Salary

The employment income of employees in both the public and private sectors is taxed at progressive rates ranging from 0 to 20% after deducting a basic annual exemption (i.e. IRR 138 million – for the calendar year starting on 21 March 2015 and ending on 20 March 2016) as presented below:

 

 Salary Tax Rates

 

annual taxable income
    

rates

Up to
    

IRR
    

138,000,000
    

0%

Up to
    

IRR
    

966,000,000
    

10% of the excess over

Over
    

IRR
    

966,000,000
    

20% of the excess over
 

 

The following income is specifically exempted from income tax on salaries:

 

1) Salaries of foreign diplomats, embassy staff, etc. (subject to reciprocal treatment) and non-Iranian members of UN delegations and specialized agencies;

2) Salaries of foreign experts sent to Iran on aid programs;

3) Salaries of local employees of Iranian embassies, consulates, etc. subject to reciprocal treatment;

4) Pensions, retirement allowances and termination of employment payments;

5) Service-related travel expenditure and allowances;

6) 50% of the salary tax of employees working in villages and deprived regions;

7) Housing, on-site accommodation, food and transport allowances and other non-cash benefits provided for manual workers;

8) Compensation from medical insurance, accident insurance, etc;

9) New Year bonuses and year-end allowances up to a maximum of one twelfth of the base annual allowance;

10) Housing provided for civil servants;

11) Employees’ medical expenses met by employers;

12) Salaries paid to members of the armed forces, Intelligence Ministry employees, war veterans and former prisoners-of-war; and

13) Non-cash allowances provided to employees up to a maximum of two twelfth of the base annual allowance.

 

Note that the term “base minimum salary” refers to a minimum salary under the Labor Code. The amount is reviewed annually by the Ministry of Economic Affairs and Finance.

 

In practice, the employment income of foreign workers has often been subject to tax on the basis of a notional scale of remuneration rather than by reference to the actual employment contract. On 11 May 1998, a directive was issued requiring expatriate workers to pay income tax on the total salary, allowances, and benefits earned during the employment period in Iran with effect from 22 June 1998.

 

Expatriate employers are now required to submit full details of the remuneration of their expatriates, plus details of any tax withheld and copies of the relevant employment contracts to the local tax district within 2 weeks of a request by said tax district. The report requires completion of a special specified form, which must be signed by both employer and employee. In the case of non-resident foreign employers, the expatriate is required to supply the information within 2 months of the start of employment.

 

The employment contract must reflect all the benefits included in the employment package. The contract must also be:

 

1) authenticated by the employer’s head office; and

2) verified by competent government authorities and by the Iranian embassy in the country where the employer’s head office is located.

 

Failure to comply may lead to a tax assessment initially on a presumptive basis using specified notional pay scales. If the tax assessed on the presumptive basis later proves to be less than the tax due on the actual remuneration, the additional tax will be assessed and penalties shall be imposed. Tax will be refunded, if the actual remuneration proves to be less than the notional figure.

 

The Council of Ministers also passed a resolution on 17 December 2000, unifying the basis of expatriate salary charges, exchange rates of the contract, withholding taxes and compensation for increases in statutory charges. As a result, the following were implemented:

 

1) The salary tax and work permit charges of expatriates are now computed based on the salaries and fringe benefits reported in the employment contract. The employer is required to report such amounts to the tax authorities, and to the Ministry of Cooperatives, Labor and Social Welfare;

2) If the expatriates salary and fringe benefits are not specifically mentioned in the employment contract, the basis for computing the salary tax and work permit charges will be via a "unified list" which is to be prepared by the Ministry of Cooperatives, Labor and Social Welfare together with the relevant ministry or employer. This list must also be approved by the Council of Ministers; and

3) The exchange rate to be used when computing the tax and work permit charges is the rate stipulated in the employment contract unless the employer purchases the hard currency at a different rate, in which case the actual rate will be used.

 

No expenses are specifically listed as deductible in arriving at income subject to the tax on salaries. Direct Taxes Act does, however, provide for the general deductibility of two categories of expenditure in arriving at the taxable income of individual taxpayers. The two categories are expenses incurred during the tax year on medical treatment of the taxpayer himself, his wife, children, parents, brothers, or sisters and life insurance premiums paid to Iranian insurance companies.

 

Also, as of 21 March 2001, employees may deduct from taxable income any payments made for housing loans, provided:

 

1) the relevant home must be less than 120 sq m in area and must be purchased or built between March 2000 and March 2004; and

2) the employer must be provided with a statement from the relevant bank confirming the amount of the monthly installment payment and the period of the loan.

 

The tax on salaries is collected by deduction at source. Employers are obliged to calculate and withhold the relevant tax on the basis of the employee’s annual salary (where the payer of an amount subject to the tax on salaries is not the payer of the recipients’ basic salary, wage, etc., he must deduct the tax at the rate of 10%.) The tax so deducted must be sent to the local tax affairs office within 30 days together with a list of the names and addresses of the payees and their respective salaries in the first month. For subsequent months, only changes to the original list need to be reported. Persons receiving a salary paid from abroad are required to pay the due tax within 30 days of receiving it and to submit a tax return by 22 July of the year following the fiscal year in which the salary has been received.

 

Exit visas and extensions of residence permits and work permits will only be issued to foreigners on production of a tax clearance certificate. However, pursuant to a resolution issued by the Council of Ministers on 17 December 2000, the employer is permitted to make a contractual commitment to withhold and remit the expatriate’s tax liability to the tax authorities, and the expatriate will not be barred from leaving the country, when such a contractual commitment has been entered into force+, even if the taxes have not been settled.

