World  Business and Economic Analysis 


 Iran’s deputy has announced that 400 to 500 airplanes will be added to the country’s aviation fleet within eight years.

Speaking at a meeting with the Finnish Minister for Foreign Trade and Development Deputy Kai Mykkänen in Tehran, Minister for International Affairs at the Ministry of Road and Urban Development Asghar Fakhrieh Kashan said negotiations over plane purchase with Airbus and Boeing are still underway; “in case contracts to buy aircraft with ATR, Brazil and Canada become finalized, a total of 400 to 500 planes will furnish the Iranian fleet.”

“Iran’s demand for aircraft has created an excellent opportunity for European countries to enter into aviation deals with Iran,” he continued.

The official enumerated a number of areas for collaboration in marine, land, air and building sectors; “the Finnish have voiced readiness to bolster ties with Iran and they have agreed to present outcomes of bilateral ties in near future.”

Farhad Emam
Legal Consultant and International Trade Law Researcher

A Brief Analysis of Private and Public Entities in Iran

A main question during the due diligence process in Iran is about the legal qualification of the local counterpart or partner. The Iranian entity that is interested in dealing with a foreign company is either a company, or an organization, or a “prilic” entity as explained below. Foreign companies normally ask a basic and apparently simple question from their Iranian counterparts: Are you a public or a private entity? What are the best ways of evaluation and verification of the responses to be received from the Iranian entity? It all depends on the legal qualification of the Iranian entity as well as the control that is exerted on it by its real owners.

I. Companies

a. Public companies: In these companies, either more than 50% of the equity belongs to government, or it is a chartered company or it is nationalized or expropriated under law or by a court order.

b. Private companies controlled by government, governmental organizations or public companies: Controlling equity, as defined by Article 1(7) of the Act on Execution of General Policies of Article 44 of the Constitution (the Act), means the percentage of equity that enables its owner to select the majority of members of the board of directors. Article 1(18) of the Act gives a wider meaning to the concept of control by defining a controlling company as an entity that through ownership of all or part of the shares or equity or through management of a company, or through other ways, controls economic activities of other entities in the market.

c. Cooperatives: Under Article 44 of the Constitution, cooperatives are neither private nor public entities. However, shares of a cooperative company may be purchased by public entities up to 49% in less developed regions and up to 20% in other regions of Iran under Article 12(3) of the Act Amending Articles of the Four Development Plan. As a result, a cooperative company can get very close to becoming a public company.

II. Organization (moas’seseh)

Public non-governmental organizations are defined under Article 5 of the Public Audit Act (1987) as entities established under law to carry out public functions or to render public services. The Act Listing Public Non-Governmental Organizations and Entities (1994) must be consulted before entering into an agreement with the entities listed in the above Act. The most famous among them are four foundations: a) Mostazafa’an and Janbaza’an Foundation; b) Martyrs Foundation; c) Housing Foundation; and d) 15 Khordad Foundation. Note 2 of the Act states that provisions of the Act shall apply to the public non-governmental organizations that are under supervision of the spiritual leader only where it is authorized by him.

III. Prilic (khosoolati) entities

In some instances, it becomes really difficult to determine whether an entity is public or private. The reason behind this difficulty is that through a combination of complex equity purchase operations, privatization and management control, certain Iranian entities are standing somewhere between public and private ends of the existing spectrum. The term used in Persian language (khosoolati) is a combination of public (dowlati) and private (khosoosi). As a result, the term used in this text, i.e. “prilic” is a combination of private and public. Prilic entities are created to benefit from advantages of both public and private companies. As a result, special rules apply to their establishment, as well as start and termination of their operations. They will be explained in a separate post.

Law in Iran Group
A. Structure
Law in Iran Group is an international legal network composed of lawyers and experts from 12 different countries including Iranwho have come together to provide legal information and services to the clients who are interested in doing business in or with Iran.
B. Scope of services
Law in Iran Group provides its clients with legal information and services related to oil and gas, foreign investment, technology transfer, intellectual property, transport, banking and finance, tax, labour and employment, legal structures and population movement (including immigration, as well as work and study abroad). Asubsidiary group called “STUDCARAN” is established for sharing information and rendering services related to study, work and stay in Canada.
C. How to contact us
Two websites, two channels and groups on Telegram and one group on Linkedin provide you with information about the above subjects and enable you to avail yourself of the services provided by "Law in Iran" and STUDCARAN groups:


Iran’s Naftiran Intertrade Company Sàrl (NICO) and France’s Total S.A. Company have agreed on sealing an oil swap deal.
Naftiran Intertrade Company Sàrl (NICO), a Swiss-based subsidiary of the National Iranian Oil Company (NIOC), and Total oil company of France have agreed on inking a deal to swap crude oil from Caspian Sea littoral states.

Following the earlier contract between Iran and Franc over exports of 160 to 200 thousand barrels of crude per day, an oil swap deal is also expected to be inked in near future.

In addition to Total, two other oil giants, Vitol of Switzerland and England’s BP (British Petroleum), have also held successful oil swap negotiations with Iran’s NIOC.

So far in the post-JCPOA era, Total has signed a contract to purchase 160 thousand barrels of Iranian crude per day, a confidentiality agreement for development of South Azadegan oilfield as well as a Memoranda of Understanding (MoU) to construct a petrochemical complex in southern Iran.

Hassan Bagherian, Director of the Tehran Department of the Iranian Oil Pipelines and Telecommunications Company, has recently told a press conference that the refinery is prepared for swapping oil with northern neighbors of Iran by building the adjoining facilities.

“the facility can swap over half a million barrels of oil to these countries as well as two other Iranian refineries on a daily basis,” underlined the official adding “Tehran Refinery is ready to receive oil feeds from Kazakhstan, Azerbaijan and Turkmenistan as Iran is planning oil swap with the countries.”

Hamidreza Shahdoust, a local Iranian Oil Terminals Company (IOTC) official in the city of northern city of Neka, had said earlier that Neka Oil Terminal enjoys a total storage capacity of 120 thousand barrels per day in its 12 tanks; “moreover, the project to increase oil swap capacity to 2.5 million barrels per day has kicked off,” he had noted.

Oil Minister Bijan Zanganeh, while pointing to Iran’s readiness for oil swap with Russia, had earlier noted “the Russian side has also voiced willingness for swapping a portion of its oil production through Iran’s route and relevant negotiations are underway.”

“The capacity exists for a maximum swap of 150 thousand oil barrels per day,” underlined Zanganeh stressing “the process would boost Iran’s market share since the replacement is delivered to customers in the Persian Gulf.”

A key player in Iran's energy sector, NICO is a general contractor for the oil and gas industry which also handles trading and swaps operations on behalf of NIOC.

Iran eyes swap arrangements with Azerbaijan, Turkmenistan, and Kazakhstan, under which it ships crude from the Central Asian producers to its Caspian ports. In exchange Iran delivers the equivalent barrels of crude on behalf of the three Central Asian producers to their customers in the Persian Gulf.

کتاب عملیات بانکی در عرصه بین الملل -سرفصل ها،ضمائم ،توصیه صاحب‏نظران ارزی و مدیران ارشد بانکی

Investment Consulting &Project Finance


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