law and regulations of investment in Iran

Article 1: The terms and expressions used in the present Act shall have the meanings specified below:

• Act: Foreign Investment Protection and Promotion Act Foreign
• Investor: Any natural or legal non Iranian or Iranian person utilizing capital of foreign origin having obtained the Investment License referred to in Article 6.
• Foreign Capital: All types of capital, including cash or non cash that has been imported into the country by the Foreign Investor and includes the following:

1. Sums in cash entering the country in the form of convertible currency though the banking system or other means of transfer approved by the Central Bank of the Islamic Republic of Iran
2. Equipment and machinery
3. Spare parts and tools, raw material, manufacturing parts, additives and auxiliary material
4. Patent rights, technical know-how, trade names, trademarks and specialized services
5. Transferable dividends belonging to the Foreign Investor
6. Other authorized cases with the approval of the Council of Ministers.

• Foreign Investment: The utilization of Foreign Capital in an existing or newly established economic firm upon obtaining an Investment License.
• Investment License: A license to be issued in conformity with Article 6 of this Act for each case of Foreign Investment.
• Organization: The Organization for Investment, Economic and Technical Assistance of Iran (OIETA) subject of Article 5 of the Law on Establishment of Ministry of Economic Affairs and Finance (1974).
• Board: Foreign Investment Board subject of Article 6 of this Act.

Chapter Two: General Criteria for Admission of Foreign Capital

Article 2: Admission of Foreign Investment under this Act and in compliance with other current laws and regulations of the county must be for development and productive activities in the fields of industries, mines, agriculture and services shall be based on the following criteria:

1. Shall lead to economic growth, promote technology, promote quality of productions, increase employment opportunities and increase exports
2. Does not jeopardize national security and public interest, harm the environment, disrupt the national economy, or disturb productions dependent on domestic investments
3. Shall not involve the granting of concession by the government to Foreign Investors; concession means distinctive rights that place foreign investors in an exclusive and monopolistic position
4. The proportion of the value of goods and services produced by Foreign Investment under this Act in comparison with the value of goods and services supplied in the domestic market at the time of issuance of Investment License, in each economic sector, shall not exceed 25% and in each economic sub-sector shall not exceed 35%. The determination of sub-sectors and amount of investment in each will be pursuant to regulations ratified by the Council of Ministers.

Foreign Investment for production of goods and services for exports except for crude oil shall be exempt from such proportions.

Note: The Law Pertaining to Ownership of Immovable Property by Foreign National approved on June 6, 1931 remains applicable. The ownership of any type of land in any amount in the name of the Foreign Investors is not permitted within the framework of this Act.

Article 3: Foreign investments admitted in compliance with the provisions of this Act shall enjoy and facilities and protections of this Act. These investments may be admitted by the following means:

1. Direct foreign investment in those fields that private sector activity is authorized
2. Foreign investments in all sectors within the frameworks of “civil partnership”, “buy back”, and “build, operate and transfer (BOT)” where the return of principal and profit arises solely through the economic activity of the same investment project and does not rely on any guarantee by the government or banks or government companies.

Note: While Foreign Investment or the interest thereof invested through the “build, operate and transfer” scheme according to clause (b) of the present Article is not fully amortized, imposition of ownership rights by the Foreign Investor onto the investment project firm in proportion with retained share capital shall be permissible.

Article 4: Investment in the Islamic Republic of Iran by foreign government(s) shall be approved by the Islamic Consultambly on a case by case basis. Investments by foreign government companies shall be treated as private investmenttive Asse.

Chapter Three: Competent Authorities

Article 5: The Organization is the sole official authority for the promotion of Foreign Investments in the Country, and for investigation of all issues pertaining to Foreign Investments. Applications of Foreign Investors in respect of issues such as admission, importation, utilization and repatriation of capital shall be submitted to the Organization.

Article 6. For the purpose of investigation and making decision on applications referred to in Article (5), a board under the name of the “Foreign Investment Board” shall be established under the chairmanship of the Vice Minister of Economic Affairs and Finance who is ex- officio the President of the Organization, comprising of» Vice Minister of Foreign Affairs, Vice President of the State Management and Planning Organization, Vice Governor of the Central Bank of the Islamic Republic of Iran and vice ministers of relevant ministries, as the case requires.

In relation to applications for admission, the Investment License shall, after the approval of the Board, be issued upon confirmation and signature by the Minister of
Economic Affairs and Finance.

