Stage 2: Review of the Application by the Foreign Investment Board ( FIB ):
The OIETAI will prepare a report on the application to be reviewed for a decision by the FIB. This process usually will not take more than 15 working days from the time of the receipt of the application.
Representatives of the foreign investors are usually invited to take part in the FIB meeting. However, the Board has to make its decision not later than one month.
Stage 3: Communication of the Draft License to the Foreign Investor:
In order to ensure that the investor is satisfied with the decision of the Board, a draft license will be communicated to the investor before issuance of the final investment license.
This gives the opportunity to the investor to review the details of the content of the license as a sign of his no objection before final delivery.
The OIETAI welcomes any contrary commentary to the decisions made and would be ready to take the matter to the Board once again for reconsideration.
Stage 4: Issuance of the Investment License:
The final license shall not be issued at any circumstances unless the OIETAI is officially informed by the investor of his confirmation to the content of the draft license . Having received the investor’s confirmation on the draft, the final investment license will be issued earmarked by the signature of the Minister of Economic Affairs and Finance.
In order to facilitate the preparation of documentation for submission to the OIETAI, four different application forms have been designed, each of which appropriate for the type of investment that the investor is willing to apply for. The forms may be used for the following types of investment:
Form 100-1 to be used for Foreign Direct Investment (FDI) and Civil Partnership arrangements in greenfield projects;
Form 100-2 to be used for Foreign Direct Investment (FDI) in existing firms, whether quoted on the stock exchange or not;
Form 100-3 to be used for foreign investment under various Build, Operate and Transfer ( BOT) schemes;
Form 100-4 to be used for investment under Buy-Back and Project Financing arrangements.
Prospective investors are kindly requested to consult the OIETAI staff when filling out the forms. It may be required that, apart from the specific form to be submitted for investment licensing, certain other documents may be found appropriate and/or required to be submitted as well. Investors are addressed to the last page of the designated application form, and by ticking the relevant check box(es), ensure that the required documentation is attached to the application form accordingly.
As was explained in stage 2 of the Investment Licensing Procedure, a report based on the information submitted will be prepared by the OIETAI staff which will be reviewed by the Foreign Investment Board (FIB) for a favourable decision. The FIB is privileged by law to act as the highest authority in the investment licensing process. Members of the FIB are deputies of the most relevant policy-making and executive bodies of the Government. They are:
Deputy Minister of Economic Affairs and Finance and President of OIETAI, as the chairman of the FIB,
Deputy Minister of Foreign Affairs,
Deputy Head of State Management and Planning Organization,
Deputy Governor of the Central Bank of the Islamic Republic of Iran,
These four high-ranking officials are positioned to act as permanent members of the Board. The FIB may have other members at the same ranking level from line ministries depending on the merits of the project under investigation which call for relevant ministries’ affirmative role in the decision making process.
The Board’s resolution on each single investment application will have to be communicated to the applicant as explained in stage 4 above .
As was explained before, the final investment license after the receipt of a written confirmation by the foreign investor, stipulating that the content is acceptable, will be signed by the Minister of Economic Affairs and Finance and finally issued.
The investment license usually contains key and fundamental features of the investment particulars as well as the rights and commitments of the investor in respect of the sanctioned investments project (if any).The content, interalia, includes the name of the investor; the project or the company in which the investment will be made; the shareholding percentage as required for direct investments; the name of the Iranian local investor(s); and extends to the volume of the total capital investment to be imported by the foreign investor(s) and his (their) contribution to the equity capital as well as additional financial facilities provided by the investor(s) as the case may be.
The license will usually continue with the recognition of the rights of the foreign investors for the transfer of profits, repayment of the financial facilities, payment of fees and remunerations in respects of transfer of technology agreements ( royalties ) and finally, the right to repatriate capital which may result from the sale of shares or the proceeds from liquidation, the principal and the profit ( interest) of the financial facilities and any other foreign currency transfer within the context of the investment project. It usually goes further by indicating the source(s) out of which such transfers may be made by way of direct withdrawal from the export proceeds and/or the alterative option given to the investor to have access to the banking sector for transfer purposes.
The license may as well include certain other issues that in the opinion of the Board and/or at the request of the investor, may be found and deemed to be necessary to be addressed to accordingly. The license will usually ends with a deadline for the import of at least the first tranche of the capital to be imported to the country for the purpose of initial operation and materialization of the project concerned.
Foreign Investment License
Pursuant to Article (6) of the Foreign Investment Promotion and Protection Act (FIPPA), and by virtue of the resolutions adopted by the Foreign Investment Board on …(date)…, the Investment License of…(name of foreign investor) … is confirmed and issued as follows: ...(name fo foreign investor)... of …(nationality of foreign investment) is permitted, in accordance with the Foreign Investment Promotion and Protection Act and its Implementing Regulations and subject to all the laws and regulations of the Islamic Republic of Iran, to participate in the project for the …(project subject)… In partnership with …(name of local partner)…with a shareholding proportion of …(shareholding percentage)…% and …(shareholding percentage)… % Iranian company, under the following terms: 1. The investment of……(name of foreign investor) …… totally amounting to …(amount of foreign investment in forex)……shall be imported into the country in cash and/or in non-cash in the following manner: a) Foreign investor’s registered share capital equivalent to… (amount in forex) …, b) Financial facilities to the project equivalent to …(amount in forex). 2. The a.m. financial facilities shall bear a rate of %…(rate)… and repayment of the principal and repayment of the profit (interest) thereon shall be made during…(repayment duration)…years, in …( installments)… consecutive installemtns, out of the economic performance of the project. 3. Repatriation of the foreign capital shall, upon the approval of the Foreign Investment Board, be procured and transferable by way of purchasing of the foreign exchange from the banking system.
4. The Foreign Investor is required as from the date of notification of the Investment License , to take measures for the importation of an appropriate capital into the country, within ……(capital importation deadline)… months , for the commencement of the operation of the Project . |
