Tuesday, April 23, 2024

Foreign investment methods in Iran

Foreign  Investment  Methods in Iran

In the project  financing, regarding  the type of  the  project  and  its  related  industry, financial  volume and  required time  for doing  project, conditions  of the  host  country  in terms of  political  and  economical  security and  existing  laws, sensitivity  of the  project  in  that country, there are  different types  of the  project  financing , in  general, as fallows:

In case  of  using  the  internal  resources

  1. The allocation of a  part  of the  country  total  income
  2. The  allocation of a  part  the  earnings  derived  from  the  export

In   case  of  using  the  external  resources

1)Loan  Methods (of  Borrowing)

-Receiving  facilities from  banks  and  foreign  financial  institutions  such  the  World  Bank  and   Islamic  Development  Bank (IDB).

- Financening  such  projectional  financing  like  Finance,Usans   and  Build-Operate-Transfer (BOT)

2)Non-Loan  Methods (Investment)

- Foreign Direct  Investment  (FDI) including  Acquisition  or  Purchasing, Constitution  of the  Firm  Subsidiary  Branch, Joint Venture, Production Participation,Profit   Sharing, Time  Participation.

- Foreign  Indirect  Investment  (FII) including  "Civil  Participation","Buy-Back" and  "Build-Operate-Transfer (BOT).

At the "Foreign  Investment  Promotion  and  Protection  Act (FIPPA), Foreign Direct  Investment  (FDI)  is  admitted, in areas  where  the  activity  of the  private  sector , in terms  of  "The Law  of  Implementing  of  General  Politics of  the  principle  (44)  of  the  constitution.

Foreign Investment in all sectors within the framework of “Civil Participation”, “Buy-Back” and “Build-Operate-Transfer” (BOT) schemes where the return of capital and profits accrued is solely emanated from the economic performance of the project in which the investment is made, and such return of capital and profit shall not be dependent upon a guarantee by the Government or government companies and/or banks (Act 3 of FIPPA).

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