At the time of admission of Foreign Investments, the Board is required to observe the criteria referred to in Article (2) of FIPPA.

Note: The Organization, after preliminary review, shall submit the investment applications along with its own recommendation, to the Board within a maximum period of 15 days as from the date of the receipt of the applications. The Board must review the applications within a maximum period of one month from the date of submission, and notify its final decision in writing.

Article 7: In order to facilitate and expedite issues related to the admission and activity of Foreign Investments in the Country, all relevant agencies including the Ministry of Economic Affairs and Finance, the Ministry of Foreign Affairs, the Ministry of Commerce, the Ministry of Labor and Social Affairs, the Central Rank of the Islamic Republic of Iran, the Customs of the Islamic Republic of Iran, the General Directorate for Registration of Companies and Industrial Property, and the Organization for Protection of the Environment are required to designate a fully authorized representative to the Organization by the highest authority of the agency. These representatives shall act as the liaison and coordinator for all issues related to their respective agency vis-a-vis the Organization.

Chapter Four: Guarantee and Transfer of Foreign Capital

Article 8: Foreign investments subject to this Act shall enjoy the same rights, protections and facilities available to domestic investments in a non-discriminatory manner.

Article 9: Foreign Investment shall not be expropriated or nationalized unless for the public interest, through a legal process, in a non discriminatory manner, and against payment of appropriate compensation based on the real value of that investment immediately before the expropriation.

Note 1: Requests for compensation must be submitted to the Board within a maximum of one year following the expropriation or nationalization.
Note 2: Disputes resulting from expropriation or nationalization will be settled according to Article 19 of the present Act.

Article 10: Transfer of all or part of the Foreign Capital to a domestic investor or upon the approval of the Board and confirmation of Minister of Economic Affairs and Finance, to another Foreign Investor shall be permissible. In case of transfer to another Foreign Investor, the transferee, who shall have at least the qualifications of the original investor, will replace and/or become partners with the original investor for the purposes of the regulations of the present Act.

Chapter Five: Regulations Pertaining to Admission, Import and Export of Foreign Capital

Article 11: Foreign Capital may enter the country and be covered under this Act through one or a combination of the following:

1. Cash sums converted to Rials
2. Cash sums not converted to Rials to be used directly for purchases and orders related to the Foreign Investment
3. Non-cash items upon completion of the evaluation process by the competent authorities

Note: The executive by-laws of the present Act shall specify the relevant procedure for evaluation and registration of Foreign Capital.

Article 12: The applicable foreign exchange rate at the time of entry or exit of Foreign Capital as well as all foreign exchange transfers shall in the case of applicability of a unified exchange rate be that rate prevailing in the country’s official network and otherwise the daily free market rate as recognized by the Central Bank of Iran.

Article 13: The principal and interest of Foreign Capital or any portion of the capital remaining in the country may be transferred abroad with a three-month notice to the Board upon fulfillment of all outstanding obligations, payment of legal deductions and the approval of the Board and confirmation of Minister of Economic Affairs and Finance.

Article 14: The profits of Foreign Investment may be transferred abroad upon deduction of taxes, duties and legal reserves with the approval of the Board and confirmation of the Minister of Economy and Finance.

Article 15: Payments for the principal part of financial facilities and related expenses of Foreign Investors, contracts related to patent-right, know-how, technical and engineering, trade name and trademark, management and other similar contracts within the framework of Foreign Investment may be transferred abroad pursuant approval of the Board and confirmation of the Minister of Economic Affairs and Finance.

Article 16: Transfers subject of Articles 13, 14 and 15 shall be done in compliance with provisions of clause (b) of Article 3.

Article 17: Acquisition of foreign exchange for transfers subject of Articles 13, 14 and 15 is possible through the following methods:

1. Purchase of foreign exchange from the banking system
2. Using the foreign currency earned through the export of commodities produced, and/or the foreign currency earned through providing services of the economic firm in which the Foreign Capital is utilized
3. Export of authorized goods as per a list to be approved for implementation of this clause, by the Council of Ministers with due regard to relevant laws and regulations.
   Note 1: Application of one or a combination of the above methods shall be provided for in the Investment License.
   Note 2: In the case of investments subject of clause (b) of Article 3 of this Act, should laws or government regulations lead to prohibition or cessation of approved financial agreements within the framework of this Act, then the government shall procure and pay the resulting damages with the ceiling being the matured and due installments. Limits of the reimbursable undertakings according to this Act shall be approved by Council of Ministers.
   Note 3: The Central Bank of the Islamic Republic of Iran is obligated to procure and provide the foreign currency equivalent of transferable sums mentioned in Clause (a) above to the Foreign Investor with the approval of the Organization and confirmation of the Minister of Economic Affairs and Finance.
   Note 4: If the Investment License is based on clauses (b) and (c) of this Article, the said license shall be regarded as an export license.

