company registration in IRAN

COMPANY FORMATION IN IRAN

Iran also called Persia, and officially the Islamic Republic of Iran is a country in Western Asia. The Government of Iran is an Islamic theocracy that includes elements of presidential democracy, with the ultimate authority vested in an autocratic "Supreme Leader", a position held by Ali Khamenei since Khomeini's death in 1989.

Iran is a regional and middle power, with a geopolitically strategic location in the Asian continent. It is a founding member of the United Nations, the ECO, the OIC, and the OPEC. It has large reserves of fossil fuels—including the world's second-largest natural gas supply and the fourth-largest proven oil reserves. The country's rich cultural legacy is reflected in part by its 22 UNESCO World Heritage Sites. Historically a multinational state, Iran remains a pluralistic society comprising numerous ethnic, linguistic, and religious groups, the largest being PersiansAzeriKurdsMazandaranis, and Lurs.

Iran has got one of the most youthful and dynamic populations in the Middle East. They are quickly earning the tag of being one of the most thriving business communities in the world. Considered as the last emerging business nation in the world, they are slowly but surely entering the global market. It is expected that the current economic framework of Iran will allow it to become the greatest economy in the Middle East and in due time be one of the top trading countries in the world. The return on investment is quite high in Iran.  The normal rate of return inland, telecom, mining, and oil industry of Iran is over 44.9% and the expansion rate of the economy for 2015 was under 14.0%. As consultants, we guide foreign investors on how to register a company in Iran, private limited company, joint venture, and branch office as FDI policy.

With so much going on in Iran, it is no surprise to see how the rest of the world is taking notice of this great country. In fact, the economic stability and limitless potential have created a lucrative deal for foreign investors from all around the globe. They are all planning to set up businesses in Iran and establish their own companies there as well.

 

Foreign company registration in Iran

Limited Liability Company Registration

A Limited Liability Company is characterized as an organization framed by at least 2 people to direct business exchanges and exercises. Limited Liability Company depends on the immediate commitments of the accomplices to the organization and not by offer membership.

The developments of limited liability partnerships are regarded to have occurred when the capital in real money has been completely contributed and when non-cash contributors have been surveyed and conveyed.

The entire incorporation process or registration of the company involves finalizing what the company’s objects will be. It also includes the submission of the required documents of the company which will be registered as a joint-stock company or a limited liability company. The list of requirements includes the following.

. Need to submit formal writing requesting for registration of their company.

. Provide certified photocopies of the articles of association and articles of memorandum. Any other changes made in the company registration of the parent company should also be provided.

. The last audited financial report of the company.

. A feasibility study of the company should be provided. This study should contain all the information related to the activities done by the said foreign company. There should be a detailed explanation as to why the company wishes to incorporate in Iran. A description of the type of activities to be performed by this particular company in Iran should also be mentioned along with the permanent address of operations. As estimated number of local workforce required and ex-pats needed should also be included in this feasibility study. And lastly, the feasibility study must contain a financial sector. Over there it should be clearly mentioned as to how much money is being invested in this company and in what currency. There should be a detailed flow of currency that will be used in the daily operations of the company.

. Introduction of a letter of presentation from a government on the off chance that the branch has been set up for usage of an understanding between the remote organization and that administration element.

. Once all the above steps have been completed and the documents served, the foreign company will have to fill up the Statement of the Registration form.

. The Statement of the Registration form will be followed by filling up the Certificate of Registration. These forms require the official signature of the owner of the foreign company or the signatures of the board of members.

. The Companies Registry in Tehran then requires the Letter of Authorization as well. This is basically the letter that the foreign company has given out to their representatives in Iran. Submission of this letter is crucial and should not be ignored.

. A letter of Undertaking is expected to be provided as well. This letter is the foreign company’s undertaking which states that they shall close down their offices in Iran in case of some sort of violation of the rules of the state. It indicates that the state has the full right to revoke their business license if they fail to adhere to the rules and regulations imposed by the government body.

. The last step that involves the registration requirements of a foreign company in Iran is to ensure that all the documents provided by the said foreign company are certified by all the appropriate authorities. This includes the local registries, as well as being confirmed by the Foreign Ministry of the country from where the foreign investor is from and finally by the Iranian embassy of that country. Once all these have been ensured, the documents mentioned above should be translated into Persian by an official translator. The translator should be certified by the Judiciary. Once the translation is done, all the original documents should be then submitted to the Companies Registry to ensure the proper registration of the company.

