Free Trade - Industrial Zones

During last decade, Iran strived hard to promote investment, technology transfer and job creation through, among others, introduction of a new Investment Law, more than twenty Special Economic Zones and three Free Zones. Two out of three free zones namely Kish (90 Km2) and Qeshm (1300 Km2) are Islands like Batam, located on a strategic water way: Persian Gulf. The third one, Chabahar (154 Km2) is also in the southern borders of the country on the shores of Oman Sea. Joint venture with no limits on investment and share holding, flexible employment regulations, 15 years of tax exemption, 100% repatriation of capital and profit, tax & duty-free export-import, cheap energy and manpower resources, no visa requirement are among the privileges of investment in the Free Zones.

As reflected in its preface, the Law on the manner of Administration of the Free Trade-industrial Zones was passed for the express purpose of facilitating comprehensive, sustainable social and economic development. The legislation foresees the accomplishment of infrastructural requirements, boosting social development and generally promoting qualitative and quantitative economic growth. The law encourages foreign and domestic investment; International banking participation; high technology industrialization and promotes an active presence for the Free Zones in global and regional markets. The three Free Trade-Industrial Zones are the islands of Kish and Qeshm in the Persian Gulf and Port chahbahar on the southern border of the Islamic Republic of Iran.

Comparison Table

Comparison table indicating legal status on economic activities in Iran's Free Trade-Industrial Zones and Special Economic Zones

 
No.
Descriptions
Free Trade-Industrial Zone
Special Economic Zones
1
Import of goods from abroad
Free from all kinds of taxes  and duties, but local levies and fees are collected according to the services rendered by the executive departments 
Free from all kinds of taxes  and duties, but local levies and fees are collected according to the services rendered by the executive departments 
2
Re-export abroad of imported goods to the zone
Free from all kinds of taxes  and duties 
Free from all kinds of taxes  and duties 
3
Goods, semi finished parts, raw materials from mainland  to the Zone 
If exported, subject to General Exports –imports regulations in the mainland 
If exported, subject to General Exports –imports regulations in the mainland
4
Import of  goods from abroad to mainland 
Subject to the General Exports-Imports regulations in the mainland 
Subject to the General Exports-Imports regulations in the mainland
5
Goods made in the Zones, but permissible to the mainland 
To the extent of value added caused by utilization of domestic production factors
To the extent of value added caused by utilization of domestic production factors
6
Unloading, loading , transit and Transshipment of merchandises abroad
Free from all kinds of taxes and duties, only warehousing and local charges shall be collected 
Free from all kinds of taxes and duties, only warehousing and local charges shall be collected
7
Registration of company, intellectual ownership, trademarks brands, patents, etc.
Governed by the relevant regulations enforced in the Free Zone
Governed by the relevant regulations enforced in the mainland
8
Utilization of land
Sold and/or leased to the Iranian nationals, but only leased to the foreigners
Sold and/or leased to the Iranian nationals, but only leased to the foreigners
9
Exchange rates
Free market exchange rates
Domestic Banking exchange rates
10
Certificate of Origin
Issued by the Zone Authority
Issued by the Zone Authority
11
Retail sell
Allowed
Not allowed
12
Offshore banking operation by private sector
Recently approved and permitted by law
Only domestic banking operation by the state banks
13
Insurance activities by private sector
Recently approved and permitted by law
State insurance companies render  their services
14
Foreign capital investment
Accepted and protected
Accepted and protected
15
Guaranteeing of foreign investments against nationalization and confiscation
A)  shall be guaranteed by the Zone Authority, if up to millions US$
Governed by the “Law on the attraction  and protection of foreign investments”
16
Ratio of foreign capital investments
Up to 100% of shareholding
Up to 100% of shareholding
17
Recruitment of foreign workforce
Up to 10% of the manpower engaged in the undertaking
Governed by alien’s employment regulations enforced in the mainland
18
Entry to the Zones
No entry visa needed to entry into the Zone. visa shall be issued at entrance
Prior entry visa required. Applications shall be accepted, confirmed, and passed to the Foreign Ministry.
19
Social security, social insurance
Fund to be set up in future. Now the mainland social security regulations is enforced
The mainland social security regulations enforced
20
Labor law, labor conditions, industrial relations
Governed by the regulations of employment of manpower, insurance and social security enforced in the Zones
Governed by labor law and regulations enforce in the mainland
 
     
 
     
   
Which rules govern the economic activities in the Free Zones ?  
  The provision of the law on the manner of Administration of the Free Trade-industrial Zones and the relevant decrees of the Council of Ministers are the primary legal sources for regulating economic activities and enterprises in the Free Zones.  
     