Article 18: The repatriation of the part of Foreign Capital which is imported into the country within the framework of the Investment License but remains unused, shall not be subject to any foreign exchange or imports-exports’ laws and regulations.

Chapter Six: Settlement of Disputes

Article 19: Disputes arising between the Government and the Foreign Investors with regard to their respective mutual obligations within the context of investments under FIPPA, if not settled through negotiations, shall be referred to domestic courts, unless the Law ratifying the Bilateral Investment Agreement with the respective government of the Foreign Investor provides for another method for settlement of disputes.

Chapter Seven: Final Regulations

Article 20: The relevant executive bodies are required to accommodate the requests of the Organization in matters concerning issuance of visas, residence permits, issuance of work and employment permits on a case by case basis which shall be required for foreign investors, managers and/or experts working of the private sector and connected to foreign investments subject to this Act and for their next of kin.

Note: Disputes between the Organization and executive bodies will be settled according to the decision of the Minister of Economic Affairs and Finance.

Article 21: The Organization is required to facilitate public accessibility to all information pertaining to investment and foreign investors, investment opportunities, Iranian partners for the related activity and other information available to the Organization.

Article 22: All ministries and government companies and organizations as well as those public institutes that the applicability of law to them requires specific mention are required to provide the Organization with all information needed for foreign investment and reports on foreign investments made, so that the Organization could act upon according to the above Article.

Article 23: The Minister of Economic Affairs and Finance is required to provide the relevant Islamic Consultative Assembly commissions with a report on the performance of the Organization with respect to Foreign Investment subject of this Act every six months.

Article 24: As of the date of approval of this Act and its executive by-laws, the former Law on Attraction and Protection of Foreign Investment — approved on October 29, 1955 — and the relevant by-laws are repealed. All foreign capital subject to the former law will be covered by this Act. The provisions of this Act will be repealed or modified by any subsequent and upcoming laws and statutes only if a specific provision shall be stipulated in them reiterating such nullification or modification.

Article 25: The executive by-laws of the present Act shall be prepared by the Ministry of Economic Affairs and Finance and subsequently approved by the Council of Ministers within 2 months.

Implementing Regulation of Foreign Investment Promotion and Protection Act

Chapter One: Definitions

Article 1: All terms and expressions defined in Article (1) of the Foreign Investment Promotion and Protection Act (FIPPA) shall have the same meanings in these Regulations. Other terms and expressions used in these Regulations shall have the following meanings:

Regulations: The Implementing Regulations of FIPPA.

Inyestee Firm: A new and/or an existing Iranian company in which the Foreign Capital is utilized under one ofthe methods specified in FIPPA.

Non-governmental Sector:Private and cooperative sectors and non-governmental public institutions and establishments.

Center: The Center for Foreign Investment Services, established in accordance with Article (7) of FIPPA at the premises of the Organization.

Country’s Official Monetary Network: Banking system (the Central Bank and the banking network, being governmental or non-governmental) and non-banking credit institutions which, upon the permission of the Central Bank, are dealing with monetary and foreign exchange activities.

Audit Firm: An audit firm, selected by the Organization from amongst the audit firms which are members of Iran Association of Certified Accountants, subject matter of the “Law governing the Use of Specialized and Professional Services of Competent Accountants as Official Accountant”, enacted in 1993, or the Auditing Organization.

Chapter Two: Investment Methods and Criteria for Admission

Article 2: Foreign Investments admitted in the territory of the Islamic Republic of Iran on the basis of FIPPA, shall enjoy the facilities and protections available under FIPPA. Admission of such investments is subject to the general conditions for admission of Foreign Capital and submission of a written application by the Foreign
Investor, and with due observance ofthe criteria set forth in these Regulations.

