Investment incentives in Khuzestan province

 

The most important of Law encouragement Related to foreign investment in the country

- Accepting the investment of Iranian natural and legal persons with foreign capital in the country and the payment of loans and legal protections to encourage and support foreign investment.

- The possibility of investing in all areas allowed for private sector.

- The quick acceptance of the application and approval of foreign investment.

- Foreign investors enjoy the rights, benefits and terms of payment of loans equal to domestic investors.

- Guaranteed to pay damages in case of nationalization and acquisition of foreign capital ownership.

- Free movement of the principal and profits of capital and the benefits of foreign investment in the country in the form of Currency or commodity.

- Ensure compensation for losses caused by the ban or stop the financing agreements in foreign investments.

- The possibility of referring investment disputes to international authorities.

- The lack of any restrictions on the size and contribution of foreign investment.

- Guaranteed to buy goods and services produced.

- Granting protection covers.

 

Encouragement of The Law on Elimination of barriers to competitiveness and promoting financial system

- Solve debt payment problems.

- Acceptance of agricultural and rural sector loan guarantees.

- Opening of a special account to provide working capital.

- Payment of currency and rial loans.

- Paying loans to buyers of ownership plans for transferable capital assets.

- A 5% discount on the Savings Account for debtors.

- Forgiveness of the fine for delaying the payment of the loan to the reserve currency account.

- Work Continuation of production units in the city.

- Facilitating the terms of goods clearance.

- Reduced entrance fees.

- Exemption of input rights of production line machines.

- Exemption from the application of the social security premium coefficient.

 

Law encouragement to protect companies and institutions based on Knowledge

- Provides low- interest or interest-free loans.

- Facilitate bidding conditions.

- Establishing an Innovation and Prosperity Fund to provide financial support.

- Prioritizing the establishment of research and production units of knowledge base in parks, special areas and etc.

- Ability to work in around the big cities.

- Create the appropriate insurance coverage.

- A 50% discount on the amount of the deposit in the tender.

- accelerated processing of requests and complaints.

- Having the legal benefits of free zones.

 

 

Investment incentive in Arvand Free Zone

- Tax exemption for all economic activities for 20 years from the date of operation.

- Freedom of participation and foreign-made capital to any permitted restrictions

- Full guarantee of foreign capital.

- Easy registration of companies and legal registration of industrial property and deferral.

- Positioning and leasing land to domestic dispatch capital and leasing land to signatory capital.

- Possibility of employing foreign labor force with free zone license.

- Opportunity to establish branches of banks, corporations and foreign and foreign credit institutions.

- Exemption from customs duty and commercial gain to certify raw materials, machinery and special items for industrial activity in the region.

- The possibility of importing manufactured goods into the region to other limitations within the framework of the value added system.

- Full freedom of entry and exit of the principle of capital and enjoyment of its activities.

- Simple rules and labor force.

 

Khuzestan Regional Electricity Company Investment Incentives

- Guaranteed buy of small-scale (new) gas generators for 5 years.

- Buy of electricity from private power plants, including gas, diesel, etc., which have not connected to the network so far and are capable of connected to the grid, according to Resolution 310 of the Iranian Electricity Market Regulation Board.

- Guaranteed buy of renewable and clean power plants for 20 years.

- Allocation of land in power substations, industrial settlements and natural and national resource lands.

- Introduced to the National Development Fund for facilities.

 

Investment incentives in the Fishery sector

- Providing expert services in all fields for free (such as aquatic engineering, health and nutrition, production, breeding, training and promotion).

- Providing all consulting services in all fields for free.

- Organizing workshops to train users.

- Financial support and introduction to the relevant authorities to get low interest rate loans.

- Phase 1 and 2 studies of aquaculture breeding plans and execution plans and plans along with inquiries from relevant departments.

- Transfer of government land to private sector investors.

- Facilitate investment through the creation of the necessary infrastructure including provision of suitable land with water, electricity and...

- Advice on choosing a site for free.

 

Investment incentives of Ahvaz municipality

 -Grant limited environmental advertising at the project site.