 

Registration Requirements and Steps

Establishing a company in Iran is possible if the founders contribute authorized share capital and immediately transfer 35% thereof to an account opened with the Iranian bank. The money transfer to the account must be confirmed by the bank. To register an organization in the official register you need to:

1. Provide the registrar (in the Commercial Register) with a package of constituent documentation, including personal information about the beneficiaries, and encode it with bar codes. Such documentation shall include among others:

  • certificate, TIN;
  • the corporate charter and the decision of the owners to register the company in Iran;
  • orders on representatives and directorate appointment - plus copies of their travel passports;
  • certificate of the parent company's financial status.

The documentation is certified at the Iranian embassy and the translations - at the Ministry of Justice of the country. The representative draws up the power of attorney and signs copies, after that the company can be registered.

2. Pay the fee for the company registration.

3. Publish the notice in the official bulletin and, additionally, in a large-circulation Iranian newspaper after the application consideration and registration.

4. Purchase accounting journals and registers (state seals are put on them).

5. Enter employees into the social insurance system and transfer information about the size of their salaries to the labor department.

 

Tax System of Iran

Evaluating the following tax highlights may be also important for company formation in Iran:

Corporate income tax (CIT) rates – 25%

Personal income tax rate – a progressive scale of rates is applied (maximum 35%) depending on the amount of income

Value-added tax rate – 8%

Withholding tax (for non-residents) – (i) dividends – not applicable (N/A), (ii) interests – N/A, (iii) royalties – 2.5–7.5%

Capital gains tax (for non-residents) – N/A.

 

The list of requirements includes the following

 Need to submit formal writing requesting for registration of their company.

Provide certified photocopies of the articles of association and articles of memorandum. Any other changes made in the company registration of the parent company should also be provided.

The last audited financial report of the company.

A feasibility study of the company should be provided. This study should contain all the information related to the activities done by the said foreign company. There should be a detailed explanation as to why the company wishes to incorporate in Iran. A description of the type of activities to be performed by this particular company in Iran should also be mentioned along with the permanent address of operations. As estimated number of local workforce required and ex-pats needed should also be included in this feasibility study. And lastly, the feasibility study must contain a financial sector. Over there it should be clearly mentioned as to how much money is being invested in this company and in what currency. There should be a detailed flow of currency that will be used in the daily operations of the company.

Introduction of a letter of presentation from a government on the off chance that the branch has been set up for usage of an understanding between the remote organization and that administration element.

Once all the above steps have been completed and the documents served, the foreign company will have to fill up the Statement of the Registration form.

The Statement of the Registration form will be followed by filling up the Certificate of Registration. These forms require the official signature of the owner of the foreign company or the signatures of the board of members.

The Companies Registry in Tehran then requires the Letter of Authorization as well. This is basically the letter that the foreign company has given out to their representatives in Iran. Submission of this letter is crucial and should not be ignored.

A letter of Undertaking is expected to be provided as well. This letter is the foreign company’s undertaking which states that they shall close down their offices in Iran in case of some sort of violation of the rules of the state. It indicates that the state has the full right to revoke their business license if they fail to adhere to the rules and regulations imposed by the government body.

The last step that involves the registration requirements of a foreign company in Iran is to ensure that all the documents provided by the said foreign company are certified by all the appropriate authorities. This includes the local registries, as well as being confirmed by the Foreign Ministry of the country from where the foreign investor is from and finally by the Iranian embassy of that country. Once all these have been ensured, the documents mentioned above should be translated into Persian by an official translator. The translator should be certified by the Judiciary. Once the translation is done, all the original documents should be then submitted to the Companies Registry to ensure the proper registration of the company.

 

Consultation

Our business setup services include company formation and registration services, taxation, accounting & bookkeeping, audit and assurance, legal (Includes Intellectual property law), and branding consultation.

At Business Setup Worldwide, we have an experienced team of professionals, specialized in advising the right kind of business setup considering the need. Our consultants design specific services which help business owners to start a business in a cost-effective manner in their desired location.