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FAQ for Dutch companies FAQ for Dutch companies
Which Iranian sectors offer possibilities for Netherlands exports?The following sectors offer impressive opportunities for Dutch companies:
Where can I obtain information on the Iranian market?An extensive overview of sector-related developments is available on the EVD internet site: 1- The Dutch company’s complete contact details (including email and web site addresses)
Our experts can provide a description of the market, trade figures, information on rules and regulations, lists of important projects and contacts of relevant companies and public institutions. The Dutch company’s details are kept in our files for future references. The companies will be informed about relevant tenders, requests and business opportunities, when applicable. How many Dutch companies are active in Iran?An estimated 500 Dutch companies are active in Iran. Most of these companies sell via an agent or directly to the end user. 17 Dutch companies have a registered representative office and 7 have joint ventures in the form of foreign direct investment. Approximately eighty Dutch nationals are working in Iran, of which nearly half hold both the Dutch and Iranian nationalities. There are also small and medium size Dutch companies that have won lucrative contracts. In general, due to the nature of the Iranian economy and the government policies, companies that are manufacturer and possess new technology, not available in Iran, are the most successful. Engineering services related to oil, gas, petrochemicals, environment and marine development and infrastructure projects are also means of cooperation between the two countries. Providers of financial and ITC services are other Dutch companies present in Iran. Are special licenses needed for sales to Iran?For all imports to Iran an Order Registration Certificate from the Ministry of Commerce, is required. For the certificate the importer has to submit:
With an Order Registration Certificate the goods can be shipped to Iran and after the payment of import duties, cleared from customs. The duties are usually high for products, which have a similar locally manufactured type. The HS Tariff Codes are used to specify the products in customs. The procedure and administrative requirements for customs clearance of goods are lengthy and the transportation company or the importer usually has to hire a local specialist for this purpose. Is foreign investment a possibility in Iran?The Foreign Investment Promotion and Protection Act (FIPPA) was ratified by the Iranian parliament in early 2002. The law allows foreign investment in the shape of Buy-Back, Built Operate and Transfer (BOT) and Joint Venture contracts. Under this law all foreign capital, machinery and equipment, spare parts and technical know how invested in Iran are protected by the government, just as local investment. The new law also allows and protects the repatriation of profits by the foreign investor. The foreign investor is permitted to participate in all the economic activities allowed to the private sector in this country. The Foreign Investment Board (FIB) reviews all the proposals for foreign investment and grants permission for their activities. The board is headed by the Deputy Minister for Foreign Investment of the Ministry of Economic Affairs and Finance (who is also the Chairman of the Organization for Investment, Economic and Technical Assistance of Iran, OIETAI) and includes the deputies from the Central Bank of Iran, Management and Planning Organization, Ministry of Foreign Affairs, and the ministry, which is in charge of the relevant sector. Once the permission is granted, OIETAI is responsible for assisting the foreign investor in all the relevant legal, administrative and operational matters. A report on how to open a representative office or establish a joint venture is available in the web site. Are there areas with easier import regulation?Free Trade Zones and Free Economic Zones have no import restrictions for foreign products. The total duties charged on regular imports are from 2% to 10%. For machinery and equipment, which are related to implementing a project in the free zone, 40% discount on customs duties is applicable. For raw material and chemicals used in the industrial projects, 20% discount is applicable. The Free Trade Zones are located in Kish Island, Qeshm Island, Chabahar Port and Arvand Area (Cities of Abadan and Khoramshahr in Khuzestan Province). The main goal for Kish is to attract tourism and retail trade, for Qeshm is to establish industries, and for Chabahar and Arvand is to expand transit of goods to the neighboring countries. There are 17 Free Economic Zones spread throughout the country. The most important zones are Pars Free Economic Energy Zone and Petzone in Bandar Imam used for petrochemical development projects. Shahid Rajai and Anzali Free Economic Zones, which are the two main ports of Iran in the Persian Gulf and the Caspian Sea, play a significant role for shipping and transit, as well. Salafchegan, which is in the suburb of Tehran, has also been successful in locating industrial projects. What type of goods can not obtain import license?Imports of goods that do not comply with Islamic Codes of Conduct such as alcohol and material with pornography are not allowed. Each year the government makes two lists of unnecessary goods and forbidden goods, which is used in customs. The unnecessary goods will have high tariff rates, but can be imported, but forbidden goods can not be imported in any circumstance. Imports of goods with Israeli origin are not allowed. At times, due to political tensions, a particular country might temporarily be placed in the same category and not be able to trade with Iran. At the moment Czech Republic and Canada have temporarily been placed in the category of countries that have difficulty importing to Iran. Goods that are considered as unnecessary in 1385:
Forbidden Goods in 1385:
What are the most common payment practices in Iran?The payments for most of the imported products in Iran are through the bank Letter of Credit (L/Cs). L/Cs in Iran is unconfirmed, irrevocable, and the payment is at sight. Documents needed for releasing the L/C are: Certificate of Origin issued by the Iran Chamber of Commerce, Performa Invoice, Packing List, Bill of Lading, Good’s Inspection Documents and Insurance Policy. The Iranian Company that places the request for opening a L/C has to place collateral in the commercial bank (where it has applied for the L/C), until the transaction is concluded. In order to have absolute certainty about the prompt payment of the importing company, a common practice by foreign companies is to obtain services from an international bank to reconfirm the L/C. The banks can issue this silent confirmation based on their short or mid-term financing agreement with the Central Bank of Iran (CBI). A report on L/Cs is available at the site. At times of political disputes, there are changes in the risk ratings, which effect the relations between the CBI and international banks under its agreement. The risk rating in Iran has increased from 4 to 5 as a result of disagreements about its nuclear program. The usual effect under these circumstances is the increase in bank charges and restrictions on foreign bank facilities.
Where can I go for help when experiencing problems with the export of my products?In Iran it is customary that agents or clients solve possible problems for the Dutch exporter. In case this is not possible, you may wish to contact the Economic Department. Sometimes it is difficult for us to find a concrete solution, but your case could be used as background information for meetings between Iranian and Dutch authorities. |
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