- Granting a license to operate a car park at the project site.

- Offer to use the monetary and financial facilities of the banks negotiating with the municipality.

 

Investment incentives for Khuzestan Electricity Distribution Company

- Guaranteed buy of electricity from renewable and clean power stations dedicated to subscribers up to 20 years.

- Guaranteed buy of electricity from units built with equipment with technical know-how, design and construction (increases up to 30% on the basis of instructions issued by the Cabinet).

- Export of non-governmental renewable and clean power plants abroad.

 

Petrochemical Special Economic Zone Investment Incentives

- Issuance of all relevant licenses in the Special Area for economic activists by the Petrochemical Special Economic Area Organization (including authorization, operation, operating license, production certificate, export license, etc.)

 -Exemption from customs duties, commercial interest and all import duties on machinery, equipment and goods.

 -Customs exemption for export of manufactured products originating from foreign raw materials based on value added calculation.

- Exemption of 100% of the authorized share of imported products into the country due to the origin of domestic raw materials.

- Full exemption from VAT on intra-region transactions.

 -7 year direct tax exemption from licensing date.

- Assign and assign lands to investment projects and projects at the bachelor's price.

- Breathing in payment of land value installments (from 6 months to 12 months) as per upstream /middle /downstream plans.

- VAT exemption on machinery and equipment entering the Special Area from the mainland.

- No need to get a business card for exporting manufactured products out of the area or importing raw materials into the special area.

- Exemption from customs duties and commercial interest for re-export of goods and equipment following changes in the area.

- No restrictions on the transit of goods from the region to other free and special economic zones of the country.

- Allocating foreign exchange and rial resources for petrochemical and related industries (according to current regulations).

- Access to petrochemical upstream and middle petrochemicals feed.

- Infrastructure facilities in the area, including water, electricity and gas, docks, railways and airport access.

- There are amenities in the special area.

- Specific employment and social security regulations in the specific area.

According to Article 14 of the Law on the Establishment and Administration of Special Economic Zones:

- Ensure clear and explicit capital and outflow of capital for foreign investors.

- Tax exemption of at least 10 years for special areas to maintain competitiveness of manufactured products with other foreign manufacturers.

- To develop free and special zones and to encourage investors and reduce production costs to invest in these areas, there is a need that the activities arising from Article 132 of the direct tax law governing industrial and manufacturing activities in deprived areas. And is less developed and subject to Article 1 and Article 8 of the Code of Special Economic Zones, tax exemptions such as free zones and special zones also apply.

- Given that one of the major problems for investors in the region at present is obtaining financial and credit facilities from financial and credit institutions, there is a need for law and regulation, banks and financial institutions to adopt financial and regulatory requirements. The appropriate money with appropriate bank rates to compete in the capital market and bank guarantees for specific areas.

- Help the issuance of foreign investor's visas or the cancellation of visas such as free industrial zones to speed up foreign investment drumming.

- Help customs regulations and transfer of technology and machinery and equipment for the production line to speed up investment and employment-based production.

 

Investment incentives in Bandar Imam Khomeini

- Freedom of participation and investment for nationals and foreign nationals.

- Issuance of a tradable segregated warehouse bill and certificate of origin for import and export goods.

- Possibility of export, transit, transshipping and licensing of goods without any customs formalities.

- Entry of machinery, spare parts, capital vehicles and raw materials required to the area for production or completion of parts, without payment of customs duties.

- Ability to use the machinery, equipment and other facilities required to invest in the Special Economic Area without payment of duties and duties.

- Entry and exit of goods without payment of customs duties and commercial interest for processing, production, conversion, completion and....

- Exemption from customs duties for the import of goods made in the special zone into the country of value added. - Exemption from income tax in value added industries.

- Enjoy a 30-day warehousing of empty containers full of Khuzestan province bases.

- Ability to lease land and warehouses at competitive prices in the short and long term to applicants and investors.

- Guaranteeing foreign capital and its benefits with complete freedom of entry and exit of capital.

- Ability to enter the area without order registration, with least customs formalities and without payment of duties and duties.

