Free Zone Incentives Expanded
New regulations broaden tax holiday eligibility, simplify currency repatriation, and add manufacturing categories across all seven free zones.
Iran's Free Zones High Council ratified an expanded incentive framework applicable to all seven commercial free zones (Kish, Qeshm, Chabahar, Anzali, Arvand, Maku, Aras). The package broadens the 20-year corporate tax holiday to several previously-excluded activities and simplifies the FX repatriation pathway for foreign sponsors.
What's new
- 20-year corporate income tax holiday extended to data-center, R&D, and digital-services activities
- Repatriation of dividends moved from case-by-case review to standing approval (≤ USD 10M/yr per entity)
- VAT exemption on imported capital equipment extended through 2030
- 100% foreign ownership re-confirmed; no minimum local-participation requirement
- Streamlined activity licensing: 30-day SLA, deemed-approved if exceeded
Practical impact
For a typical mid-sized greenfield (USD 25-75M capex, 50-150 staff), the package compresses time-to-license by 6-10 weeks and reduces year-one tax-equivalent friction by an estimated 4-6% of project capex on a present-value basis. The repatriation clarity is particularly meaningful for fund-style sponsors with quarterly distribution obligations.
Who benefits most
Data-center operators, downstream petrochemical converters, light-industrial manufacturers serving CIS/CCG markets through Anzali and Chabahar, and ICT services companies booking revenue offshore. The Free Zones Council has signalled further rounds focused on green-energy manufacturing later in 2025.