Article 3: Admission of Foreign Investment, based on FIPPA and the criteria set forth in these Regulations, may be carried out within the framework of the following methods. The table of investment methods, Features and facilities available under FIPPA shall be prepared and published by the Ministry of Economic Affairs and
Finance.

1. Foreign Direct Investment (FDI)
2. Foreign Investment within the framework of contractual arrangements including various types of “ Build-Operate-Transfer ” (BOT) ,“Buy-Back ” and ”Civil Participation” schemes.

Article 4: Methods of investment referred to in Article (3) of these Regulations, in respect of the procedure for investment and the protection coverage of FIPPA and these Regulations, have the following common or specific features and advantages.

a. Common features and advantages:

1. Foreign Investors enjoy the same treatment as accorded to domestic investors.

2. Import of Foreign Capital, being cash or non-cash (in kind), is only subject to the Investment License and does not require any other license.

3. The volume of Foreign Investment in each individual case shall not be subject to any limitation.

4. Foreign Capital is guaranteed against nationalization and expropriation, and in such ceases the Foreign Investor shall be entitled to receive compensation.

5. Transfer of the principal capital, profit and capital gains derived from utilization of capital shall be ‘effected in the form of foreign currency or, as the case may be, in the form of goods, as set out in the Investment License.

6. The freedom to export goods produced by the Investee Firm is guaranteed and, in the event of any prohibition on the export, the goods produced may be sold in the domestic market, and proceeds of sale shall be transferable abroad in the form of foreign currency through the Country’s Official Monetary Network.

b. Specific features and advantages:

1. Foreign Direct Investment (FDI)
1-1 Investment may be made in all areas where the private sector activity is permitted.

1-2 There is no restriction on the percentage of foreign shareholding.

2. Investment within the framework of contractual arrangements.

2-1 Compensation for losses sustained by the Foreign Investment resulting from prohibition and/or interruption in the execution of financial agreements caused by enactment of law and/or Cabinet decrees, up to a maximum of matured installments, shall be guaranteed by the Government.

2-2 In “B.O.T.” and “Civil Participation” schemes where a government agency is the sole purchaser and/or supplier of goods and services at subsidized prices, the purchase of produced goods and services resulting from an investment project by the government agency as a party to the contract, shall be guaranteed in accordance with the relevant regulations.

Article 5: Iranian natural and juridical persons applying for investment in the Country, for the purpose of enjoying the facilities and protections under FIPPA, are required to submit documentary evidences proving their ‘economic and commercial activities outside the Country.

Article 6: Foreign Investors who have already invested in Iran without the benefit of coverage of FIPPA may, upon completion of the admission procedure, benefit from FIPPA’s coverage for the principal investment already made, Subsequent to the issuance of the Investment License, the investor shall be entitled to benefit from all privileges of FIPPA including, interalia, the right to transfer profit. This type of investments shall be generally considered as existing investments to which the general criteria for admission of Foreign Capital is applicable.

Article 7: Foreign Investment in existing firms by way of purchasing shares and/or capital increase and/or a combination of the two, subject to completion of the admission procedure, shall benefit from the privileges of FIPPA provided that such investment creates added value, The added value so created may result from an increase in investment in the existing firm and/or achievement of certain objectives such as enhancement of ‘management, increase in exports, and/or improvement in the technology level of the existing firm.

Article 8: The Board, in the course of examining and issuing the License for any Foreign Investment application, shall investigate and verify the ratios set out in Para (d) of Article (2) of FIPPA in the following manner:
a. Specifications of the proposed project including the type and volume of goods and services to be produced, the time-schedule for the implementation and operation
of the project, as well as projection for domestic or export sales will be set out in the application forms for investment.

b. The official statistics provided by the competent authorities relating to the value of goods and services supplied to the domestic market in every sector and sub- sector (field) at the time of issuance of the Investment License shall be obtained by the Deputy for Economic Affairs of the Ministry of Economic Affairs and Finance. The bases for the Board’s decisions shall be the statistics made available to the Organization by the aforementioned deputy up to the end of the first quarter of each year.

c. Sectors and sub-sectors (fields) shall be distinguished on the basis of the list attached to these Regulations.

d. The volume of investment in each sector and sub-sector (field) shall be determined by the Board in accordance with the provisions of Paras (2), (6) and (c) of this Article, and the value of goods and services supplied to the domestic market, and with due observance of the exception from investment limitation on the export of goads and services derived from Foreign Investment, and, in the event of approval of the project, the Investment License shall be issued.