 

In cases where the salary tax is not accounted for in accordance with the requirements outlined above, the Act provides for the making of assessments to include both the tax due and the applicable penalties. Such assessments are final and conclusive and the tax and penalties must be paid within 30 days unless an appeal is submitted in writing within the same time limit. The penalty for failure to comply with salary tax withholding requirements is a fine equal to 20% of the unpaid tax. In addition, the employer or the director(s) of the employing enterprise may be imprisoned for terms ranging from 3 months to 2 years. Claims for the refund of an overpaid salary tax must be made by the recipient of the salary to the tax affairs office local to his place of residence.

 

Benefits in kind

 

The assessable value of benefits in kind is normally the cost to the employer but in the following cases the assessable value is calculated as a percentage of salary and other regular remuneration paid in cash (net of deductions):

 

1) Furnished housing: 25%;

2) Unfurnished housing: 20%;

3) Chauffeur-driven car: 10%; and

4) Car without chauffeur: 5%.

 

Pension income

 

Pensions, retirement allowances, and termination of employment payments are exempt from taxation.

 

Directors remuneration

 

Directors remuneration is added to their annual salary obtained from employment payments and is subject to tax.

As you may know ,Foreign nationals are prohibited from working in Iran unless they receive work and employment permits (even if they are supposed to receive wage and salary outside the Iranian territory). The work permit serves as the employment license for the foreign nationals in Iran.

We are here to help you

The work permit for the employment of foreign nationals in Iran is issued by the “Department General for Employment of Foreign Nationals” (also called Department for Employment of Expatriates) of the Ministry of Cooperatives, Labor and Social Welfare upon a request by Iranian employers. In provincial capitals it is issued by the Foreign Citizens Divisions of the Department General of Cooperatives, Labor and Social Welfare. (The general procedure for admission of foreign investment has been brought separately in the following part.) The Iranian employers are obligated to seek the permission of the Department General for Employment of Foreign Nationals before concluding any contract that may lead to the employment of foreign citizens in Iran. The rules and regulations for acquiring work permit for the foreign nationals are available in the Labor Law of the Islamic Republic of Iran, ratified in 1990 (articles 120 through 129 and executive bylaw of Article 129). Although due to abundance of educated job-seekers in the country and for the purpose of reducing unemployment rate of the educated and skilled job-seekers the Technical Board for Employment of Foreign Nationals has strict rules and regulations (stipulated in Article 121 of Labor Law) for issuance of work permits, the Foreign Investment Promotion and Protection Act (FIPPA), passed in 2002, has considered promising provisions for issuance of work permits for foreign investors, managers and experts in relation with the investments under FIPPA.

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Around five to six million Iranians are living overseas, constituting 7% of the total population of the country.
Figures on their wealth are unreliable, as different sources release widely divergent numbers, Forsat-e Emrooz daily reported.
In March 2007, the Iranian Parliament Research Center, citing National Elites Foundation, put the capital assets of Iranian expatriates at over $1.3 trillion and those of Iranian-Americans alone at over $900 billion.
More than 6,500 companies and 10,000 university students were living in Dubai then and 1,400-odd Iranians have invested in Dubai Stock Exchange.
In January 2014, Alireza Rahmatnia, a deputy vice president, put Iranian investments abroad at around $700 billion, $200 billion of which were concentrated in the UAE alone.
In June 2015, Javad Qavam Shahidi, a senior official with the Iranian Expatiates Affairs High Council, mentioned an estimated $2 trillion as the wealth of foreign-based Iranians.
The interesting point is that this amount exceeded the country’s GDP in 2014 and that absorption of just 10% of this potential capital could work miracles for the country’s economy.
This is while the outflow of capital from the country is not unlikely. Rich Iranian investors are expected to put their money into buying real estates across the world.
Research by Rockstone Real Estate shows Iranian merchants and millionaires are highly likely to purchase real estate worth £6 billion within five to 10 years following the removal of nuclear sanctions.
London, Dubai, Switzerland, Germany and France are the odds-on favorite to become their destinations, the report reads.

Hungary's state-owned oil and gas group MOL has indicated preparedness to join oil projects in Iran by the adopting enhanced oil recovery (EOR) and improved oil recovery (IOR) techniques, a senior Iranian oil official said.

Following a meeting with MOL deputy chief executive officer, Berislav Gaso, in his Tehran office on Wednesday, Deputy Petroleum Minister in International Affairs and Trading Amir Hossein Zamani Nia said the company has over 70 years of experience in the field.

Zamani Nia who hosted the meeting with the Hungarian energy delegation, which was headed by Janos Kovacs, the Hungarian ambassador, said MOL is keen on establishing long-term partnership with Iranian energy companies.
“Presence and partnership in natural gas export projects in Iran and construction of gas pipelines were the main areas MOL has shown interest to work in Iran,” the official said.

Furthermore, purchase of liquefied petroleum gas (LPG) and partnership in refinery, liquefied natural gas (LNG) and NGL projects are other areas that MOL has indicated readiness to work in Iran, he added.
MOL is operating in oil and gas projects in 33 countries.

The company has also purchased a crude oil cargo from Iran which is being consumed by Hungarian refineries, said Zamani Nia.
Prior to the meeting, the Hungarian delegation met with Managing Director of the National Iranian Oil Company (NIOC) Ali Kardor.

Iran Mercantile Exchange has published its first ever English annual report for the fiscal year ending March 19, 2016.
According to the report by the IME’s International Affairs and public relations office, the IME’s first English annual report for the fiscal year ending March 19, 2016 presents to the general public the IME’s position in national economy and its role in creating a competitive, transparent and productive market as well as developing financial instruments, implementing new financial instruments to expand IME's scope of activities and preparing the groundwork for IME with an aim to gear up for more international relations and the necessity of publicizing related information.

