Plan the employing entity before the first hire
Staff are normally engaged by a registered Iranian entity: a company, a registered branch or a free-zone company. A representative office has a narrower permitted scope. Confirm that the entity is registered with the tax and social security authorities before signing employment contracts or paying salaries.
Free-zone companies follow zone-specific employment and permit procedures for some matters. Do not assume that mainland rules or zone rules apply without checking the regulations of the zone and the location where the employee actually works.
Employment contracts and the Labour Law
Most private-sector employment is governed by the Labour Law and its implementing regulations. Fixed-term and indefinite contracts are both used. Contracts should state the job, place of work, pay, working hours, start date and duration, and should be issued in Persian; a translation can be attached for foreign managers.
Statutory minimum wages, allowances and insurance ceilings are revised periodically, usually each Iranian year. Use the current official rates on the date of hiring rather than figures from an older guide or job advertisement.
| Record | Purpose | What to verify |
|---|---|---|
| Written employment contract | Defines role, pay, hours and term | Persian text, signatures and correct employing entity |
| Social security registration | Insurance and pension contributions | Employee listed from the first working day |
| Payroll and withholding | Salary tax and contribution filings | Current rates, filing deadlines and payment proof |
| Work permit (foreign staff) | Authorises a foreign national to work | Permit issued before work starts and renewal date |
| Internal policies | Discipline, leave and confidentiality | Consistency with the contract and applicable law |
Foreign employees and work permits
A foreign national generally needs a work permit and a matching visa or residence status before starting work. The employer usually applies and must show why the role requires a foreign specialist. Processing time depends on the role, nationality, the completeness of documents and, in free zones, the zone authority.
Keep permit expiry dates in a calendar and start renewals early. A permit is usually tied to the employer and role, so a change of entity, position or location can require a new application.
Termination and dispute risk
Ending employment is more regulated than in many jurisdictions. Severance, notice and the role of workplace committees or labour dispute bodies depend on the contract type and the reason for termination. Document performance issues and take local legal advice before any dismissal.
Expiry of a fixed-term contract is not always free of claims, especially after repeated renewals. Budget for statutory end-of-service payments and keep payroll and leave records that can support your position in a dispute.
Before your first hire
- Confirm the employing entity is registered for tax and social security
- Prepare a Persian employment contract template reviewed by local counsel
- Check the current minimum wage, allowances and contribution rates
- Plan work permits and visas for any foreign staff before their start date
- Set up payroll, withholding and monthly filing responsibilities
- — Hire through a properly registered entity and register staff for social security from day one.
- — Rates and allowances change each year; always use current official figures.
- — Foreign staff need a work permit before starting, and permits are tied to the role and employer.
- — Termination carries procedural and financial obligations; take advice before acting.