Country Focus: Iran
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Maryam Taghavi, senior consultant, Atieh Bahar Consulting, a member of Atieh Group
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is not connected to entities and individuals who are still on the sanctions list,” says Meskarian. For instance, the Iran Revolutionary Guard Corporation wields influence in many sectors. Hence, it is important for foreign players to take the help of local qualified experts to do a thorough background check. And, Iran does not allow trade with Israel-owned businesses. Red tape Complicated bureaucracy is an additional burden. Foreign companies are finding it difficult to understand and adjust to the ‘different’ ways of doing business in Iran. Maryam Taghavi, senior consultant, Atieh Bahar Consulting, a member of Atieh Group, feels the tangled network of governmental and semigovernmental entities makes it hard for foreign players to come to grips with facts pertaining to the market and its immense potential.
For example, foreign nationals need a work permit to establish their businesses. But for obtaining a work permit, a person is required to not leave Iran for a month. Real estate agencies have started seeking work permits in case foreigners need to rent a place. “This causes headaches for a foreigner who has just entered Iran and needs a place to stay, or to set up an office,” says Taghavi. But there are claims that the visa process has been speeded up. Fixers are everywhere, but finding one with the right expertise is not easy. “Many Iranians have launched companies claiming to offer consultancy services,” says Taghavi, adding that it will take years to really understand the underlying and determining factors of Iran’s markets and trends. One has to develop a reliable network of experts in various layers of the government and industries.
International Finance Magazine Oct - Dec 2016
Kunal Fabiani, business development manager, Healy Consultants Group, agrees that excessive due diligence is essential. “Clients must request invoices of the local companies and references to ascertain their worth. Without companies physically relocating to Iran to verify if they are bonafide, the best policy may be to work with non-Iranian companies, which already have existing business links with Iranian companies,” he says. Legal pitfalls Traditional European trade partners, such as Germany, Italy and France, have recent experience of Iran’s business peculiarities but other investors have no idea where to start and who to deal with. Labour laws and equality regulations are different. Furthermore, careful consideration needs to be given both to the choice of law and the means by which disputes are resolved in any contract
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I consider such hurdles would be expected in case of any emerging market and Iran is no exception. Although all EU based nuclear related sanctions were lifted under the terms of the Joint Comprehensive Plan of Action (JCPOA) as of the implementation day in January 2016, many political, legal and regulatory obstacles remain in attracting foreign investors into the country Azadeh Meskarian, solicitor, Zaiwalla and Co LLP