An Introduction to Iran
This section contains helpful information for companies wishing to start or recommence trading with Iran post lifting of the sanctions. Since signing the nuclear deal in 2015, Iran’s government has made significant attempts to attract investment into the country and offers Western business large market opportunities.
The country has already attracted significant investment in a range of sectors, including infrastructure, utilities, hospitality, oil and gas.
Why Iran is a Good Prospect for Trade.
Iran is one of the fastest growing economies in the Middle East, and with the end of its international isolation, companies now have the opportunity to trade with the largest market to re-enter the global economy in many years. Iran has the second largest economy in the MENA Region after Saudi Arabia, with an estimated nominal GDP of 438$ billion in 2017, and the second largest population of the region after Egypt. Also, based on PPP (purchasing power parity), Iran has the 18th largest economy in the world.
With a total population of 80 million, over half of which are under the age of 30, it is an educated, urbanized and tech-savvy population. Iran has a literacy rate of over %95, over one million university students, and over 600,000 university graduates annually. This constitutes a huge, brand conscious consumer market located in a geo-strategic location. Also, Iran has some of the largest oil and gas reserves in the world and presents a vast range of business opportunities in virtually all sectors of its diversified economy. What is more, Iran contains a number of Free Trade Zones, some of which offer tax advantages for international companies.
The country has much economic potential, and the government of Iran is ready for renewed investment and more trade. As the momentum for companies to enter Iran accelerates, it is very important for companies to establish links and connections with Iran.
Iran is currently buzzing with international companies competing for a share in the market and companies can take a share of the market also. Iranian companies are keen to work with their counterparts, valuing their quality and reliability. Iran has a thriving entrepreneurial culture, stimulated by new startups and tech companies which provide alternatives to their Western counterparts who are not able to operate in Iran due to the banking restrictions.
Iran›s economy is set to grow exponentially; McKinsey Global Institute estimates that it could be a one-trillion-dollar economy by 20351. Foreign investors are set to play a key role in this, providing international expertise, and investments in the infrastructure and in financial systems, which are expected to significantly increase Iran›s productivity. However, some sanctions remain, so it is important to understand your Iranian partners business profile, take due diligence measures, and consider how and to whom payment will be made, to ensure compliance with all sanction restrictions.
Payments will be discussed further in the Trade Sanctions section of the website. Research and preparation should be undertaken beforehand in matters such as sanctions, banking and licensing matters.
The main cities in Iran are:
Iran is one of the fastest growing economies in the Middle East, and with the The main cities in Iran are:
- Tehran
- Mashad
- Karaj
- Isfahan
- Shiraz
- Tabriz
Tehran
Tehran is the cultural and economic center of Iran and is a dominant regional power exerting considerable influence over the region
- The North of Tehran is the most affluent area, with the best hotels, restaurants and coffee shops
- The commercial and business hub is from the center of the city at Enghelab Square to the North of Tehran through Valiasr Street
- The location of most of the government departments of business is in the Enghelab area of the city
- South of Enghelab is the less affluent residential section of Tehran, which is less frequented by tourists and foreign business people
Religion
Shia Islam is the official state religion in Iran. Christians, Zoroastrians and Jews are recognized religious minorities. The laws in Iran are based on Islamic principles and decrees.
Transportation
Iran has a sophisticated network of public transport, including the metro, buses, trains, taxis and internal flights. There is a women’s section on the metro and bus which is strictly women-only. However, women are permitted to enter the men›s sections when it is less busy to sit with their male companion. Imam Khomeini International Airport is the main international airport in Iran, located around 30km (around 40 mins) from Tehran. It is recommended that you book a CIP (commercially important person) ticket for your return trip to anywhere. CIP is a service that you can book at the airport which will give you a faster boarding time and access to a private lounge to wait for your flight.
The main port in Iran is Bandar Abbas port, which handles around %90 of the country’s container throughput. The main export terminal is Kharg Islam, roughly %90 of Iran›s exports are sent via Kharg.