- Possibility of exporting manufactured products without foreign exchange obligation.

- Ability to convert and pack goods for re-exports.

- Ability to stop goods with an initial shelf life of up to 3 months and renewable to detect management of the area.

- Exemption from VAT for area economic activists.

 

Investment incentives in the organization of industry, mining and trade

Customs exemption:

- Customs duties exemptions on production line machines subject to internalization and non-construction.

- Components imported by manufacturing units for use in the manufacture of domestic goods, which recognized by the Ministry of Mining and Commerce as non-domestic manufactured, will be exempt from 20% of the outstanding input rights.

- Knowledge based companies and institutions are exempt from paying customs duties, commercial interest and export duties.

Tax breaks for new industrial and mining units:

- Income from mining activities from the date of commencement of exploitation or extraction or activity is taxable in developed regions for five years and in less developed areas for ten years at a rate of zero percent.

- Taxable income of corporations and institutes of knowledge based on contracts and activities of research and development, commercialization and production of products and services of knowledge based for twenty years are exempt from tax under article 105 of the direct tax law.

- 50%  discount on tax rate if you export at least 20% of manufactured products with the participation of foreign investment.

Other Incentives:

- Possibility to use the National Development Fund's Rial and Currency Facilities.

- Possibility for development agencies (Iranian Industrial Development and Renovation Organization Iranian Mines and Minerals Development and Renovation Organization) to take part in less developed areas investment projects.

- Possibility of establishing new industries in industrial settlements of areas with limited industrial establishment (120 km radius of Tehran and 50 km of Isfahan and 30 km of centers of some provinces.

- Guaranteeing foreign investment for political risks by the government.

Foreign Investments enjoy all the same rights, protections and facilities as domestic investors.

- Ensure the entry and exit of the principal and the installments of investor's financial facilities.

- Freedom to export the enterprise's manufactured goods with the participation of a foreign investor.

- The possibility of temporary entry without payment of customs duties for processing export goods.

- Export Promotions and Subsidies (Exhibition and Marketing Costs).

- Exemption of exported goods from all duties.

- Possibility of foreign investment in all areas authorized for private sector activity in Iran.

- No restrictions volume of investment and percentage of participation.

- Freedom of entry of machinery and raw materials into free trade zones and special economic zones (excluding cars and yachts).

 

Investment incentives in the organization of cultural heritage, handicrafts and tourism

- Help build infrastructure in exemplary tourism zones, one-way services complexes and camps in the province.

- Long-term repayment facility payment.

- Credit technical help.

- Reduction in the cost of energy carriers.

 

Investment incentives at Ahvaz Water and Wastewater Company

- Guaranteed buy of potable water from desalination system and treated wastewater effluent from wastewater treatment plants after obtaining approval from specialized parent company and resource planning in development plans.

 

Encouragement investment in industrial estates

- Provide timely and prompt service to provide infrastructure services And at minimum prices to applicants for the construction of industrial units.

- Providing suitable land for industrial projects.

- Lack of the need for investors to obtain licenses from government agencies.

- The exclusion of Industrial Estates from the law of municipalities.

- Issuance of construction permits and end of work in the shortest possible time for free.

- Possibility to rent or buy ready-made halls to accelerate the operation of production units.

- Exemption from tax exemption under Article 132 of the Tax Code.

- The benefits of Note 3 of Article 138 of the Tax Code.

 

Encouragement investment in the agricultural sector

- The issuance of basically agreements for production units in the agricultural sector.

- Allocation of low-interest facilities.

- Allotment of land for greenhouse projects.

- Technical and expert reviews are done on the proposed projects.

- Guaranteed purchase of crops and gardening.

- Supply of improved seeds with high production potential for investors.

- Issuance of basically agreements.

- Payment of export awards for exporters of livestock products.

- Guaranteed investment through insurance and payment of insurance subsidy.

- Adjust the market.

- Donate Percentage of bank interest.

- Provide long-term investment loans.

- Allocating part of the annual budget to support and raise funds for nongovernmental funds to support agricultural development (Article 143 of the Fifth Five-Year Development Plan Act of the Islamic Republic of Iran).