Note: Changes in the ratio of the value of goods and services resulting from Foreign Investment and/or changes in the value of goods or services supplied to the domestic market, which at the time of issuance of the Investment License have constituted the bases for the Board’s decision, shall not affect the validity of the Investment License once its issued.

Article 9: Assignment of the proprietary rights to the Iranian party designated in “BOT” contracts may, on the basis of the agreement of the parties to the contract, be effected by way of gradual assignment of proprietary rights during the contract period, or single assignment of the acquired rights at the end of the contract period.

Article 10: In “BOT” contracts, the proprietary rights of the Foreign Investor may be assigned to the institution providing the financial facilities to the investment project upon the confirmation of the Board.

Article 11: With respect to those investment projects where a government agency is the exclusive purchaser of | produced goods and services as well as cases where the goods and services produced by the investment project is supplied at subsidized prices, the government agency may, within the established legal framework, guarantee the purchase of the goods and services produced at the price and quantity determined in the relevant contract.

Chapter Three: Admission Regime

Article 12: The Organization, while carrying out the duties relating to admission and protection of Foreign Investments within the framework of FIPPA, is in charge of performing and conducting foreign investment promotion activities inside and outside the Country as well as introducing legal grounds and investment ‘opportunities, carrying out studies and applied researches, organizing conferences and seminars, cooperating with the relevant international organizations and institutions, and establishing relations and coordination with other agencies in gathering, compiling ‘and providing information related to Foreign Investment.
Article 13: The Board is responsible for investigating and making decision on all investment applications including applications for admission, importation and utilization of Foreign Capital as well as repatriation of capital and accrued profits.

Article 14: The permanent members of the Board are the four deputy ministers specified in Article 6 of FIPPA, and the Board’s meetings require a quorum of at least
three permanent members, and decisions shall be made with at least three positive votes. The deputies of other relevant ministries shall, upon invitation of the Chairman of the Board, attend the meetings with the right to vote. In such cases, decisions are made by the majority of votes cast.

Article 15: Investors shall submit to the Organization their written application together with the documents specified in the relevant form. After conducting necessary investigations and taking the viewpoints of the ministry responsible for the related sectors, the Organization shall bring the investment application along
with its expert advice before the Board within a maximum period of 15 working days. Enquiries remained unanswered by the relevant ministry, after 10 days from
the date of receipt of the enguiry shall be considered as agreement of that ministry with the investment concerned.

On the basis of the decisions adopted by the Board for which the acceptance of the Foreign Investor has already been obtained, the Investment License shall be drafted
and, upon confirmation and signature by the Minister of Economic Affairs and Finance, shall be issued.

Note: The Investment License shall include the particulars of the investor(s), type and method of investment, the manner for transfer of dividend and profit gained as well as other terms and conditions relating to the approval of every investment project.

Chapter Four: The Center for Foreign Investment Services

Article 16: For the purpose of facilitating and accelerating the fulfillment of the Organization’s’ legal duties in the areas of promotion, admission and protection of Foreign Investment in the Country, the Center for Foreign Investment Services” shall be established at the premises of the Organization where the representatives of the relevant agencies will be stationed. This Center shall be the focal point for all referrals by Foreign Investment applicants to the relevant organizations.

Article 17: The Ministry of Economic Affairs and Finance (State Organization for Tax Affairs, Customs of the Islamic Republic of Iran), the Ministry of Foreign Affairs, the Ministry of Commerce, the Ministry of Labor and Social Affairs, the Ministry of Industry and Mines, the Ministry of Jihad-e-Agriculture, the Central Bank of the Islamic Republic of Iran, the General Directorate for Registration of Companies and Industrial Property, the Organization for Protection of the Environment, and other executive agencies determined by the Minster of Economic Affairs and Finance shall introduce their fully authorized representatives to the Organization with the signature of the highest executive authority of the agency.

The designated representatives, from the standpoint of the employment regulations, shall be considered as the employees of their respective agencies, and , as situation requires and in proportion to the volume of Foreign Investment applications and enquiries by the investors, shall, upon the Organization’s request, be present in the Center in order to respond to the enquiries in accordance with the duties assigned to them under this Article.

