Protecting your Investments in Iran

By Ali Darzi, founder and principal of Iran Foreign Investment Consultants (

At a glance, the approach of the media to foreign investment in Iran is that although Iran is a very attractive place for investment, there are some risks associated with businesses in the country.

Investment in any country, especially in an emerging market has its own risks, and Iran is no exception to this rule. Any potential investor in Iran must find the risksĀ related to his investment and then properly find the best solutions to mitigate such them.

The most important risks that every foreign investor (FI) may face in Iran can be generally categorized as commercial risks and non-commercial risks. Commercial risks include business, operational and financial risks that are predictable, solely related to foreign investment and its nature of management. Non-commercial risks (NCRs), which are often associated with political risks arise, from external elements and are hard for FIs to predict.

The most important NCRs which may threaten FIs in Iran include expropriation of investment and the properties of the investor, prevention of repatriation of funds and profits of investment in the form of foreign currency, non-equal treatment with regard to the domestic investors, recourse to local court for dispute settlement, breach of contract, and war and civil disturbances.

However, NCRs in Iran can be managed by invoking the protections provided in Iranian investment treaties. So far, Iran has signed 63 bilateral investment treaties with other countries, among which 51 are enforceable. Iran is also a signatory to the Agreement on Promotion, Protection and Guarantee of Investments of the Organization of Islamic Cooperation (OIC).

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