- Promoting agricultural production in the form of partial compensation of interest subsidies and fees for bank help.

- Subsidies and other incentives (Article 145 (a) of the Fifth Five-Year Development Plan of the Islamic Republic of Iran).

- Effective tariffs for imports of all commodities and agricultural products in such ways that the exchange rate will always are in the interest of the domestic producer (Article B, Article 145 of the Fifth Five-Year Development Law of the Islamic Republic of Iran).

- The necessary legal and financial support for the formation of legal associations with the priority of agricultural production cooperatives to unified management and integration of agricultural land (Article 146 of the Fifth Development Law of the Islamic Republic of Iran).

- Financial support for the development of industrial slaughterhouses and the improvement of traditional and semi-industrial slaughter houses by the non-governmental sector (Article 149 (A) of the Five-Year Development Plan of the Islamic Republic of Iran).

- Upgrading the level of support to the agricultural sector to at least 35% of its production value (Article 149 (b) of the Five-Year Development Plan Act of the Islamic Republic of Iran).

 

Investment Tax Exemptions and Encouragements

Direction Tax Law

Article 81:

The income derived from all activities in the field of agriculture; animal rearing; stock breeding; fish farming; bee-keeping; poultry husbandry; hunting and fishing; agriculture; revival of pastures and forests, horticulture of any type and palm trees, is exempt from payment of taxes.

Article 132:

The income from producing and mining activities, which is derived and declared by producing and mining of non-governmental legal entities at producing or mining enterprises for whom exploitation licenses are issued, or with whom extraction and sale contracts are concluded, by relevant ministries as of date of execution of this Article, as well as service incomes of hospitals, hotels and tourism accommodation centers of the said individuals for whom exploitation licenses are issued as of the mentioned ate shall be exempt from the tax for a term of 5 years from the date of exploitation, extraction or activity. As regards the less developed regions, the tax rate of zero (0%) shall be applied for a period of ten (10) years.

A. The tax rate of zero (0%) is a method in which the taxpayers are bound to submit tax return, legal books, accounting documents (where applicable) for their incomes as provided for in this law in due time to National Tax Administration Organization. The said Organization shall study the relevant tax returns and determining taxable income based on documents and those tax returns and after determining taxable income of the taxpayers their tax shall be calculated on zero (0%) rate.

B. The tax rate of zero (0%) for producing and service units and other centers subject of this Article who employ more than 50 manpower one year shall be added for tax exemption in exchange for each year of manpower increase provided that they increase their manpower minimum 50% in comparison with the previous year. The number of manpower and also the increase of manpower must confirm by Ministry of Cooperative, Labor and Social Welfare and by presenting positive documents to Social Security Organization. In case of deduction of manpower from the minimum of the said increasing in the next year in which enjoy the tax encouragement as set forth in this Paragraph, the relevant of the year shall be claimed and collected. The retired, service-purchased and resigned personnel shall not considered deduction.

C. The term of enjoying from the tax rate of zero (0%) for the said economical units subject of this Article located at industrial parks or Special Economic Zones is two years and in case that the mentioned units locates in industrial parks or Special Economic Zones of the less developed zones shall be increased to 3 years.

D. The term and condition for enjoying any kind of tax exemption for natural and legal entities who are active in free zones and other regions of Iran is submitting tax return in due time. The tax return of legal entities includes balance sheet and profit and loss statement provided by National Tax Administration Organization.

E. For encouragement and incentives of economic investments in units subject of this Article in support Term via the tax rate of zero (0%) for each case, the investment in less developed regions and other regions shall be supported as follows.

1. In Less Developed Regions

The tax of the years after tax computation term with the tax rate of zero (0%) as mentioned in this Article shall be considered zero (0%) tax till the time the total of taxable income of the unit reaches twice of registered and paid capital and after that the relevant tax shall be computed and collected with rates described in Article 105 of this Article and its paragraphs.