   

Is there any independent authority for administering the Zones ?		  
  Yes there is. Each Free Zone is administered by its own Authority and is administered by its own Authority and is organized as a company, with an autonomous legal status. The company's capital belongs to the government of the Islamic Republic of Iran. Issuance of permits for all manner of authorized economic activities, construction of buildings and installation and undertaking various occupations by natural and legal persons, within the boundaries of a Free Zone, rests solely with the respective authority . The Authorities are empowered to implement all regulations pertaining to the establishment of production units, importation and exportation of goods, employment of manpower, social security and insurance, issuance of entry visas to foreign nationals, and the like.  
     
   
What are the conditions for buying and leasing properties in the Free Zones ?  
   The utilization of land and national resources belonging to the government within the Free Zones and the sale or lease of properties to Iranian nationals, whether natural persons or companies, are determined by each Authority according to the respective regulations. As for private ownership of Iranian nationals residing in the Free Zones, they shall enjoy the same rights of ownership of land and properties that prevail in the rest of the country . Renting of land to foreign nationals is permitted . However, the sale of land to foreigners or to companies whose capital is wholly partially owned by foreigners, is prohibited .  
     
   
Are there any special advantages foreseen in the rules for investors in the Zones ?  
  All natural and legal persons and institutions, Whether Iranian or foreign, as well as international organizations, may either independently or jointly with each Authority and their affiliated companies, or Jointly with each other, invest in the Zone. Foreign investors may participate in the economic activities of the Free Zone in any investment ratio they wish to. The legal rights of foreign investors are guaranteed and protected. Fair compensation for damages shall be abided by the Authority, in cases where the capital of foreign investors is nationalized or expropriated. Foreign investors also have the option to safeguard their capital and rights by operating under the provisions of the Law Concerning the Attraction and Protection of Foreign Investment passed in 1955 (See foreign investment booklet also in this series). Repatriation from the Free Zone of net profits, the initial capital and gains resulting from economic activities of foreign investment is permitted. The authority of each Free Zone is obliged to issue a permit of transfer within one week from the date of the receipt of an application for such repatriation. Investors may transfer their shares to other investors with the approval of the respective Authority . In principle, the movement of capital and expatriation of profits generated by economic activities and commercial operations in the Free zone is free and permitted, without let or hindrance.  
     
   
What things are considered capital under the rules of the Free Zones ?  
  As defined in Article 3 of the Regulations on investment in the Free Zones, capital shall include: The national currency, i.e., the Rial and foreign currencies convertible in the Free Zones; machinery, equipment , accessories and tools of work; industrial property rights resulting from patents, technical know-how, trademarks and commercial names; land, air and sea transport vehicles related to the subject of investment; all or part of the transferable net profit obtained in the Free Zones and added to the principal capital or utilized in other activities authorized under the rules of the Free Zones . In certain cases, at the discretion of the Free Zone Authority, raw materials and semi-manufactured parts may be designated as a portion of the foreign investment.  
     
   
In the Free Zones, how are disputes between the foreign investor and the Iranian partner of the Joint-venture settled ?  
  Such disputes are resolved on the basis of written contracts and agreements concluded between the parties concerned. The resolution of differences can be achieved by means such as conciliation and arbitration or court litigation.  
     
   
How is the registration of Companies and intellectual properties accomplished ?  
 

Registration of companies, institutions and branches of Iranian or foreign companies shall be established in the Free Zone, upon submission of the required documentation. The registration Bureau of the Zone shall also handle the applications for registration of trademarks and names, patents, and industrial designs.