Article 18: The representatives introduced to act on be half of the relevant agencies shall have authority overall executive and service issues related to their respective agencies in respect of Foreign Investments. The relevant executive agency, for the purpose of good performance of the duties assigned to the representative under FIPPA and these Regulations, is required to notify the duties, responsibilities and authorities of the representative to other departments of its organization and, simultaneously, to conduct a review on the administrative procedures relating to Foreign Investments under its authority in a manner to facilitate the fulfillment of the
duties assigned to the representative in the Center.
Article 19: The relevant executive agency, in order to maintain the continuation of its executive and service Activities in the Center, may, in addition to the designated representative, introduce another person with the same qualifications to represent as the alternate to perform the duties in the absence of the representative of the agency. If necessary, the relevant executive agency may place in the Center a maximum of two more persons at senior level for issues related to that agency.

Article 20: The functions of the “Center for Foreign Investment Services” are determined as follows:

a. Provision of information and necessary advice to Foreign Investors.

b. Coordination required in respect of affairs related to securing necessary licenses, including, but not limited to, the declaration of establishment, the license of the Organization for Protection of the Environment, the permits for subscriptions relating
to water, electricity, fuel and telephone exploration and exploitation licenses for mines.etc. from the relevant agencies, prior to the issuance of the Investment License.

c. Coordination required in respect of affairs related to issuance of visa, residence and work permits for individuals related to Foreign Investment.

d. Coordination required in respect of affairs related to Foreign Investment subsequent t0 the issuance of the Investment License including registration of
joint venture company, registration of orders, and issues related to importation and repatriation of capital, customs and tax affairs, etc.

e. Coordination required to be established by representatives of the agencies among executive departments of their respective agencies in respect of applications for Foreign Investment

f. Monitoring the good performance of decisions made in respect of Foreign Investments.

Chapter Five: Provisions for Importation, Valuation and Registration of Foreign Capital

Article 21: The procedure relating to the importation, valuation and registration of Foreign Capital, being cash of non-cash (in kind), is set forth as follows:

a: Capital in cash

1. Cash funds in foreign exchange referred to in Para (a) of Article (11) of FIPPA imported into the Country in one or several stages with the intention to be converted into Rials, shall, on the date of conversion into Rials and in accordance with the Certificate of the bank, be registered by the Organization in the name of the Foreign Investor, and shall be covered by FIPPA. The Rial equivalent of the foreign currency imported shall be deposited in the account of the Investee Firm or in the account of the investment project.

2. Cash funds in foreign exchange referred to in Para (b) of Article (11) of FIPPA imported into the Country in one or several stages but not converted into Rials, shall be deposited in the foreign exchange account of the Investee Firm of in the account of the investment project. These funds, as from the date of deposit, shall be registered in the name of the Foreign Investor, and shall be covered by FIPPA, The said funds may, under the supervision and confirmation of the Organization, be used for foreign purchases and orders related 10 the Foreign Investment.

Note: The Country’s Official Monetary Network is required, in relation to the foreign exchange transfer drafts of Foreign Investors, to certify directly to the Organization the details of the draft including the name of the transferor, the amount of the foreign exchange, the type of the foreign exchange, the date of receipt, the date of conversion, the name of the Investee Firm, and, in case of conversion into Rials, the Rial equivalent of the foreign exchange imported.

b: Capital in kind ( non-cash)

Foreign Capital in-kind includes those items mentioned in Paras (b), (c) and (d) under the definition of the term Foreign Capital in Article (1) of FIPPA for which the procedure for importation, valuation and registration is set out as follows:

1. With respect to the Foreign Capital in-kind referred to in Paras (b) and (e) above (including machinery, equipments, tools and spares, CKD pars, raw addable and auxiliary materials), the Ministry of Commerce, after being notified of the Organization’s agreement with the importation of the non-cash Foreign Capital items, shall proceed with the statistical registration of the order and communicate the issue 10 the relevant customs office for the purpose of valuation and release of the imported items.

The Customs’ valuation on the value of the imported items shall be considered as the acceptable valuation, and, upon the request of the investor, the Value stated in the import license plus the transportation and insurance expenses, shall be registered in the name of the Foreign Investor, and shall be covered by FIPPA as from the date of release from the Customs. In ease of discrepancy between the Customs valuation and the price stated in the detailed list (of the non-cash items) approved by the Board, the Customs valuation shall be the basis for registration of the Foreign Capital in the Organization and the General Directorate for Registration of Companies and Industrial Property.