2. In other Regions

50% of tax of the years after tax computation term mentioned in this Article shall be computed and collected with 100% exemption and the remaining 50% with the rates set forth in Article 105 of Direct Taxation Act and its Paragraphs. This order shall be continued till the date the total of taxable income of the enterprise become equals to registered and paid capital and after that the 100% of the relevant tax with the rates set forth in Article 105 and its Paragraphs of this Act shall be computed and collected. The transportation income of non-governmental entities shall be subject to tax encouragement of Part 1 and 2 of this Paragraph. The non-governmental entities subject of this Article founded before this Amendment in case of re-investment may enjoy from the tax encouragement of this Article. Any kind of investment made by obtaining the permit of the concerned legal authorities and for the purpose of foundation, development and renovation of the said enterprises for creating fixed assets excluding land is subject to this Paragraph.

F. The said land excluding at the end of Paragraph D regarding non-governmental legal entities at transportation, hospitals hotels and tourism accommodation centers shall not be executed merely at the limits determined at legal licenses issued by the concerned authorities.

G. In case of deduction of registered and paid capital of the mentioned entities enjoyed from tax encouragement set forth in this Article for increasing their capital the tax and relevant penalties shall be claimed and collected.

H. In case that the investment subject of this Article made by the partnership of foreign investors and by obtaining license from Iran Investment and Economic and Technical Aids, in exchange for each 5% of foreign partnership and investment the sum equal to 10% shall be added to tax encouragement of this Article in proportion to the registered and paid capital and maximum to 50%.

I. The foreign companies produced high quality products with prestigious brands in Iran by using capacity of domestic enterprises provided that export minimum 20% of their products as of date of signing contract with Iranian enterprises shall be enjoy 100 tax exemption at tax computation term and in case of termination of mentioned term shall enjoy 50% of tax exemption in proportion to declared income resulted from selling products at the said term mentioned in this Article.

J. The tax rate of zero (0%) and encouragement of this Article shall not apply to the income of producing and mining entities established within a 120-kilometer radius from the center of Tehran or within 50- kilometer radius from the center of Isfahan and within a 30-kilometers radius from the administrative centers of provinces and cities with a population exceeding 300,000, according to the latest census.

Information Technology (IT) Manufacturing Units, with the confirmation of the relevant Ministries and Deputy Office of the President for Scientific and Technology Affairs in any condition, shall enjoy the privileges of this Article. Also the tax of producing and mining enterprises within all Special Economic Zones and industrial parks except the Special Economic Zones and industrial parks within the 120 kilometers radius from Center of Tehran Province shall be calculated on tax rate of zero (0%) and enjoy tax encouragement.

Regarding Special Economic Zones and industrial parks or manufacturing units located within limitation of two or three provinces or cities, the criteria for determining the limitation shall be in accordance with the bylaws approved three (3) months before passing the law at the common suggestion of the Ministry of Industry, Mine and Trade, Ministry of Economic Affairs and Finance, Iran Management and Planning Organization and Iran's Environmental Protection Organization (IEPO) and approved by the Council of Ministers.

K. Iran Management and Planning Organization by assisting Ministry of Economic Affairs and Finance at the first quarter of each 5-yar Plan shall pronounce the list of less developed regions including province, city, town, county and rural district. In this respect some indices such as unemployment and investment for production rate are considered and shall be passed by the Cabinet. Till the service of new list, the list of former Plan is valid. The date of commencing activity attested by legal authorities shall be considered for computation of tax exemptions of the less developed regions.

L. All enterprises for internal and international tourism that hold exploitation permit from the related authorities before execution of this Article shall enjoy an annual exemption with regard to 50% of their applicable taxes for a term of 6 years after forcing of this Article. The provisions of this Article shall not be applicable regarding the income resulted from dispatching tourists to foreign countries.

M. The 100% of income declared by tourism and pilgrimage agencies having license from the concerned legal authorities that collected from absorbing foreign tourists or dispatching pilgrims to Saudi Arabia, Iraq or Syria shall be calculated on tax rate of zero (0%).

N. The tax rate of zero (0%) subject of this Article is merely includes income declared excluding incomes non-declared. This order is enforceable regarding all tax issues shall be calculated on tax rate of zero (0%) base in this Act and other rules and regulations.

