Iran Seeks to Boost Foreign Investments with New Legislation

Strategic Insights -

Tehran's Deputy Minister of Economy and Finance, Saeed Shirkovand, has emphasized the importance of ratifying a new investment law to remove barriers to investments in capital markets. The current laws, dating back to the 1968-69 period, are deemed outdated and no longer suitable for today's markets. Shirkovand stated that the capital market is not strong enough to cover primary markets and that secondary markets are more responsive. He highlighted the need to revise laws on double taxation, anti-money laundering, customs formalities, and capital markets.

Key Takeaways:

  • The current domestic capital markets are based on draconian laws from 1968-69, which hinder investments in capital markets.
  • The deputy minister emphasizes the need to privatize capital markets and reduce the government's role in the markets.
  • The proposed new investment law aims to remove barriers to foreign investments and attract over $5 billion annually.
  • The Fourth Five-Year Development Plan (2005-2010) envisions a more independent Central Bank of Iran with the president appointing the CBI governor and head of the Council of Money and Credit.
  • Economic growth has been stronger than forecasted, with the average rate of 6 percent during the Third Five-Year Development Plan (2000-2005) and an estimated 5 percent GDP growth last year.
  • Iran has the capacity to attract $5 billion in foreign investment annually and is promoting various sectors for investment, including services, mining, industry, petrochemicals, chemicals, and foodstuffs.
  • Economic reforms are necessary to boost domestic and foreign investments, and the government has established centers in provinces to attract foreign investments and support investors in understanding the potential of various regions.

Statistics:

  • The Third Five-Year Development Plan (2000-2005) forecasted an average economic growth rate of 5.6 percent, but actually grew at 6 percent two years ago (IRNA).
  • The estimated GDP growth rate was 5 percent last year (IRNA).
  • Iran aims to attract over $5 billion in foreign investment annually (Head of Iran Foreign Investments Affairs).
  • Foreign investments are expected to be carried out in various sectors, including services, mining, industry, petrochemicals, chemicals, foodstuffs, and telecommunications.

Sources:

  • Deputy Minister of Economy and Finance, Saeed Shirkovand (April 14).
  • Head of Iran Foreign Investments Affairs (February).
  • IRNA (independent news agency).