Note 1. The Ministry of Commerce and the Organization are required to take measures, within a period of one month from the date of official notification of these
Regulations, for the preparation of a special form for the statistical registration of orders of the non-cash Foreign Capital items under this paragraph, and to act accordingly.

Note 2. The Customs of the Islamic Republic of Iran is required to assess the value of the second-hand machinery and equipments related to Foreign Investments at second-hand price.

Note 3. If, by finding, the non-eash Foreign Capital imported into the Country is defective, mutilated, not usable and/or does not conform with the specifications declared in the list approved by the Board, the matter will be brought before the Board, and that part of the value of  the imported goods which is not confirmed by the Board shall be deducted from the account of the imported capital.

2. With respect to capital items referred to in Para (d) of Article (1) of FIPPA (including patent, know how, trade names and marks, and specialized services), the Organization, after carrying out the necessary investigations, shall submmit to the Board a report on the fulfillment of the contractual undertakings under the technology and service agreements, and the approved sums. shall be registered by the Board as Foreign Capital and shall be covered by FIPPA within the framework of a directive to be drafted by the Board and approved by the Minister of Economic Affairs and Finance.

Chapter Six: Provisions on Repatriation of Capital and Capital

Article 22: All applications for the transfer of capital, profit as well as gains resulting from an increase in the value of capital covered by FIPPA must be supported by the report of an Audit Firm that is a member of Iran Association of Certified Accountants. Such transfers shall be effected, after deduction of all legal dues, up to the amount certified by the Audit Firm.

Article 23: Transfer mentioned in Article 13, 14 & 15 of FIPPA related any investment schemes referred to in Article 3 of FIPPA will be made through foreign exchange purchased from the Banking System. The Board, on the basis of the Audit Firm report on the latest, status of the principal capital, the amount of profit and the capital earnings from the services rendered by the Investee Firm, and/or by way of the export of other authorized goods. The Board, on the basis of the report of| the Audit Firm on the latest status of the principal capital, amount of profit and capital gains belonging 10 the Foreign Investor shall determine the transferable amount and shall ins belonging to the Foreign Investor, shall determine the amount of transferable fund (which in case of the investment referred to line Para (b) of Article (3) if FIPPA must be solely emanated from the economic performance of the project) and shall issue, upon the confirmation by the Minister of Economic Affairs and Finance, the repatriation permit, on a case by case basis Note. The requirements stipulated at the top of this Article will not apply to investments made within the framework of contractual arrangements such as Buy- Back, in which repatriation of principal capital and other transfers are made through export of goods.

Article 24: By virtue of Para (a) of Article (2) of FIPPA, in case goods or services of the investee firm is to be exported, investee firm is obliged to submit the related customs certificate or service export certificate to the organization.

Article 25: The foreign exchange earnings from the exports. of Foreign Investment, within the limits prescribed by the Board, is exempt from any regulations restricting export and from foreign exchange regulations such as commitments for reintroducing the export earnings to the Country pursuant to the current and future
governmental regulations.

Article 26: In the event of a legal restriction and/or restriction prescribed by the Government as a result of which the Investee Firms cannot export their products, so
long as the legal restriction and/or Government decision preventing export is in force, the said Investee Firms are authorized to sell their products in the domestic market,
and, by providing the Rial equivalent of the foreign exchange requirements specified in the Investment License, to purchase the required foreign exchange from the banking system and transfer the same, and/or (should they wish so) to export authorized goods.

Article 27: The transferable funds as set forth in FIPPA may be purchased, after confirmation of the Board and upon confirmation by the Minister of Economic Affairs and Finance, by the Foreign Investor from the banking system, and be effectively transferred, and the Central Bank of the Islamic Republic of Iran shall, for this purpose, make available the necessary foreign exchange to the banking system.

Artie 28: In the event that the Foreign Investor does not transfer abroad the transferable funds within a period of 6 months from the date of completion of the relevant administrative formalities, the said funds shall be removed from the coverage of FIPPA. The continuance of the applicability of FIPPA in respect of the said funds shall be possible upon approval of the Board.

Article 29: The Foreign Investor, if so wishes, may use, with the permission of the Board , all or part of the transferable amounts pursuant to Amticles (13) , (14) and (15) of FIPPA for capital increase in the same firm, and/or, after completion of the legal formalities for obtaining the Investment License, utilize it in a new investment.