A Brief History of Iran
Iran is one of the world’s oldest civilizations, with settlements dating back to 4000 BC. Sitting in the heart of the ancient Silk Road, its strategic location made it a major transit and commerce route, sparking Iran›s interest in international trade.
The country became an Islamic Republic in 1979 when the monarchy was overthrown, and religious clerics assumed power under Ayatollah Khomeini. Tehran is now a modern, vibrant city, ripe for investment from the West.
Geography
Located on the Silk Road, between the Middle East, Europe and Asia, Iran has a natural position for trade, as well as having the second largest gas reserves and fourth largest oil reserves in the world.
The country borders Afghanistan, Armenia, Azerbaijan, Iraq, Turkey, Pakistan and Turkmenistan. It also has easy access to port facilities, as it borders the Caspian Sea in the North and the Persian Gulf and the Gulf of Oman in the South.
Differences in Calendar and Working Week
The governmental fiscal year runs from 21st March to the 20th March. The date in Iran is currently 622 ,1396 years behind the Gregorian calendar. The Iranian calendar begins with the migration of the Prophet Muhammad from Mecca to Medina in 622. The working week is generally from Saturday to Wednesday; however, some private companies are open for half a day on Thursday.
Dress Code – Women
Women are well represented and welcome in the Iranian business world. Shown below are the various ladies› outfit options and conduct to enable foreign visiting women to do successful business on an even playing field in the Islamic Republic.
An Islamic dress code or ‹hijab› is enforced in Iran, and all tourists and foreigners must respect this style of dress. Hijab is the Arabic word for covering and a symbol of modesty.
- For women, hijab means covering your body and hair completely, normally with a loose outfit and headscarf, revealing only your face and hands
- You should cover your head with a scarf before you enter the Imam Khomeini Airport. Often flight staff will instruct you to cover your head when entering Iranian airspace. It is thus imperative to take along a scarf on any flight to Iran.
- In all business settings, it is imperative for women to cover themselves, their head and hair entirely
- You should wear a ‹manteau›, which is a loose-fitting coat that covers the chest area, arms and goes down to the thighs
- If your scarf falls off you head, you will be politely asked to cover your head by passers-by or the religious police
- Hijab must be worn in all public places, even in -5star hotels
- Monteau›s can be very fashionable, and we would recommend investing in a stylish ‹manteau› that you can wear to business meetings. Black is recommended for business meetings but not essential
- You can wear trousers, leggings and a shirt under the ‹manteau›
- Women in governmental offices and or schools will wear a ‹magne›, a more formal scarf that is tightly fitted to the head
- The chador is the Iranian national religious garment, covering the entire body
Dress Code – Men
- Men›s fashion is similar to Western men›s fashion, though shorts are unacceptable in Iran
- In business some of Iranian men do not wear ties; however, it is acceptable for visiting businessmen to wear them.
Language
The official language of Iran is Persian; however, the English language is widely spoken in business. Many Iranian business people have been educated in the West.
Tourism
Tourism to Iran from the West is on the rise, as travellers are drawn to visit its authentic and timeless sites in one of the few places still untouched by mass market tourism. Iran ranks in the top 10 in the number of UNESCO world heritage sites and offers some stunning ancient places, such as the legendary city of Persepolis, and some of the most spectacular mosques, palaces and architecture on the planet. Also, Tehran contains many winter ski slopes, which offer a fantastic ski season to rival Europe.
Developing the Iranian tourist market will require significant investment in its airlines, airports and hotels. In addressing this need, several international hotel chains have begun entering the market, including Accor, Rotana, and Melia Hotels International, which plans to open the luxury Gran Melia Ghoo, the country›s first international five-star start hotel, on the Caspian Coast in 2017. Even Britain›s own Easy Hotel chain is set to open hotels in Iran. Therefore, there are several 5/4* hotels which are starting to match their Western equivalents regarding quality and service. If you are looking to visit a trade show in Tehran International Permanent Fairground for example, the nearest hotel would be Parsian Azadi International
Hotel, a five-star hotel. Tehran International Permanent Fairground holds tens of international exhibitions every year, making it a popular hub for international business in Iran.