With that in mind, the report includes the IME’s General Data, Organizational Structure, General Trading Data, Financial Data Summary, Board of Director’s Message and CEO’s Post, IME’s History, Field of Activity and Strategies, Vision and Mission, Capital and Shareholders, Legal Environment of IME, IME’s Function in 2015, Key Highlights and Best practices, The Market Status and Trading Statistics, Commodities, Suppliers, Commodity-based Securities and Listed Warehouses, Active Brokers and Brokers’ Performance, Company's Financial Position, Comparison between Actual Results and Budgets, IME’s Governance and Management Structure, Board of Directors and Human Resources, Priorities in 2016 (1395) and finally Financial Statements, Independence Auditor’s report and explanatory Notes.

The PDF version of the annual report 2015 is accessed here.

Imtiaz Developments, a prominent real estate developer known for its boutique and innovative projects, has appointed the National Engineering Bureau (NEB), a leading engineering firm with over 39 years of experience, for an upcoming residential community project in Dubai Land Residential Complex.   

Source:

https://www.constructionweekonline.com/

 Iran’s crude oil exports to India in March 2016 surges from 290 to 505 thousand barrels per day turning the South Asian country into Iran’s second largest oil customer.

During sanction years, India purchased about 20 per cent of Iran’s oil exports equal to an average of 200 thousand barrels per day.

Following the implementation of the Joint Comprehensive Plan of Action (JCPOA), India increased its oil imports from Iran as Indian refineries have made new oil purchase proposals.

The surge in oil exports marks a significant achievement for the Iranian government in development of activities in regional markets after the removal of sanctions.

In March 2016, India’s Essar Oil refinery ranked first in importing crude oil from Iran while Mangalore Refinery and Petrochemicals Limited (MRPL) stood in the second place.

Also after a six-year hiatus, Reliance Petroleum Limited of India purchased a shipment of oil condensate produced at Iran’s Forouzan oilfield.

On the basis of a report released by Iranian Ministry of Oil’s Office for OPEC affairs and relations with energy organizations, the average volume of India’s imports from Iran reached 4.35 million barrels per day in the first three months of the year 2016 indicating a 500-thosand increase as compared to same period a year earlier.

Iran remains as the third supplier of India’s oil demands following Saudi Arabia and Iraq.

The South Asian country’s imports from Iran reach a total of 505 thousand barrels in March revealing a 290-thousad growth as compared to February, 2016.

Currently, Iran ranks third among oil exporters to India while at the beginning of 2016 the country only stood in the sixth place.

Recently, Reuters touched upon Iran’s oil exports to India reporting “India’s crude oil imports from Iran have reached more than 500 thousand barrels per day marking the highest level in the past five years.

By Farshad Alikhani

Oil and gas 'Common Fields Development' (CFD) is a strategic consideration for the owner governments. Any owner government, despite its national, political and sectorial tendencies, has always emphasized its deliberations to CFD to promote its national interests.
In other words, there is no disagreement on the issue among any sovereign state's political and economic elites. This consensus has realistically been an opportunity to pursue an effective roadmap to CFD and defend hereby the actualization of international common interests. There are some challenges for some countries in common oil and gas fields' development.

In this context, if the question is why sufficient and acceptable results to maintain international interests in some certain common oil and gas fields have not been fully realized yet, in comparison with other satisfactory benchmarks in some regions, then the following analysis may briefly contribute to the explanation of different aspects of the issue and proposing some remedies to treat the CFD underdevelopment syndrome for the actualization of their on-time and effective collaborations.
Joint development of oil and gas resources among oil and gas-rich countries is of great importance in the era of ever increasing need for co-sufficiency and collaboration. There are pessimistic, as well as, optimistic approaches to oil and gas CFD. I do believe in 'Realistic Optimism' as a sound approach to analyze current and future trends in oil and gas CFD and hereby briefly explain different aspects of CFD.

Role of visionary leadership & energy diplomacy
The politics of cooperation governing CFD is a critical dimension of the issue. Political attitudes of the players may accelerate or hinder the pace of co-operations. A win-win attitude brings about peaceful adjustment of conflicts and can strategically lead to common interest's fulfillment. Other win-lose or lose-lose approaches have been repeatedly adopted by some players in certain circumstances, which past experiences have frequently shown that the defeated parties pursue routes to remunerate the undesired results.

Hence, the adoption of win-win approach can strategically benefit all in the long-run. I do believe that emphasizing on the principles of 'Continuous Dialogue', 'Good Intent', 'Sincerity', 'Purposefulness' and 'Mutuality' is a must for the involved stakeholders. It will, with more likelihood, lead to peaceful adjustment of probable disputes or conflicts. This necessitates on its own turn, the observance of international legal frameworks and traditions.
Negotiations can act as serious means to resolve likely disagreements in a peaceful and friendly manner. The observance of these principles brightens the horizon of common interest's actualization. The security issue is another aspect of the matter. Engaging collaboratively to safeguard common resources can reduce the probability of conflict and can act as an effective mechanism to conflict resolution and hence, contributing to a more secure atmosphere.

The challenge of 'Unified Leadership' has to be handled through adopting collective mechanisms such as establishing a 'CFD Leadership Committee'. This helps to bring about change in the shortest period of time. This committee has to work closely with 'CFD Operational Committee' which follows the effective and timely operationalization of the policies adopted by the leadership committee.
There are various approaches to CFD which I call here as 'Balanced-Developmental Approach' (BDA), which emphasizes the development of all phases of a certain oil or gas field, and 'Imbalanced-Developmental Approach' (IDA), which concentrates on certain prioritized phases of a certain oil or gas field. Each approach has normally its opportunities and deficiencies, if is seen in a real strategic and operational and technical context. There are many reasons regarding when and how to apply IDA or BDA, but the role of governors' 'economic, political, developmental and technical attitudes', besides 'situational contingencies' are important factors to consider among the others, which the leadership committee can decide upon.