 
     
   
Are export and import activities completely unrestricted in the Zones ?  
  The exchange of goods between each Zone and outside the country is excluded from the provisions of the Export-import Regulations. However, exchange of goods between the Zone and the rest of the country, whether of a commercial nature or by travelers, is governed by the general national regulations on the export and import of goods. Importation of goods produced in the Free Zones, into other parts of the country, is exempt from payment or all or a part of customs duties and commercial benefit tax, equal to the added value thereof in the Zone. Importation of goods produced in the Free Zone in which all or parts of their raw materials are supplied domestically, shall be exempt wholly or partially from payment of customs duties and commercial benefit tax, in proportion to the domestic raw materials component ot the product.  
     
   
And the taxes ?  
  Natural and legal persons, whether Iranian or foreign nationals, who are engaged in any kind of commercial or manufacturing activities in the Free Zones, are exempt from payment of tax on their revenues and assets for fifteen years, as from the date their business operation commences .  
     
   
Do foreigners need visas for entering the Free Zones?  
 

For direct entry into and exit from each Free Zone through authorized points, foreign nationals are not required to obtain visas in advance The police shall affix the seal of a residence permit on the valid travel documents of such foreign citizens. The respective residence permit is issued for a period of two weeks and may be extended up to six months upon the request made by the Authority. For entry into the Free Zones through the mainland of Iran, foreign nationals are obliged to obtain a visa from the Iranian consulates abroad. Foreigners who wish to travel to other parts of the country after their entry into the Zone, are required to obtain a permit from the local representative office of the Iranian foreign Ministry .

  
     
   
Are all types of banks allowed to operate in the Free Zones ?  
  Banking in Iran is the sole domain of the government. However, establishment of Iranian banks with a minimum of 51% government participation, organizing branches of foreign banks, establishment of Iranian or foreign non-banking credit institutions, or setting up their branches in the Free Zones are permitted. The banks can be engaged in operation like opening letters of credit and rendering similar services to businesspersons. Offshore activities are also allowed for the banks, if they use foreign currencies. Foreign exchange dealers may operate in the Zone upon the authorization of the Authority. Buying and selling of foreign currencies by banks and exchange dealers is based on the supply and demand factor and the floating rate of the free market.  
     
   
What about employment and Social Security in the Free Zones ?  
  Provisions regarding labor and social security regulations are more flexible in the Free Zones, in comparison with the rules prevailing on the mainland, Employment may be based on a contract according to the mutual agreement of the employer and employee, with the right of cancellation of the work contract applicable for both parties. In this context, the employer is allowed to lay off workers after payment of due compensation  
     
 


Kish Free Zone

Authority : Kish Free Zone Organization
Tehran office : No.3, Kish Alley, Haghani Intersection, Africa Expressway,Tehran 15188, I.R IRAN
Tel.: (021) 8777085, (021) 8777086 ,Fax.: (021) 8882314
Local Office : Tel.: (076444) 221412,22675,22841,Fax.:(076444) 22683, (076444) 23594, (076444) 22581

WebSites:
Kish Free Zone (www.kishfreezone.org) ,
Kish free Zone (www.kfzo.org) ,
Kish Free Zone(www.kfzo.com) ,
CyberKish (www.cyberkish.com),
Kish Health (www.kishhealth.info) ,
Kish University (www.kishuniv.com) ,
Kish Trading Union League (www.kishtul.com)


Qeshm Free Zone

Authority : Qeshm Free Zone Organization
Tehran Office : No.25, Shahid Mirza Hassani Alley, Ghaem Magham Farahani Ave.,Tehran 15867, I.R.IRAN
Tel.: (021) 8721859 ,(021) 8724870, (021) 8724871,(021) 8724872,Fax.: (021) 8724874
Local Office : Tel.: (0763) 5225930-39,5224120, 5227844 ,Fax.: (0763) 5225338, 5224093

Websites:
Qeshm Free Zone (www.qeshm.org www.qfzo.net)


Chabahar Free Zone

Authority : Chabahar Free Zone Organization
Tehran Office :No.15, Sattari Blvd., Africa Expressway, Tehran 19689,I.R.IRAN
Tel.: (021) 8796768, (021) 8796780,Fax.: (021) 8782903
Local Office : Tel.: (0545444) 21445-7 , Fax.: (0545444) 2237