Article 30: The Government, with due observance of Article (138) of the Constitution of the Islamic Republic of ran, (hereby) delegates 1 the member Ministers of the High Council for Investment the authority to determine the scope of acceptable commitments under Note (2) of Article (17) of FIPPA. The Board is authorized to determine the extent of losses resulting from prohibition and/or interruption in the execution of the relevant financial agreements up to the ceiling of the matured commitments within the limits of acceptable undertakings set out in the Investment License. The bases for making decisions in respect of the authority referred to in this Article shall be the agreement of the majority embers of the said Council. Decisions adopted may be issued, if confirmed by the President, pursuant to Article (19) of the internal regulations Of the Council of Ministers.

Article 31: In case the Foreign Investor insures his investment in Iran and, m accordance with the terms of the insurance policy on account of a payment made under the insurance policy to the investor for the compensation of a loss incurred from non-commercial risks, the insurance institution subrogates the investor, the subrogee is entitled to enjoy the same rights on account of which the payment for losses has been made. This subrogation shall not be considered as assignment of capital, unless the provisions of Articles (4) and/or (10) have been complied, accordingly.

Chapter Seven: General Provisions

Article 32: The Foreign Investor is required, as from the date of notification of the Investment License within a period determined on the basis of the peculiarities of the investment project by the Board , to import part of his capital into the Country as a sign of his firm intention for the implementation of the project. In the event the investor docs not import part of the capital into the Country within the duration of the determined period, and/or does not apply for the extension of the period by way of submission of justifiable reasons, the Investment License shall be considered as null and void.

Article 33: The Foreign Investor is required to inform the Board of any change in the name, legal status, nationality, and of any change of more than 30% In his ownership.

Article 34: In cases where the Foreign Investment results in the establishment of an Iranian company, the ownership of land in the name of the company is permitted at a size appropriate to the investment project, at the discretion of the Organization.

Article 38: The relevant executive agencies, including but not limited 10, the Ministry of Foreign Affairs, the Ministry of the Interior and the Ministry of cooperatives, Labor and Social Welfare, are required on the basis of the approval and introduction of the Organization to proceed with the issuance of visa, residence permit and work permit for the following persons in accordance with the provisions of this article:
1. Foreign investor

2. Managers and experts ofthe foreign investor

3. Foreign managers and experts of economic enterprise in which the foreign capital shall be used.

4. Spouses, male children under the age of 18, single female children, and the parents under the guardianship of those subject to parts 1,2 and 3 herein.

A) The Minis of Foreign Ar, upon respect of the request of the Organization based of the type and duration of the visa applied for, shall issue the single entry visa or multi-entry visa at (a maximum of three years) with a 90 days residence permit on each entry fore those subject to part 1 to 4 within three working days in the event of no legal obstacle. In case of impossibility of issuance of the visa, the ministry shall announce the result to the applier and the Organization.
B) The Ministry of cooperatives, Labor and Social Welfare, based on the application of the Organization and without considering the type visa shall issue work permit or extend the work permit of those subject to parts 1, 2 and 3 within seven working days in the event of no legal obstacle.  In case of impossibility of issuance, the ministry shall announce the result to the applier and the Organization.

C) The Ministry of the interior, with cooperation of the Ministry of Intelligence and in partnership whit the Disciplinary Forces of Islamic Republic of Iran (the Police), based on the application of the Organization shall issue or extened three-year residence permit for those subjects to parts 1 to 4 within three working days in the event of no legal obstacle and in case of impossibility of issuance shall announce the result to the applier and the Organization.
Note: Obtaining residence permit by those subject to pars 1 10 4, shall exempt them from entry and exit visas required for traveling to or from the Country.

Article 36: The responsibility of the Organization in relation to the general publication of information pursuant to Article (21) of FIPPA, is limited to the information that is publishable under business practice. The Board is vested with the authority to determine whether information is publishable.

Article 37: The Organization and the Board are permitted, for the purpose of carrying out the functions and duties contemplated in FIPPA and these Regulations, to use, whenever required, consultancy and professional specialized services of the Audit Firms member of Iran Association of Certified Accountants and other private or cooperative qualified firms.

Article 38: All provisions contained in the decrees of the Council of Ministers in respect of Foreign Investment that are contrary to the provisions of these Regulations, shall be repealed from the date of coming into force of these Regulations.