regulations, and aimed to develop the county’s economy, industry, mining, agriculture, and services provided the investment:
a) Shall enhance the country’s economy, technical know-how, quality standards of its products, and will expand exports and provide jobs
b) Will not threaten national security, national interests, environmental features, and domestically produced goods through domestic investment
c) Will not involve any concessions to be given by the (Iranian) government to the investor(s) such as to put them in a position of advantage in relation to domestic investors
d) The value of the total products and services contributed by foreign investment shall not exceed 25% of the total value of products or services of that sector, nor 35% of the total of the field in question. The fields and the ceilings on investment in each shall be in accordance with the relevant by-laws that will be drawn up by the Board of Ministers.
Foreign investment in providing products or services for exports only, shall be exempted from these restrictions, except in case of crude oil exports.
Note: The Act on Ownership of Immovable Properties 1921, remains in force and bars non- Iranians from owning land of any kind in Iran.

Article 3- Foreign investment made according to this Act shall be protected and supported by the government. Such investments can be divided into two categories:
a) foreign direct investment (FDI) in the areas open to the private sector, and
b) civil partnership, buy-back, and build-operatetransact agreements that do not require guarantees from the government or the banking system.
Note 1: In case of buildoperate- transact agreements, the investor has the right of ownership of his outstanding
dues till all has been settled, both the original capital and the profits.
Note 2: In case of investments according to 3 above, should at any time the government decide to cancel or suspend a project, the investor shall be entitled to all the outstanding dues to the latest matured payment.

Article 4- Joint investment by the Iranian government with other states requires a decision from the Majlis (Iranian parliament). However, statecontrolled foreign companies shall be in any case considered as private sector entities.

Chapter three, competent authorities

Article 5- The Organization is the only body officially competent to see to matters concerning foreign investment, demands and applications for such investment etc.
Article 6- To see to the affairs referred to in Article 5 above, a Committee known as the Committee for Foreign
Investment shall be formed comprising the Deputy Minister for Finance and Economic Affairs as the Chairman of the Committee, the Head of the Organization, Deputy Minister for Foreign Affairs, Deputy President of Management and Planning Organization, and Deputy President of the Central Bank of Iran, as permanent
members. Furthermore, as and when the need arises Deputies from other relevant ministries shall participate in the Committee sessions. Applications for foreign investment to be made in Iran, if approved by the Committee shall be confirmed by the Ministry for Finance and Economic Affairs.
Note: The Organization is obliged to have the Committee review any application submitted to the Organization
within 15 days from the day of submission, and the Committee must reach a justifiable verdict within one month from the date of the first review.
Article 7- In order to facilitate and expedite foreign investment, all the entities concerned must assign representatives, each entity one person, as the liaison officers. These entities include the Ministry for Finance
and Economic Affairs, the Foreign Ministry, Ministry of Commerce, the Central Bank, Iranian Customs, General
Department for the Registration of Companies and Industrial Ownerships, Environmental Protection Organization etc.

Chapter four, guarantees and transfer of foreign capital

Article 8- Foreign investments shall benefit from all the support and benefits that are granted to local investments.
Article 9- Foreign investments shall not be confiscated nor nationalized unless national interests make it necessary, in which case full reparations shall be made.
Note 1: Demand for reparations must be made within maximum one year from the date of confiscation or nationalization.
Note 2: Disputes arising in this respect shall be resolved according to Article 19 of this Act.
Article 10- The foreign investor may transfer a part or all of his interests to an Iranian entity, or with the confirmation of the Ministry of Economy and Financial Affairs, to another foreign investor who has at least the same conditions for investment as did the original investor.

Chapter five, regulations on acceptance and entry and exit of capital

Article 11- Foreign investment can enter the country under the present Act in one of the following forms:
a) cash payments that can be exchanged into rials
b) cash payments that are not exchanged into rials butare used for purchasing and ordering facilities
c) non-cash items after appraisal by the relevant authorities.
Note: Evaluations and registration of the capital shall be performed in accordance with the relevant by-laws.
Article 12- The exchange rates applicable shall be those of the day of transfer.
Article 13- Whatever remains of the initial capital and interests must be declared three months prior to its exit from the country.
Article 14- The profits on the capital may be transferred abroad after the payment of the relevant taxes and charges and the confirmation of the Committee.
Article 15- Payments concerning installments of the actual capital transferred to Iran, contracts on rights regarding technological know-how and other intellectual rights shall be in accordance with the regulations of the Committee and with the confirmation of the Ministry of Finance and Economic Affairs.
Article 16 - Transfers outlined in Articles 13, 14 and 15 shall be subject to Article 3 of this Act.
Article 17- For transfer of exchange abroad, the following means are available:
a) purchase of exchange through the banking system
b) through exchange earned from export of products or services
c) export of goods according to regulations.
Article 18 - The transfer abroad of that part of the foreign capital that has entered the country but has not been used for any investment purposes is exempted from the present regulations.

Chapter six, settlement of disputes

Article 19- Should a dispute arise between the (Iranian) government and a foreign investor, it shall be settled in
Iranian courts unless otherwise agreed upon between the governments of the two countries.

Chapter seven, final regulations

Article 20- The relevant authorities are obliged to take immediate action with respect to issuance of visas, work permits etc for the managers and experts and other employees of the foreign investing entity as demanded by the Organization.
Article 21- The Organization is obliged to put all the information and regulations concerning foreign investment at the disposal of the public at all levels.
Article 22- All the ministries and public organizations or companies concerned, are obliged to put all the relevant information concerning foreign investment and investors at the disposal of the Organization to facilitate its decision-makings.
Article 23- The Minister for Finance and Economic Affairs is required to submit a report, every six months, on the subject of foreign investment to the parliament.
Article 24- As from the date of this Act, it replaces previous regulations on foreign investment and all previous
investments shall come under the present Act.
Article 25- The executive by-laws and regulations of the present Act shall be drawn up by the Ministry of Finance and Economic Affairs within two months from this date.