WebSite:
Chabahar Free zone (www.chabaharfz.com)
University of Chabahar (www.iuc.ac.ir)

  
     
  Iran's Special Economic Zones   
     
  Intoduction Iran's special economic Zones
Website: irsez.net		  
     
 

.SIRJAN SPECIAL ECONOMIC ZONE
Authority: Kerman Development Organization
Head office: No. 413 Sattarkhan Ave., Tehran 14547 Iran.
Tel.: (021) 8207043-5
Fax: (021) 8204893
Local office:
Surface area: 1700 ha
Website: Sirjan Special Econimic Zone
E.Mail: info@sirjan.net

.SARAKHS SPECIAL ECONOMIC ZONE
Authority: Astan-e Ghods Razavi
Head office: No. 32, Shahid Montazeri Blvd., Mash'had, Iran
Tel.: (0511) 7615065-6 Fax: (0511) 7615067
Tehran office: No. 14, Khalid Eslamboli Ave., Tehran 15116 Iran.
Tel.: (021) 8725780-3,
Fax: (021) 8725786
Surface area: 5200 ha
E.Mail: SARSZON@IMAMREZA.OR.IR

3- BANDAR-E- ANZALI SPECIAL ECONOMIC ZONE (first location)
Authority: Gilan Investment Development Co.,
Head office: 5th floor, Takhvar Bldg., Hafez Ave., Rasht, Iran.
Tel.: (0131 ) 34093-33892
Fax: (0131) 31673
surface area: 140 ha

4- BANDAR-E- ANZALI SPECIAL ECONOMIC ZONE (second location)
Authority: Ports and Shipping Organization
Head office: Ports and Shipping General Directorate ,
Bandar Anzali, 43154 Iran.
Tel.:(0181)34505-7
Fax: (0181) 34802
surface area: 30 ha

5- KHUZISTAN SPECIAL ECONOMIC ZONE
Authority: T.F.O.K. Co.,
Head office: No. 28, 17 th street, Kianpars, Ahwaz 61558-76465 Iran.
Tel.: (061) 368648,(061)335390
Fax: (061)368649
surface area: 2000 ha

6- SALAFCHEGAN SPECIAL ECONOMIC ZONE
Authority: Tossa'e va Omrani Qum Co.,
Head office:Qum General Government House, Qum 37185 Iran.
Tel.:(0251) 713804
Fax: (0251) 713944
surface area: 2000 ha
E.Mail: info@qssez.com

7- KHORRAMSHAHR SPECIAL ECONOMIC ZONE
Authority: Ports and Shipping Organization
Head office:Ports and Shipping General Directorate, Khorramshahr, Iran.
Surface area: 230 h
Website: www.khorramshahrport.com

8- JOLFA SPECIAL ECONOMIC ZONE
Authority: Jolfa Development Company, Vanak Bldg ,Abrasan cross roads, Tabriz, Iran.
Tel.:(0411)3361401-2
Fax: (0411)3361403
Surface area: 1035 hec. including 135 hec. (1st phase) and 900 hec. (2nd phase)
Website: Jolfasez Special Economic Zone
E.Mail: JOLFASEZ@YAHOO.COM

9- ARG-E-JADID SPECIAL ECONOMIC ZONE
Authority: Arg Development Co.,
Head office: No. 296, Ostad Motahhari Ave., Tehran, 15886, Iran.
Tel.: (021) 8842910-11
Fax: (021) 8862612
Surface area: 2000 ha
E.Mail: atc@neda.net

10- PETROCHEMCAL SPECIAL ECONOMIC ZONE
Authority: National Petrochemical Industries Company Organization
Head office: 406, Motahhari Ave., Tehran 15958 Iran.
Tel.: (021) 8800851-4
Fax: (021) 8800 857
Surface area: 1770 ha
E.Mail: PSEZ@NIPC.NET

11- BANDAR BUSHEHR SPECIAL ECONOMIC ZONE
Authority: Ports and Shipping Organization,
Head office: Ports and Shipping General Directorate, Bushehr, Iran.
Tel.:(0771)28051-5,-22051-7
Fax: (0771)24668
Surface area: 41 ha
E.Mail: BUSHEHR-DEVELOPMENT-CO@YAHOO.COM

