COUNTRY OVERVIEW
Iran, Known as Persia until 1935, is a Middle Eastern country located in Southwest Asia. Iran became an Islamic republic in 1979 after the ruling shah was overthrown by a national revolution. The official name of the country is Islamic Republic of Iran and Shiaa Islam is the official state religion while only the followers of Christianity, Judaism and Zoroastrianism are the recognised legal minorities.
Iran is administrated according the solar calendar which has been country official calendar back to more than 4,000 years.
Iran had an estimated Gross Domestic Product (GDP) in 2017 of US$439.5 billion. It has a population of 80.6 million people according to a 2017 estimate. Iran’s economy is characterized by the hydrocarbon sector, agriculture and services sectors, and a noticeable state presence in manufacturing and financial services. Iran ranks second in the world in natural gas reserves and fourth in proven crude oil reserves. Economic activity and government revenues still depend to a large extent on oil revenues and therefore remain volatile.
Iranian authorities have adopted a comprehensive strategy encompassing market-based reforms as reflected in the government’s 20-year vision document and the sixth five-year development plan for the 2016-2021 period. The sixth five-year development plan is comprised of three pillars, namely, the development of a resilient economy, progress in science and technology, and the promotion of cultural excellence. On the economic front, the development plan envisages an annual economic growth rate of 8 percent and reforms of state-owned enterprises, the financial and banking sector, and the allocation and management of oil revenues among the main priorities of the government during the five-year period.
The current account surplus is estimated to have slightly improved to 4.1 percent of GDP in 2017 (up from 3.9 percent in 2016) as oil prices increased while export volumes remain stable around 2.4 million barrels per day and production remains at the amount agreed under the OPEC production cut and 2011/12 daily production level.
Following the street protests in late December 2017/early January 2018, the exchange rate depreciated significantly and volatility increased, while the gap between the official and parallel market rates widened.
As of early March 2018, the rial depreciated 15 percent against the US dollar compared to early-December.
Going forward, implementing the domestic reform agenda is likely to bring the highest growth dividend in the medium to long term. In a period of heightened uncertainty, this will involve tackling the structural reform agenda that will boost the non-oil sector growth, through creating a level-playing field for existing and new firms, strengthening the banking sector, improving the business environment and the efficiency of labor markets.
LEGAL SYSTEM OVERVIEW
Iran legal system was structured in 1930s when the civil courts and prosecution system were defined and main laws were ratified by the parliament inspired by Napoleon code of France. The legal system is basically structured as Civil law in particular following French Civil System, with the exception to some areas such as family and penal law that are Sharia principals and regulations.
The Constitution law and Sharia principals are the supreme laws of the country, prevailing over any other sources i.e: laws, directives, by0laws, etc. Laws that are inconsistent with either the Constitution or Sharia will not be approved by the Guardian Council -appointed by the Supreme Leader- acting as the supervisory body over the Parliament.
The directive and by-laws issued by the government can be revised and annulled by the high admin court if found in contrast with the law and/or Sharia.
The Judiciary Power is independent from the other two powers according to the constitution law. The head of the Judiciary is appointed by the Supreme Leader, who in turn appoints the head of the Supreme Court and the Chief Public Prosecutor.
Public courts (in two stages of primary and appeal) deal with civil and criminal cases. “Revolutionary” courts are dedicated to certain categories of offences such as crimes against national security/interests, narcotics smuggling, and any acts considered as animosity to the government.
According to the Constitution, the relationship between the Judiciary, the Executive and Legislative powers are managed by the Minister of Justice who is appointed by the President from the nominees introduced by the Head of Judiciary.
Attorneys are qualified lawyers who are either member of Iran Bar Association – as an independent association- or Attorneys Association, subsidiary to the Judiciary Power.
The courts’ decisions do not have any precedent value and are not usually documented for the future reference by other courts except those that are exceptionally issued by Supreme Court as the Judicial Precedent.
Iran is a signatory of the 1958 New York Convention which makes it possible for an arbitration awards to be enforced within Iran. It also allows Parties to choose arbitration in liue of courts and to choose a foreign arbitration law as the governing law in another country and in any other language in the events where one of the parties is not an Iranian Nationality.
The personal related matters of foreign nationalities/non- muslims is proceeded based on their home country law/religion.
BUSINESS SECTOR
Iran is the world’s eighteenth largest by purchasing power parity and twenty-seventh by nominal gross domestic product. The country is a member of Next Eleven because of its high development potential. With at least 60% of the economy being with public sector, price controls and subsidies burden the economy. Contraband, administrative controls, widespread corruption and other restrictive factors undermine private sector-led growth.
More than two-thirds of the population (exceeding 80 million people) are under the age of 30. Net primary school enrolment is almost 100%.
Women university enrolment has exceeded 60% as average over past decade.
Iran has been subject to different international sanctions and Exports Controls regulations since 1979 revolution however as a result of expanding the nuclear activities, the international Sanctions became tighter by 2009 making the economy weak and isolated for several years.
By July 2015 Iran and 5 major European countries plus USA reached to a nuclear agreement called -JCPOA- , providing an opportunity to ease on some of the sanctions and led to the countries doors to be open again. However, as a result of latest decision of USA administration to pull out of the deal and re-impose the secondary sanctions, the existence of the agreement and foreign investment opportunities seems to be uncertain.
The risk of international sanctions possible violation along side with the high index of corruption perception leads to low foreign investment in despite of country high potential and high demand.
SECURITY OVERVIEW
Iran is generally considered a very safe country to travel to and do business within form security perspective maybe it is a fair statement to make that the biggest dangers are actually driving and crossing the street.
Violent crime against foreigners is extremely rare however western embassies advise their nationals to register on arrival, especially if you will be in Iran for 10 or more days, or plan to visit remote places.
Certain Islamic rules apply to all residents of Iran as well as tourists regardless their religion which mainly are ban on any alcohol drink, homosexuality, cohabitation of couples without official marriage and enforcement of Islamic dress code for all women.
For women travellers the Islamic dress code requires them to cover their hair and wear long sleeve blouses in public places all the time.
Kidnapping crimes and terrorist attacks are very rare in most of the country. That being said, the general advice is against travelling to:
- within 100km of the Iran–Afghanistan border
- within 10km of the Iran–Iraq border
- the province of Sistan va Baluchestan (South east of Iran)
Photographing the wrong places at the wrong time such as borders, security guards, prisons, military bases, governmental offices or as such can most likely spark police attention to tourists. If you have unwittingly aroused the attention of police for photographing the wrong thing emphasise you are a tourist and immediately delete the pictures. Avoid arguing in these situations.
Tourists are expected to carry their ID/ Passport at all times, but this can be tricky as hotels are also supposed to keep guests’ passports for police inspection. Always carry several photocopies of both your passport’s face page and your Iranian visa, and if you go out of town leave a photocopy at reception and take the passport. If you are stopped, show your photocopies unless you are sure the police are genuine.
Tourism in Iran is diverse, providing a range of activities from hiking and skiing in the Alborz and Zagros mountains, to beach holidays by the Persian Gulf and the Caspian Sea, but the main reason that tourists visit Iran is because of Iran Cultural and Iran History and places such as Persepolis, Naghsh-e Rosta, Naghshe Jahan and other places in Iran which takes the country to the number of 22 World Cultural Heritage. The Iranian government has been making concerted efforts to attract tourists to the various destinations in the country and arrivals have increased during the past few years. In despite of religious limitation as of 1979 revolution, the number of European and Asian tourists to Iran never changed and has been increasing in the past years.
The high potential of tourism attraction makes this industry an excellent opportunity for foreign and local investment in hotels, restaurants and as such.