O. The research costs of private legal entities and cooperatives in producing and industrial enterprises hold exploitation license from concerned ministries that cooperate with universities, research centers and higher education institutions having finalized license from Ministry of Science, Research and Technology and Ministry of Health and Medical Education made in the scope of Iran Scientific Comprehensive Drawing shall be exempted of tax payment maximum equal to 10%  of tax declared, provided that the annual progress report approved by universities research council and/or the concerned research centers and that the gross declared income  arising from producing and mining activities shall not be less than 5,000,000,000. The equal sum deposited to tax account of the said individuals shall not be accepted as tax expenses.

The executive instruction of this Paragraph upon the proposal of Iran Tax Organization shall be approved by minister Economic Affairs and Finance, minister of Industry, Mine and Trade, minister of Science, Research & Technology and minister of Health and Medical Education.

Note 1. All tax and computation exemptions with tax rate of zero (0%) exceed the current rules and regulations mentioned in this Article shall commence at the beginning of the year 2016 (beginning of the year 1395 in the Persian calendar

Article 138:

The individuals provide cash money for financing project-plan and revolving capital of producing enterprises in partnership agreements shall enjoy of tax on income exemption the sum equal to at least the expected profit rate in partnership agreements approved by the Money & Credit Council and for payer of profit the equal of said paid profit rate shall be considered as acceptable tax expenses.

Note 1. The individual enjoy the exemption of this Article are not entitled to withdraw their cash money from producing enterprise. In case of cutting cash money, equal to current price of the used exemption, the tax of the year that money withdrew shall be added.

Note 2. The discernment of realization of applying cash money for financing project-plan or revolving capital is by the relevant tax department.

Article 14:

100% of the income derived from exportation of non-oil services and goods and agricultural products and 20% of income derived from exportation of taxable raw materials shall be calculated on tax rate of zero (0%). The list of goods subject to this Article shall be commonly proposed by the ministries of Economic Affairs and Finance, Industry, Mine and Trade, Oil, Chamber of Commerce, Industry, Mines and Agriculture and approved by the Council of Ministers.

Note 1. 100% of the income derived from exportation of different goods that have been, or will be, imported to Iran on transit, and are exported without making any changes in the substance thereof or doing any works on them, shall be calculated on tax rate of zero (0%).

Note 2. The provisions of this Article shall be come into force after completion of execution term of 5th five-year of Iran Development Plan Jan. 5, 2011.

Article 143:

Ten percent of the tax on income derived from the selling of commodities accepted and sold in the Commodity Stocks, and 10% of the Tax on income of companies listed in the domestic or foreign stock exchanges, and 5% of the Tax on Profits of companies listed for OTC transactions of domestic or foreign stock exchanges, shall be rebated after the approval of the Stock Exchange Organization as of the year of enlistment until the year they are unlisted from the stock exchange. The above mentioned exemptions shall be doubled for companies listed in the domestic or foreign stock exchanges or OTC markets of domestic or foreign stock exchanges, provided that at the end of the fiscal period, and based upon the approval of the Stock Exchange Organization, they have at least 20% of free floating shares.

Free Zones Administration Act

Article 13:

Natural and legal persons engaged in any kind of economic activity in Arvand Free Zone are exempt from payment of tax on income and property tax as subject of Tax Direction Act from the date of the commencement of the operation mentioned in the permit for a term of twenty (20) years.  It is evident that in case of failure to submit tax return and the financial statements of the same year they shall not be subject to exemption and the tax of financial years shall be collected considering relevant rules and regulations.

Article 15:

Importation of goods produced in Arvand Free Zone to other parts of the country is exempt from payment of all or a part of customs duties and commercial benefit tax up to the added value thereof in Arvand free Zone, upon approval by the Council of Ministers.

Article 16:

Importation of goods produced in a Free Zone all or parts of whose raw materials are wholly or partly supplied domestically is exempt from all or a part (Proportionally) of the customs duties and commercial benefit tax relating to the respective domestic raw materials.

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