12- BUSHEHR SPECIAL ECONOMIC ZONE
Authority: Bushehr Development Co.
Head office: 3rd Floor, Sharifpoor building, Dehghan Blvd., Bushehr, Iran.
Tel: (0771) 27796-27243
Fax: (0771) 27243
Tehran Office: 11th Floor, No. 11, 2nd blind alley, Shahid Gomnaam , Tehran, Iran
Surface area: 2034 ha

13- BANDAR AMIRABAD BEHSHAHR SPECIAL ECONOMIC ZONE
Authority: Ports and Shipping Organization
Tehran temporary liaison office:
Tel.: (021) 8809315-9, Fax (021) 8809319
Local office: Ports and Shipping General Directorate of Mazanderan Province,
Tel.: (0191) 35917
Fax: (0191) 33030
Surface area: 60 ha

14- BANDAR SHAHID RAJA'EE SPECIAL ECONOMIC ZONE
Authority: Ports and Shipping Organization
Head office:
Tel.: (0761) 564015-7(0761) 564035-7
Fax: (0761)564063
Surface area: 20 sq. km, including 200 ha allotted to Qeshm Free trade -Indus.Zone

15- MINES AND METALS SPECIAL ECONOMIC ZONE
Authority: National Iranian Steel Company (NISCO)
Head office: no. 21, Assadabadi Street, Tehran 14336 Iran.
Tel.: (021) 8712537,(021)8712734
Fax: (021)8724819
Surface area: 1200 ha
Website: Mines and Metals Special Economic Zone
Email: MMSEZII@ACCIR.COM

16- PARS SPECIAL ECONOMIC ENERGY ZONE
Authority: Pars Special Economic Energy Zone Company
Head office: No. 123, Gharani Ave., Tehran, 15837, Iran
Tel.: (021)2005900
Fax: (021)2001880, 2031152
Surface area: 10000 ha.
Website: Pars Special Economic Energy Zone
Email: INFO@PSEEZ.COM

17-SANG-e-LORESTAN SPECIAL ECONOMIC ZONE
Authority: Industrial Towns Company
Tehran Office Address: No. 6. 7th Street, Khaled Eslamboli Ave., Tehran.
Tel.: (021) 8729248-51
Fax: (021) 8719938

18- SHIRAZ ELECTRIC AND ELECTRONICS SPECIAL ECONOMIC ZONE
Authority: Fars Industries and exports promotion co.
Headquarters: P. O. Box 71345-1445 Shiraz, Iran.
Tel.: (0711) 2273820-23
Fax: (0711) 2273826
Website: Shiraz Electric and Electronics Special Economic Zone
Email: seez@seez.ir

19- YAZD TEXTILE INDUSTRIES SPECIAL ECONOMIC ZONE
Authority: Yazd Industrial Parks Co.
Head office: No. 56 , Sonbol Street, Aboozar Place, Safa'ieh Yazd ,Iran.
Phone: 0098 351 8244941-3
Fax: 0098 351 8244940

20- PERSIAN GULF SHIP BUILDING SPECIAL ECONOMIC ZONE
Authority: Persian Gulf Ship Building Complex Co.
Head office:No.10, Mahestan Str., Shahrak-e-ghods, Tehran 14685 Iran
P. O. Box 15815 3336,
Phone: 0098 21 8089900-15,
Fax: 0098 21 808 5511
e-mail: info@isoico.com
web site: www.isoico.com
Local Office: km 37, Bandar abbas road
Phone: 0098 763222 3208 -12, Fax: 0098 763222 3220
WebSite: Persian Gulf Ship Building Special Economic Zone

21- PAYAM SPECIAL ECONOMIC ZONE
Authority: Payam Aviation services Co.
Tehran office: No. 3, Toopchi Street, Shariati Ave., Tehran ,Iran
Phone: 0098 21 876 3045-9,
Fax: 0098 21 864900, 0098 21 8113650

  
     
 

Jl. HOS Cokroaminoto 110, Menteng, Jakarta 10310
Phone : +62-21-31931378, 31931391, Fax : +62-21-3107860
E-mail : irembjkt@indo.net.id