Accountable and flexible management
There are some managerial obstacles which may hinder and slow down the pace of CFD. There are some managerial considerations to facilitate the effective CFD. Cooperations lead to the efficient utilization of common oil and gas resources and herby to strategically manage common fields in the long-run. Establishing consortiums for more productivity is a mechanism in this regard. The establishment of 'Joint-Ventures' or 'Common Commissions' for deepening interim co-operations is a widely used recipe to speed up the timely joint-implementation of common projects in a certain common field. Such mechanisms help either to share resources, or diffuse managerial and technical expertise and experiences by the involved parties. As a matter of fact, Outsourcing oil and gas projects to 'Real Private Sector' or 'Real Semi-Private Sector' of the involved governments can synergize the overall shared capabilities.

Responsive, cohesive, ethical and accountable management for CFD is a strategic requirement to respond to the developmental needs of the industry and to foster 'Meaningful Change'. Accountability of management towards the achievement of CFD goals in a definite period of time seems to be one of the most vulnerable managerial issues. The appointed bodies by the leadership committee are responsible to accomplish the determined goals. This managerial mechanism promotes the accountability of delegated bodies for their performance. The leadership committee shall be informed on the progress to help lead the overall process. Issues such as 'Early-Production' can be considered as strategic issues by both committees to respond to market demand, if it has reached to disequilibrium. These mechanisms, if implemented effectively, will treat what I call 'The Projects Completion Syndrome' (PCS). Flexible management is a prerequisite to foster requisite leniency in all phases of the development process.
Proactive investment & finance: Key to financial success

The third issue is the effective and timely 'Financing' CFD projects. Close coordination with national parliaments, domestic and international financers are suggestible mechanisms for the harmonization of all CFD efforts. Joint-financing CFD can be achieved through establishing a 'Joint-Financing Committee' (JFC) to foster necessary changes.
Technology, methods and equipment

Technological issues are enough important to cite for promoting CFD efforts. New financial, operational and managerial methods have to be exercised by the involved stakeholders to speed up the effective utilization of common oil and gas fields. Supporting strategists, technologists and manufacturers have to be put on the technology development agenda; procurement from international markets must simultaneously be on the fore of the efforts. The adoption of new technologies for operational efforts such as 'Directional Drilling' or 'Radial Drilling' is of strategic importance for CFD.
New legal frameworks, contracts as catalyzers

Establishing and application of a diversified set of 'Contracts' is another challenge for the involved partners. To initiate new legal frameworks, CFD must be streamlined by a closed harmonization with respective national governments or parliaments and a composition of independent expert groups and institutions.
New frameworks must either actualize the interests of the involved actors who engage in CFD efforts. What I call as a win-win 'Financial Gains Portfolio' (FGP) for the engaged parties can be assumed as the core point of CFD agenda. There will be a real need to review and reorganize present legal frameworks to promote the unity of efforts and interests in CFD. New elaborated contractual and legal frameworks pose serious implications on motivating giant financers and investors.

National interests as well as other stakeholders' interests must be observed, in a broader context, through developing a 'Comprehensive Interests Basin' (CIB) to convince all involved parties to be able to gain what they are pursuing in their interim co-operations. Establishing an expert committee to address potential neglects on contractual issues is important to prevent misunderstandings, resolving disputes or probable corruptive behaviors, which in many cases, seem to be inherent in some oil and gas deals.
Strategic human resources management: The heart of petroleum sector management

Strategic human resources management (SHRD) is a strong commitment for effective CFD efforts by the engaged partners. Adopting an effective and meaningful 'Human Resources Management' (HRM) system based on scientific measures such as 'Performance-based Management' (PBM), or 'Competency-based Management' (CBM) can act as an early-productive mechanism to promote the morale of craftsmen in common oil and gas fields. Human factor is 'the most important element of joint-productivity'.
Co-operative 'intergovernmental relationships' are important for developing common strategies for CFD to maximally increase Returns on Investments (ROIs). For this to happen, the involved stakeholders may find ways and means to legally, politically, managerially and technically evaluate pitfalls and provide time-saving remedies to safeguard common interests through CFD in a broader internationally cooperative and strategic framework.

Overcoming political and more importantly, technical barriers for effective CFD is a liability which can be realistically managed through mobilizing mutual capabilities and initiating visionary leadership, through energy management and diplomacy. The effective implementation of CFD schemes can be achieved through a comprehensive mobilization of common capabilities and engaging in energy diplomacy and multilateral dialogues among the involved stakeholders.

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Iran's minister of roads and urban development  believed that  the willingness of world's major firms to invest in Iran following a lasting nuclear deal between Tehran and world powers.

Abbas Akhoundi further explained  industrialized and developed countries have expressed willingness for presence and investment in Iran in various fields, including aviation industry, railways and high-speed trains.

He added the increase in demand for contributing to the Islamic Republic's projects shows that the grounds have been set for more business interaction between Tehran and other countries following the removal of sanctions.

This will attract more funds from foreign firms, Akhoundi concluded .

On July 14, 2015, Tehran and the P5+1 (Russia, China, the US, Britain, France and Germany) finalized a comprehensive deal on Tehran's nuclear program and implemented it on January 16.

The comprehensive nuclear deal, also known as the Joint Comprehensive Plan of Action (JCPOA), terminated all nuclear-related sanctions on Iran.

Although investing in Iranian funds is broadly prohibited for US investors, for Europeans, it can be done—within limits—following the lifting on Jan. 16 of nuclear-related sanctions imposed on Iran by an international coalition.
And the strong showing of Iranian moderates in national elections last month may encourage further interest in the country.
Iran has a large, diversified economy and a stock market, and there are new funds that allow some global investors to put their money there, reads an article in The Wall Street Journal.
However, American individuals and entities are still prohibited from nearly all dealings with Iran, with limited exceptions such as the export of food and medicine to the country. That’s because of US sanctions still in place.
European investors have a much freer hand, but they need to be wary of some remaining European Union sanctions. In addition, even people who are not American citizens or living in the US are subject to certain remaining US sanctions—for example, prohibitions against dealings with designated Iranian individuals and entities.

