Frequently Asked Questions

The headline corporate income tax rate is 25%. Reduced rates and exemptions exist for certain activities, regions, free zones and listed companies, each with conditions, so confirm eligibility for your entity and tax year.

VAT rates and filing requirements can change by fiscal year and activity. Confirm the current rate, exemptions and input-tax recovery conditions with the Iranian tax authority before pricing a transaction.

Tax treatment depends on whether the taxpayer is an Iranian-incorporated entity, a foreign entity or a branch, and on the source and type of income. Do not assume that an Iranian subsidiary is exempt on all overseas income; obtain entity-specific advice.

Incentives can include income-tax exemptions or reduced rates for qualifying activities and regions, relief for certain exports, customs relief on some capital equipment and separate regimes in free zones. Conditions, durations and annual budget-law changes apply, so confirm each incentive for your activity.

Companies generally file an annual corporate tax return within four months of the fiscal year end, and VAT returns are filed periodically. Confirm deadlines with the Iranian National Tax Administration for your entity, because late filing carries penalties and can affect exemptions.

Yes, legitimate business expenses including salaries, rent, utilities, professional services, depreciation, and interest on business loans are deductible. All expenses must be documented with supporting receipts.

Depreciation follows the rates and methods in the tax authority's depreciation schedule, which differ by asset type and can be straight-line or declining-balance. Check the current schedule for each asset class; accelerated depreciation may be available in some cases.

Penalties can apply for late filing, late payment and failure to keep proper records, and serious cases can lead to criminal liability. Late filing can also cost you exemptions. Confirm the current penalty rules with a qualified tax adviser.

Under FIPPA, licensed foreign investments can transfer profits once taxes and legal obligations are met. Transfers go through the banking system with supporting documents, and foreign-currency availability, sanctions screening and bank acceptance remain practical constraints.

FIPPA provides transfer protections for qualifying licensed investments, subject to documentation, applicable approvals and tax obligations. Foreign-currency availability, sanctions review and bank acceptance remain separate constraints; no fixed settlement window or exchange rate is guaranteed.

FIPPA does not set a cap on transferable profits from a licensed investment, but each transfer must be documented and processed through the banking system, and larger transfers can take longer.

Required documents include: audited financial statements, tax compliance certificate, board resolution, transfer request, proof of tax payment, company registration documents, and supporting bank records showing profit generation.

There is no fixed timetable. Timing depends on documentation, tax clearance, bank processing and foreign-currency availability, and it can change with central bank policy. Plan for delays and test the route before relying on it.

The applicable rate depends on the channel through which foreign currency is supplied, and Iran has operated several rates at the same time. Confirm which rate will apply to your transfer before modelling returns.

Yes, dividends to foreign shareholders follow the same repatriation procedure as profits. Board resolutions declaring dividends and proof of payment to shareholders are required.

Profits are taxed at company level before distribution, and Iran does not generally levy a separate tax on dividends paid from taxed profits. Your home country may tax the dividend, so check any treaty relief.

Delays can follow changes in central bank policy or currency supply. If a transfer is refused, ask the bank for the reason in writing and involve local counsel and, for FIPPA-licensed investments, OIETAI.

Reinvested profits can generally be registered as additional foreign capital under FIPPA, which keeps them within the protected investment. Some reinvestment may also qualify for tax relief; confirm the conditions before deciding.

Foreign investors can establish: wholly-owned subsidiaries (100% foreign ownership), joint ventures with Iranian partners, branch offices, or representative offices. The structure depends on the sector and investment type.

Yes, in many sectors. FIPPA sets no general cap on foreign shareholding, so a wholly foreign-owned company is possible. Some activities are closed to foreign ownership or need specific licences, and the FIPPA rules set market-share thresholds for foreign-invested production in each sector.

Yes. Oil and gas reserves remain state property, so foreign participation upstream is contractual rather than ownership of the reserves. Broadcasting is a state monopoly, defence-related activity is closed, and sectors such as banking, insurance and telecoms need specific licences. Check the rules for your activity before choosing a structure.

There is no general minimum investment under FIPPA, although company type, sector licences and some free zones set their own capital requirements. Confirm with OIETAI or the zone organisation for your activity.

Yes. For a FIPPA-licensed investment, the transfer needs approval so that protection continues for the new owner, who must meet the same conditions as the original investor.

Foreign shareholders have voting rights proportional to their ownership stake, just like domestic shareholders. They can participate in general assemblies and board decisions according to the articles of association.

Yes. A foreign parent can establish several subsidiaries or branches for different business lines. Each entity needs its own registration, and each investment needs its own FIPPA licence if protection is sought.

On dissolution, assets are distributed under the articles of association and Iranian law once debts and obligations are settled. For a FIPPA-licensed investment, transferring the proceeds abroad follows the Act's capital-repatriation procedure, which includes advance notice to the Foreign Investment Board and its approval.

Sales must follow the articles of association, and for a FIPPA-licensed investment the transfer must be approved for protection to continue. Sales to Iranian buyers, and sales in some sectors, may need additional approvals.

Yes, foreign investors can pledge shares as collateral to Iranian banks for loans. The pledge must be registered with the company and comply with banking regulations. Default risks apply to pledged shares.

Foreign shareholders must report: shareholding changes, dividend distributions, capital transfers, and beneficial ownership information. Annual financial disclosure is required through the company's tax filings.

Iranian law provides protection against expropriation except for public interest and with fair compensation. Foreign investors have legal recourse through Iranian courts or international arbitration if agreed in contracts.

Main obligations include: annual tax filing, financial auditing, employee registration with social security, VAT reporting, labor law compliance, maintaining company records in Persian, and reporting to relevant government agencies.

Joint-stock companies must appoint a statutory inspector, and many companies must have their financial statements audited by certified accountants, depending on company type and size. Confirm which requirements apply to your entity each year.

All corporate records, financial statements, and official documents must be maintained in Persian. Translations of foreign documents into Persian are required for government submissions. Bilingual records are acceptable for internal use.

Yes. Iranian law penalises bribery and financial misconduct, and home-country rules such as the UK Bribery Act or the US FCPA may also apply. Keep transparent records and a clear policy on gifts, intermediaries and facilitation payments.

Iran does not have a single comprehensive data protection law in force comparable to the GDPR, but rules on electronic commerce, cybercrime and sector regulation apply, and data-localisation requirements can affect some services. Map where data is stored and who can access it.

Use authorised banks and licensed exchange channels, and keep documents for every conversion. Iran operates more than one exchange rate, and the rate that applies depends on the purpose of the transaction. Informal channels create legal, tax and sanctions risk.

Foreign companies must comply with customs regulations, obtain necessary import/export licenses, declare goods accurately, pay applicable tariffs and duties. Services exports may require ministry approval. Banned items cannot be imported.

Disputes can be resolved through negotiation, mediation, Iranian courts or arbitration if the contract provides for it. Iran is a party to the New York Convention on foreign arbitral awards, although enforcement still depends on the courts and on the assets available.