Free trade zones and special economic zones in Iran

The potential of Iran's economy and the opportunities created by the legal framework with enabling laws have made Iran an attractive option for investment.

Free Trade Zones and Special Economic Zones play an important role in promoting economic growth and attracting foreign investment in Iran. Key features of Free Trade Zones and Special Economic Zones:

• Relaxed Regulations: Regulations in free trade zones and special economic zones are often less strict than in other parts of the country, making it easier for businesses to operate and grow. This includes fewer restrictions on business activities, trade, and investment.
• Better Infrastructure: Free Trade Zones and Special Economic Zones in Iran are typically developed with high-quality infrastructure, including transportation links, utilities, and telecommunications services. This infrastructure provides businesses with a favorable environment for growth and success, making it easier to start and grow a business.
• Access to Markets through Special Logistics Access to Asian and European Transit Channels: Free Trade Zones and Special Economic Zones offer companies access to new markets, both domestic and international. This gives companies the opportunity to reach new customers and expand their presence in the country.
• Government Support: The Iranian government supports free trade and special economic zones by providing financing and other forms of support.
• Attracting Foreign Investment: By providing a favorable business environment and access to markets, free trade and special economic zones in Iran help attract foreign investment.

Free Trade and Industrial Zones

Free Zones — These are geographical boundaries that are often established near borders and customs ports of entry to support domestic industries and facilitate the import, export and transit of goods, and impose simpler customs formalities than on the mainland. These zones are outside the scope of many mainland laws and, due to the facilities, opportunities, exemptions and privileges they provide, can be a good platform for export producers, traders and transit industry activists.

Free zones are governed by their own regulations, which are approved by the Cabinet of Ministers. Tax incentives, exemption from bank interest and customs duties, absence of administrative and foreign exchange formalities, and simplicity of export-import processes, which ultimately leads to the attraction of foreign capital, are the most important features of the zones.

The free industrial and trade zones are under the supervision of the Free Industrial and Trade Zones Organization, and the decision-making powers of the organizations on the mainland are delegated to this organization in the zones.

Following the approval of the first Social, Economic and Cultural Development Plan of the Islamic Republic of Iran and the consent of the Parliament based on Note 19 of this Plan, three free industrial and trade zones began their operations in 1989, 1990 and 1991 respectively. The Law on the Establishment and Management of Zones was passed by the Parliament in September 1993, and over time other zones have joined the list of free zones. 

The main focus of developing these zones is to stimulate industrial exports, attract foreign capital and technology, strengthen transit channels and strengthen the country's position in international trade.

The management of each free zone is the responsibility of a single organization called the Free Zone Organization, and this makes the conditions and process of investing and setting up a business in Iran's free zones much faster and easier than on the mainland. Some of the benefits of investing in Iran’s free zones include the following:

• Possibility of registration and 100% ownership of a company by individuals or companies that do not have Iranian citizenship.
• Complete freedom of entry and exit of capital and profits generated from economic activities.
• Special logistical access to Asian and European transit channels.
• Exemption from customs duties on imports of raw materials and industrial equipment for production facilities.
• Customs benefits and simplification of formalities for the export and re-export of goods.
• Exemption from income and property taxes for a period of 20 years from the date of establishment.
• Simplified visa issuance for foreign nationals working in the zones.
• Compliance with labor laws for free trade zones and industrial zones, which differ from those of the mainland. parts.
• Enjoy flexible banking and money services as well as easy currency exchange through Iranian banks and their branches in the zones and foreign countries

Free Trade and Industrial Zones of the Islamic Republic of Iran

• Qeshm Free Trade and Industrial Zone
• Chabahar Free Trade and Industrial Zone
• Aras Free Trade and Industrial Zone
• Enzali Free Trade and Industrial Zone
• Arvand Free Trade and Industrial Zone
• Kish Free Trade and Industrial Zone
• Maku Free Trade and Industrial Zone
• Imam Khomeini Airport Free Zone

Special Economic Zones of Iran

According to the text of the law, a special economic zone is defined as follows: “A defined geographical boundary within which the customs laws of the country do not apply and which is established for the purpose of facilitating the import and export of goods, support of domestic industry, as well as attraction of new technologies for production and regional development at customs entry/exit and border points of the country, is called a special trade and industrial zone".