  A New Fund
In anticipation of greater international interest in Iranian stocks, the Turquoise Variable Capital Investment Fund was launched in December. Jointly managed by Turquoise Partners, an Iranian financial group, and London-based Charlemagne Capital, the open-ended fund invests predominantly in Iranian stocks, and is aimed at all non-US investors.
It has about $55 million in assets and its holdings include some locally listed corporate bonds, but its long-term goal is to hold only equities.
“Most of the money in the fund was transferred from a similar fund that Turquoise Partners ran on its own for 10 years. There has not been enough time since the lifting of the nuclear-related sanctions for the fund to see significant inflows in reaction,” says Dominic Bokor-Ingram, Charlemagne Capital’s portfolio adviser for frontier markets.
Bokor-Ingram noted that Iran’s established stock exchange gives it an advantage over other frontier markets for investors.
“If you look at the biggest frontier, emerging-market opportunities right now that people quote—Cuba, Ethiopia, Myanmar—the difference in Iran is that you have a big, functioning stock market and a very big economy of approximately $400 billion,” he said.
  Iran’s Increasing Wealth
The portfolio adviser noted that the fund is seeking to tap into Iran’s consumer market, with sectors like banking, telecommunications, healthcare, housing and e-commerce prominent among its holdings—“anything that’s geared to that domestic economy and the increasing wealth of the population.”
Bokor-Ingram said there is “almost zero foreign investment” in Iranian stocks. But he says there has been an increase in expressions of interest in the new fund from potential investors and he expects investment in the fund to pick up in the coming months.
Turquoise Partners’ CEO Ramin Rabii said that over the past 18 months, he has hosted more than 150 delegations of foreign investors, ranging in size from two or three people and up to 30 or 40.
Most of these were from European countries, he said, though there were others from countries in the region such as Turkey and the UAE.
Turquoise also runs an exchange-traded fund, the Turquoise TSE 30 Iran Index ETF, which tracks the 30 largest companies on Tehran Stock Exchange. It is targeted at small, individual investors, Rabii says, and has seen interest from investors in the region, as well as some in East Asia and Russia. It has assets of about $3 million.
Rabii says Iran is similar to Turkey in a number of ways, such as population size, but that while foreign investors are major players in Turkish stocks, “in Iran it’s less than half a percent. That just shows you the potential of foreign investment that can come to Iran.”
But much has to change before Iran can reach that potential. For instance, Rabii notes, many Iranian companies publish their financial statements only in Persian.
Still, other funds are testing the waters, too.
London-based Sturgeon Capital, in a partnership with Iranian brokerage firm Mofid Securities, launched a hedge fund in December that invests in companies listed in Iran, though it could broaden its portfolio to include the shares of companies outside the country that do business there. It currently has less than $10 million in assets.
Sturgeon Capital’s CEO, Clemente Cappello, said he aims to target Iranian companies that have the potential to export to the company’s middle-income neighbors—such as Turkmenistan and Iraq—and highlights the glassmaking sector as having strong potential in this regard.
Cappello says he does not expect a rush of investment in the fund soon. And on a broader scale he expects many banks to remain cautious for the foreseeable future about handling the transfer of investors’ money into and out of Iran.
That point is echoed by Daniel Martin, a partner at Holman Fenwick Willan, a London law firm with a focus on international commerce.
“I think anyone who is looking to persuade a bank or financial institution to make a payment into Iran or receive payment out of Iran is finding it difficult at the moment to identify financial institutions that will support those transactions,” he said.
In a recent note, Renaissance Capital’s head of equity strategy, Daniel Salter, pointed to a number of challenges in the Iranian market, including a lack of updated economic statistics, and a trading week that runs from Saturday to Wednesday.

by:keith kohl

Countries already vying for business in Iran's wind sector.

Talk of investment in Iran more often than not is centered around its oil and gas sector—after all, the country has some of the highest reserves in the world, and is preparing to rejoin the market this year.

But did you know Iran is also planning some major steps into the renewable energy market too?

The Iranian government already has a project in the works: the 6th Development Plan lays the groundwork for installations of about 4,500 megawatts of wind energy and 500 megawatts of solar energy capacity.

Just last week, a 250 kilowatt solar panel project was brought online, and as much as 15 gigawatts of energy capacity installations are being considered by the Renewable Energy Organization of Iran.

The organization's Mostafa Rabie suggests, “Iran can supply over two-thirds of its energy through wind power. The long-term policy within the next decade... is to supply over 50% of required energy through... green technologies.”Iran Wind Power

He does note, however, that investment in the sector is absolutely necessary before any of these goals can be achieved.

To reach the required renewable capacity of 5000 megawatts, Rabie claims, will take $10 billion worth of investments. There are already more than 19 proposed projects that will cost $1.5 billion to move forward.

Luckily, Iran already has a few parties interested in its renewable sector...

Denmark is interested in exporting renewable technologies to Iran, especially wind power equipment. The country's Foreign Affairs Minister Kristian Jensen has said that such exports could grow by as much as $72 billion once sanctions on Iran are lifted.

This may include wind-turbine manufacturing plants from which Danish companies can build and market their products in and out of Iran.

India is another country ready to move into Iran's energy sector. The country's Suzlon Energy is a major global wind turbine supplier, and has expressed interest in building wind farms in Iran post-sanctions.

Such projects may in fact find competition from German companies also looking to build in Iran. German Siemens has already signed a deal to invest in Iran's railways, and intends to also supply the country with wind turbine equipment.

Iran has plenty of options when it comes to outside investments in its energy infrastructures, both fossil-fuel based and renewable.

Only time will tell how many of these projects are actually brought to fruition.

Director of Production Control in Iran's National Petrochemical Company (NPC) Alimohammad Bossaqzadeh said that there are Investment opportunities for foreign investor in petrochemical sector .


