A TO Z, USEFUL TIPS
Here are some definitions mentioned in the rules and regulations, and its necessary explanations.
Who is foreign investor?
Non-Iranians and Iranians who are living overseas. In a word, if the source of money came from abroad, it is considered "foreign investment" and may benefit from fund transfer and opening necessary bank accounts for their investment; also to protect and guarantee their capital based on these regulations.
Where can I invest?
Exchanges (Tehran Stock Exchange Co.), OTC market (Farabourse Co.), as well as Futures Market of Iran Mercantile Exchange (IME).
What are the trading instruments?
Shares, rights, Futures (on shares and different commodities such as underlying assets), corporate certificates, different Islamic fixed income securities (Sukuk).
Are there any limitations for FPI?
Please refer to Article 7 of "the Regulation Governing Foreign Investment":Article 7:the restrictions imposed on the possession of shares by the non-strategic foreign investors on every exchange or OTC market are set forth as follows:
|1-||The number of shares owned by the total foreign investors shall not exceed twenty (20%) percent of the total shares number of the companies listed on the exchange or on the OTC market or twenty percent (20%) of the shares number of any company listed on the exchange or on the OTC market.|
|2-||The number of shares owned by each foreign investor in any company listed on the exchange or on the OTC market shall not exceed ten percent (10%) of the shares number of such company.|
|-||Please note SEO will supervise the limitations mentioned in Note 1.|
|-||Please note that there were no limitations for trading in rights issued.|
What is the difference between FPI and FDI?
Strategic foreign investor refers to the one who intends to possess over 10 percent of a listed share. Such foreign investor should contact "Organization for Investment, Economic and Technical Assistance of Iran (OIETAI). They grant the license to buy up to 100 percent of a listed share (as Foreign Direct Investment "FDI"). Please note that such investor cannot withdraw its capital whenever he / she may; he may grant license from OIETAI again. Please refer to Note 10 and 11, Article 1 regarding strategic investors and transferrable funds; also Note 1 of Article 10 of the "Regulation Governing Foreign Investment in the Exchanges and OTC Markets" of this booklet.
What is FIPPA?
FIPPA is the abbreviation for "Foreign Investment Promotion and Protection Act". You may obtain this from OIETAI before invest in capital market; or not. The Act is available on their website.
What are the benefits of "investment funds"?
Foreign investors may share their investments with Iranians, and managing investment will be observed by a well-qualified expert who obtains license. Those experts are well informed of Iranian market and have the ability and expertise in investing in this market. In a word, it is a less risky investment.
Money issues. How can I enter the money and repatriate?
Please refer to Article 10 of "the Regulation Governing Foreign Investment":
- The foreign or Iranian nationalities/entities shall, by obtaining the trading license, be authorized to open accounts in Rials, in foreign exchanges, transfer foreign currencies to Iran, and convert them into Rials and vice versa in the Iranian banks for their banking and investing operations. Transfer of the original capital, capital gains and cash dividends received by the persons/ entities holding trading licenses overseas (outside Iran) shall be authorized in compliance with the national foreign exchange rules and other relevant standards and regulations. The Central Bank (CBI) of I.R.I shall deliver the foreign exchange equivalent of the transferable funds as described in Note 1 of this article to the foreign investor or the Iranian investor holding licenses at the official exchange rate in the national banking system in case of a single currency peg or otherwise, at the floating exchange rate. Under particular circumstances and at the discretion exercised by the Central Bank of I.R.I., such funds shall be payable in equal installments at a four-month interval during the course of one year. The necessary guidelines for implementation of this article shall, within three months as of the approval date of the present regulations, be approved by the Ministry of Economic Affairs and Finance and the Central Bank of I.R.I.
We draw your kind attention to the important tips as follow:
|1-||If there are problems for cash inflow and outflow through banking system, it is advised to do so via official Money Exchange offices authorized by the Central Bank of Islamic Republic of Iran (CBI). Names of these official offices is available on CBI website at: www.cbi.ir|
|2-||It is advised to enter your money gradually, not the whole money together.|