Encouragement of FDI
Government understands the need for foreign capital. The need for investments, technology, management training and employment. Free trade zones & special economic zones (FEZ & SEZ)
If elected, allowing foreign investment in all sectors opened to Iranian private companies. FIPPA allows for international arbitration in legal disputes. Allowing unfettered repatriation of dividends and capital gains at the current official exchange rate.
No Dividend Tax or Capital Gains Tax in Capital Markets participation
Government to reduce State’s role in the economy from 75% to 25%, across most sectors and industries. Expect $100bn of primary and secondary offerings over the next 5 to 10 years
Challenges to foreign investors
- Awareness and knowledge of sanctions & prohibited terrain
- US Treasury & discretionary, European, UN sanctions
- Limited access to reliable data & analysis
- Low understanding of regulatory environment and policy ambiguity
- Limited access to political and industry network
Higher barriers to entry create the opportunity.
As with any emerging and large economy, Iran has many idiosyncrasies that need to be understood and negotiated by potential investors.
Sentiment and understanding is poor, the first (contrarian) movers will have prospect of significant upside with margin of safety of limited downside.