“Foreign investors have voiced readiness to back completion of petrochemical projects in Iran and related negotiations are taking place,” he added.
According to the NPC director, the Iranian government prefers to attract the foreign finance in form of investments and via making joint venture with Iranian partners.
The Islamic Republic drew up 30 new petrochemical projects to be implemented in the post-sanctions time, Marzieh Shahdaie, the managing director of NPC, said in an exclusive interview with the Tehran Times in January.
Questioned about the status of Iran’s petrochemical sector for the attraction of foreign investment in the post-sanctions time, Shahdaie answered that foreign companies mainly from Europe and East Asia are seeking to make investment in the implementation of Iranian petrochemical projects now that the sanctions are being removed against the country.
She mentioned Iran’s huge reserves of energy, its strategic location as well as domestic capabilities and expert manpower as the country’s advantages for the attraction of foreign investment.

Technical and economic benefits of distributed generation for the Ministry of Energy of Iran are obvious. Therefore, in order to decentralization of power generating units, improve network reliability and increase efficiency, "Development of distributed generation project" is planned. The policy of the project to increase power generation in distribution network is incentives facilities offering to private sector.  In this paper, the Ministry of Energy incentive policies are followed.
Among the various technologies of distributed generation, due to higher generation and reduce gas consumption, combined heat and power (CHP) have more appropriate economic indicators and the willingness of the private sector to invest in this project is more.
Therefore, we  present an overview of the investment opportunities, government incentives and expressing examples of combined heat and power(CHP) projects, to inform investors and to achieve purposes mentioned in this plan.


 

Description of investment and government incentive policies
Investment overview:
Installation Combined heat and power generation (internal combustion engines, generators and heat recovery facilities).





         Components of investment cost    
    installation initial cost
    maintenance costs
    Personnel / oil filter / lost revenue due to generation interruption
   









 Government incentive policies



 

 The advantage of investment and economic indicators
Most important advantages of investing in energy generation are Government support in providing free gas and guaranteed power purchase. The following components of income and investment cost of CHP generators have been described.
Incomes:
 Sale of electricity to the grid (or sale to domestic consumption)
Depending on the efficiency between 2.57 to 3.14 cent/kWh, Electric power generators purchased and the guaranteed purchase contract will be signed to 5 years. The invoice paid by Ministry of energy in less than 15 days.
Gross income for 1 MW generator: 20,000 US$/month.


Use of generator heat in production or in reduction fuel consumption:
The use of generator heat utilizes based on potential region. Usually the heat generators used in the following processes:
    Production of carbon dioxide from the generator smoke (200 kg/hour  for 1 MW generator-price 114.28 US$/ton)
    Production of distilled water
    Cold production in absorption chiller and injection into the fridge (300 ton of refrigeration per 1 MW generator)
    Heat and carbon dioxide production and injected into greenhouses to accelerate growth.
    Hot water production for swimming pools and domestic consumption (70 cubic meters/hour per 1 MW generator)

 Sale Emission Right:
According to the efficiency cogeneration generator, yearly 3000 tons of greenhouse gas emissions can be avoided per 1 MW installed capacity. According to Kyoto Protocol, the project as a friendly environment project registered, and based on Emission Right price in the global market (average price was  2 US$ in 2014, and Predicted be 5 to 10 US$ in 2015),is profitable up to 10 years.

Costs:
Initial costs:
    Generator and grid connection equipment: 600,000 US$/MW (Stock generator: 314,000 US$/MW and Used generator with guarantee: 200,000 $/MW)
+The costs of heat recovery equipment+ Recovery of costs of land acquisition/ lease +the project registration fee as environmentally-friendly.
Monthly costs:
    Fuel cost: 5,000 US$/MW (This cost is monthly statement and paid by TAVANIR, See the attached documentation)
    Oil and filter cost: 1,400 US$/MW
    Personnel costs (for the whole site): 3,000 US$ (This is not a separate cost for industrial sites)
Estimation of costs and revenues of the CHP system for each project according to characteristics and potential of the site is a free service of Distribution Generation Development Center.










Silencer units (reduction of noise up to 60 dB – equivalent to a car)




Summary table of costs and benefits of 1 MW generator installation:

Initial costs    Revenues
New generator    Stock generator    Used generator with 6-month guarantee    Power generation    Using of heat
600,000 US$    314,000 US$    200,000 US$    20,000 US$/month    Depending on the application of unit is variable
    Electric power generation revenue can be increased 50% by selling energy to commercial customers.
    With the increase in electricity tariffs in 1394, revenue will increase.

    period of return on investment (Month)
    With using heat of Generator    Without using heat of Generator
Using the new equipment    20    32
Using the Stock equipment    10    15
Using the Used equipment    6    10

For a Used 1 MW generator:

 






Investment Process
 


Conclusion and call for consultation
Niroo Research Institute to facilitate investment in the development of CHP generators provides all services to small-scale plants investors with the aim of increasing penetration of combined heat and power generators, increasing efficiency and peak shaving of the Network.
    Issuance Agreement, construction and operation permit, obtaining permits and certificates, contract of guaranteed electric power purchasing.
    Coordinate the activity of attract participation units in regional electric companies and electrical distribution companies.
    Condition assessment tests, performance testing and Maintenance Planning.
Free consultation services to investors in great Tehran:
    Feasibility consultation, technical-economic evaluation of projects, investment consulting.
    Finding the optimal place for generator installation and heat recovery.
    Introduction of qualified consultants and contractors to design and implementation of CHP units.

Managing Director of Germany's Klifovet Pharmaceuticals Company Klaus Hellmann underlined that Iran is a suitable country with abundant capacities for foreign investment.
'Given Iran's advances and scientific capacities, Iran has good capacities for investment,' Hellmann said Friday on the sidelines of the Third International Pharmaceuticals Congress hosted by Shahr-e Kord.