Also, in paragraph "g" of note 25 of the Law on the Second Five-Year Economic, Social and Cultural Development Plan of the Islamic Republic of Iran, adopted in 1993, it is established: "In order to support domestic production and development of non-oil exports, as well as to mobilize the regional economy, the government may establish special protected zones at entry points or inland customs. Import of goods from these zones for domestic consumption is regulated by export and import rules, and export of goods from these zones is carried out without any formalities. Since the zones are referred to as “customs protected areas” in the First and Second Development Plans, the Supreme Council chose the name “Special Economic Zone” for these zones in 1995 to clarify the ambiguities.

Investments in Iran's special economic zones include the following benefits:

• The import of goods from the above-mentioned zones for domestic consumption will be subject to the rules of export and import, and the export of goods from these zones will be carried out without any formalities.
• The import of goods from abroad, from free trade zones or industrial zones will be carried out with minimal customs formalities, and all cases of internal transit will be carried out in accordance with the applicable regulations.
• The registration of goods falling under this article will be carried out without any customs formalities.
• The goods imported from outside the country, from industrial or other commercial zones, may be exported without any formalities in the country.
• The regional administration is allowed to assign the region to qualified individuals or legal entities after classification and assessment.
• Owners of goods imported into the region may send all or part of their goods for temporary import into the country after passing customs procedures.
• If the processing of imported goods to any extent changes the tariff on the goods, the rate of commercial benefit from the goods will be calculated equal to the commercial benefit from raw materials and spare parts of the country.
• Importers of goods are allowed to transfer part or all of their products to others against a warehouse receipt issued by the district administration. In this case, the owner of the goods will be the holder of the warehouse receipt.
• Each district administration is authorized to issue certificates of origin for each applicant exported outside the district, subject to customs approval.
• All goods imported into the region for necessary production or services are exempt from general import-export laws. Import of goods to other parts of the country will be subject to export-import regulations.
• A certain proportion of goods produced in the zone, based on paragraph (d) of Article (25) of the Law on the Second Economic, Social and Cultural Development Plan of the Islamic Republic of Iran, is imported into the country, the proportion of the total added value and the domestic parts and materials used in the total value of the goods produced is allowed without any restrictions and, in addition, without the need to order and open a letter of credit.
• Goods produced in special economic zones, as well as raw materials and imported CKD components, are not subject to price regulation due to unused resources and allocated currency.

Special Economic Zones of the Islamic Republic of Iran

• Salafchegan Special Economic Zone
• Shiraz Special Economic Zone
• Asaluyeh Special Economic Zone
• Argeh Jadid Special Economic Zone
• Payam Airport Special Economic Zone
• Persian Gulf Special Economic Zone
• Lorestan Special Economic Zone
• Amirabad Port Special Economic Zone
• Bushehr Port Special Economic Zone
• Shahid Rajaee Port Special Economic Zone
• Sarakhs Special Economic Zone
• Sirjan Special Economic Zone
• Special Economic Zone Yazd
• Bushehr Special Economic Zone
• Rafsanjan Special Economic Zone
• Nowshahr Port Special Economic Zone
• Parsi Special Economic Zone
• Imam Khomeini Airport Special Economic Zone
• Bojnoord Special Economic Zone
• Nami Special Economic Zone
• Kaveh Special Economic Zone
• Lawan Special Economic Zone
• Pars Energy Special Economic Zone
• Rey Special Economic Zone
• Zarandieh Special Economic Zone
• Persian Gulf Shipbuilding Special Economic Zone
• Special Economic Zone Sahlan
• Birjand Special Economic Zone
• Dogarun Special Economic Zone
• Petrochemical Special Economic Zone
• Atrak Special Economic Zone
• West Islamabad Special Economic Zone
• Garmsar Special Economic Zone
• Lamerd Special Economic Zone