He said that Iran has many capabilities and capacities for advancement and the papers that have been presented by Iranian researchers to this congress shows that the Iranian researchers are at a good scientific level.

'There are many people in Germany who are willing to be present in Iran and they have scientific exchanges with Iranian researchers; we expect that these exchanges to be prepared more than any time before,' Hellmann added.

He said that several joint ventures between Iran and German companies have taken place.

The Iranian steel industry is pushing ahead with its ambitious plan to become the world’s sixth largest steelmaker as per its 2025 Vision Plan. New crude steel and raw material output capacity are being added every year and production is following a growing trend.
Maintaining a steady growth to realize the target is a complicated task. The raw material supply is unbalanced across the spectrum, production is growing at a slower pace compared to capacity-making, steel usage is falling and exports need to increase further.
For the last two years, Foolad Tehnic International Engineering Company has been studying the Iranian steel market and industry, and reporting on the expansion progress at the request of various companies and organizations. FIECO’s project is titled “Monitoring the Comprehensive Steel Plan.”
The Comprehensive Steel Plan was first floated in 2004 and integrated into the Fourth Five-Year Development Plan (2004-9) the following year. The plan was revised in 2007 under the title “Iran’s Industrial Development Strategy,” in which the 55-million-ton output target was first introduced.
The macro-planning did not exactly go as expected, as more than a few issues such as the imbalance in steel production chain surfaced.  Accordingly, FIECO stepped in to monitor the industry and provide a detailed report of its shortcomings. Its second report on the steel plan was published in early June.
 Unbalanced Steel Production Chain
The first part of the report indicates nominal steel and raw material capacity and real output during the previous four years, from 2013-14 to 2016-17.
Nominal crude steel capacity remained unchanged at 22.5 million tons for the first two years of the period. It increased to 23.7 million in the third year and jumped to 29.8 million tons in 2016-17.
Also, 4.82 million tons are expected to be added to the capacity by the end of the first half of the current fiscal year (March 21-Sept. 22). Crude production experienced a seesaw trend, as it stood at 16.10, 17.54, 16.7 and 18.51 million tons during the four years respectively.
As for direct-reduced iron, capacity grew steadily, standing at 19.65, 22.15, 22.3 and 24.45 million tons respectively. It is bound to grow by another 6.4 million tons by the end of the first half. And with the exception of 2015-16, DRI output grew an average of 1 million tons every year to 18.51 million last year.
Struggling with pellet shortage and the necessity of imports was a common theme for mills in the past. Statistics indicate that pellet production capacity remained nearly unchanged from 2013-14 to 2015-16 at 22 million tons. However, it rose to 32 million tons last year and will have 8.22 million tons added to it as a host of new plants are set to come on stream by late September.  
The output of such a highly sought-after material was mostly close to its capacity, standing at 20.76, 21.57, 21.50 and 25.62 million tons respectively.
The imbalance in production chain can be witnessed in the case of iron ore concentrate, where expansion happened too rapidly and left behind pellet development.
Concentrate capacity rose by about a million ton to reach 30.27 million tons in 2014-15 and suddenly jacked up to 43.4 million tons the next year where it stabilized.
The sector also has 2.2 million tons of capacity coming its way soon.
As for production, stats indicate it barely had time to react to sudden capacity boosts and was about 13 million tons less than last year’s capacity.
 Raw Material Needs
According to FIECO, Iran will require production capacities of 168 million tons of iron ore, 86 million tons of concentrate, 87 million tons of pellet and 57 million tons of DRI to be able to materialize a 55-million ton steelmaking capacity.
By analyzing Iran’s development projects, FEICO has calculated the current capacity, the best-case scenario added capacity and the deficiency in each sector.
There’s currently an 80-million-ton iron ore output capacity in place and if all the expansion projects the government has announced were to come on stream, the number would rise to 130 million tons. A 38-million-ton shortage to reach 2025 target still looms large.
As for concentrates, deficiency stands at 16 million tons, as in the best case, a 26-million-ton capacity will be added to the 44 million tons already in place.
Pellet is doing better since the potential upcoming capacity of 45 million tons is larger than the current 38-million-ton capacity. That would leave pellet-makers with 5 million tons to add.
And DRI deficiency is projected to stand at 9 million tons. Potential upcoming capacity is 20 million tons and current capacity is 28 million tons.
FIECO projects that €8.98 billion of investments are required to cover the deficiencies and reach the 2025 steel target. The total numbers break down to €3.78 billion of investment needed for crude steel capacity-making €1.653 billion for DRI, €1.304 billion for pellets and €1.969 billion for concentrate.
Moreover, €14.07 billion will be needed to develop the industry infrastructure. Railroad developments account for €4.8 billion of the aggregate figure, €4.26 billion for electricity, €1.91 billion for water, €1.3 billion for ports, €980 million for mining equipment, €560 million for roads and €268 million for gas.
 The Necessity of Exports
Another part of the 2025 target projects exporting 20 million tons of steel, as the whole 55 million tons are simply beyond Iran’s local demand.
A combination of galloping inflation, economic sanctions and the ill-famed Mehr Housing Scheme caused mortal harm to Iran’s construction sector, and consequently to steel demand.
Many steelmakers, especially long producers, are struggling to find buyers for their goods and look at exports as the only way forward. The scenario at home is unlikely to change until 2025, which further underscores the necessity of exports.
According to FIECO, Iranian semi-finished steel exports have followed an upward trend ever since the 2013-14 fiscal year, reaching from about 300,000 tons to nearly 4 million tons last year. Finished steel shipments nearly set the same record, with exports only dropping about 300,000 tons to 1.99 million tons last year.
The report envisions three scenarios for Iran’s steel export expansion. The first considers maximum export potential, calculated using Iran’s trade track record and destination markets’ potential demand, which stands at 9.5 million ton/year.
The second is based on Iran’s share of the global steel market, putting the number at 11.2 million tons/year.
And the third most optimistic one is based on the industry’s average growth in exports for the last five years, which brings the number up to 16.6 million tons/year.
All three scenarios would yield results far from 20 million tons/year, but boosting exports by any means necessary should still be on top of the industry’s agenda.
 Call for More Large-Scale Production
Out of the current 29.7-million-ton crude capacity, 3.3 million tons of it pertain to plants with capacities of 200,000 tons and less, which predominantly utilize induction furnaces. The small-scale plants offer lower prices and of course lower quality, too, as the steel made using induction furnaces does not possess the quality to be able to meet all downstream demands.
About 76% of Iranian steel are made using EAF with DRI feedstock and the percentage is bound to reach 80% by 2025.
FIECO’s report suggests “industry policymaking to keep up with the field’s technological development,” indicating that steelmakers should move toward higher quality and more competitive pricing by using a method that utilizes all of Iran’s competitive advantages, such as low energy costs.
 2015-17 Rollercoaster Ride
In 2015, the installed global steelmaking capacity grew compared to the year before but production marked a significant decline. This was the first time global steel output shrank ever since the 2008 crisis.
China’s huge investments and incentive policies prevented the country’s production from dropping in 2008 and were actually successful in boosting output and keeping the market up. But in 2015, China had become a behemoth. Its ever-growing output, coupled with the global overreliance on Chinese production and exports, was one of the main causes of global industry depression.
Usage shrank worldwide and demand dropped. China’s dumping strategies made things no better and eventually eviscerated prices. Many steelmakers were simply unable to keep up and continue, and especially in Iran, dropping iron ore prices also drove many miners out of business.
Things improved the next year. Iron ore prices ended 2016 higher, as Chinese ore demand and steel usage grew. And interestingly, China’s exports during the year were down compared to 2015, giving exporters worldwide a chance to breathe.
FIECO’s report indicates that no significant turn in the market trend is expected to occur in 2017. China’s growing debt to GDP ratio will mean fewer incentives in the market for the year and lower growth.
Markets are also skeptical whether US President Donald Trump’s election promise to inject $1 trillion into infrastructure development will materialize.
Iron ore supply will remain unchanged and prices will correct the bubble. The Iranian steel industry then will only have its own policymaking to watch.

 



A group of Iran’s top academicians have called on the administration in Tehran to respond to the new US entry ban on Iranian citizens with an innovative approach different from Washington’s discriminatory policies.

In a letter to President Hassan Rouhani and Foreign Minister Mohammad Javad Zarif, 72 professors from Iran’s prestigious Sharif University of Technology warned against the ramifications of the “discriminatory” travel ban on Iranian citizens by the administration of US President Donald Trump.

“Apart from the problems that the order has caused for the routine lives of our fellow countrymen in Iran and America, the propaganda aimed at justifying the measure will harm our cultural, religious and historical image as well as our national interests and it can bring about extremely detrimental impacts,” the letter read.

The top scholars called on the Iranian administration to “exercise restraint” and adopt a “proper and innovative” policy in an attempt to “nullify the harmful impacts” of Trump’s order.

The academics suggested that the Iranian administration issue two-week tourist visas for US citizens upon arrival at airports over the next 90 days, allowing them to “travel to Iran and closely experience the hospitality of the peace-seeking Iranians and Muslims.”

Such an initiative will highlight Iran’s “ethics-oriented policy” in the global arena and revive international support for the country, the letter pointed out.
People stage a protest rally against US President Donald Trump's new travel ban on the citizens of seven Muslim-majority countries at Regan National Airport in Arlington, Virginia, on February 1, 2017 (Photo by AFP)

In a move which sparked widespread censure, the new US president signed a sweeping executive order on January 27 to suspend refugee arrivals and ban citizens of Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen from traveling to the US.

On Sunday, the Iranian Foreign Ministry summoned the Swiss ambassador to Tehran, Giulio Haas, who represents the US interests in Tehran, to protest against the US president's discriminatory decision.

Ban's special advisor on SDGs hailed Iran’s active role in the process of negotiations on Sustainable Development Goals and the 2030 Agenda for Sustainable Development.

United Nations Secretary-General’s Special Advisor on Sustainable Development Goals (SDGs) Professor Jeffrey Sachs met with Seyyed Abbas Araghchi, Iranian Deputy Foreign Minister for International and Legal Affairs, in Tehran on Monday, where he commended Iran for its tremendous efforts during the process of negotiations on Sustainable Development Goals, expressing hope for further progress on the realization of SGDs with active participation of all UN member States.

“Adverse environmental consequences and climate change have been very severe in West Asia and can leave a wide-spread impact on the lives and welfare of the people in this area,” Sachs said.

He went on to add, “as a result, we at the United Nations, are ready to cooperate with regional countries particularly the Islamic Republic of Iran about these issues.”

Iran has the potential to become the major regional center for environmental issues and sustainable development, he noted.

Abbas Araghchi, for his part, said environmental issues and sustainable development are of high significance to Iran, and the country’s general policies and national programs lay a great emphasis on environmental protection and sustainable development in different parts of the country.

He went on to add, “developed countries must provide the necessary means for achieving SDGs in the areas of finance, technology transfer and capacity building so that following up on the measures and activities related to the realization of SDGs would be facilitated and no limitations would be placed on its funding.”

United Nations Secretary-General’s Special Advisor on Sustainable Development Goals (SDGs) Professor Jeffrey Sachs arrived in Tehran on June 5 for a three-day stay in the Iranian capital. Dr. Sachs, who visited Tehran at the invitation of the Iranian Mission at UN Headquarters in New York, is known as one of the world's leading experts on economic development and the fight against poverty.

During his stay, he delivered lectures at Amirkabir University as well as the Ministry of Foreign Affairs’ Institute for Political and International Studies (IPIS) and paid a visit to some United Nations Development Programme’s project sites.