Establishing a Company in Iran

Setting up a business in Iran offers a variety of options for both local and foreign investors. The following provides an overview of the legal framework, corporate structures, registration procedures and practical considerations for establishing a company in Iran.

1. Legal & Regulatory Framework

The main governing laws for companies in Iran include the Commercial Code of Iran (1932) and its amendments, as well as the “Amended Legal Bill of a Part of Commercial Act of Iran”.
Registration of companies and branches is handled through the national Companies Registration Office (sometimes called the Deeds and Properties Registration Organisation) and associated authorities.
Foreign-investor rules: Non-Iranian natural or legal persons may establish companies in Iran (and in many cases hold 100 % of shares) subject to applicable regulations.

2. Common Corporate Structures

Under Iranian law there are several types of business entities. The most common for investors are:

Limited Liability Company (LLC) – In Persian “Sherkat ba Mas’ouliat Mahdood”. This is relatively simple and flexible, suitable for many commercial activities.
Private Joint Stock Company – In Persian “Sherkat Sahami Khass”. This form is frequently used for larger projects or where more formal corporate governance is desired.
Public Joint Stock Company – In Persian “Sherkat Sahami Am”. Suitable for companies that may raise capital publicly; fewer foreign investors use this form unless stock-exchange listing is intended.

Other less-used forms include general partnerships, limited partnerships, joint-stock partnerships, proportional liability partnerships and cooperatives.

Key differentiators:

Number of shareholders: For example, an LLC requires at least two shareholders, while a private joint stock company requires at least three.
Capital requirements: For a private joint stock company, the minimum charter capital is modest (e.g., around 1 million IRR historically) though in practice the real capital should match the scale of the business.
Corporate governance: Joint stock forms usually require a board of directors, auditors, formal meetings, whereas an LLC can be simpler.

3. Step-by-Step Company Establishment Procedure

While the exact details may vary depending upon location, business activity and whether there are foreign shareholders, the general process is as follows:

1. Choose the business structure and company name.

Select your preferred form (LLC, private joint stock, etc.).
Choose and reserve a company name. For example, in Iran you typically submit five alternative Persian names for approval.

2. Prepare the required documentation.

Articles of Association (AoA) / Charter and other constitutive documents.
Details of shareholders (natural or legal), directors/managers, registered address in Iran (an actual Iranian address is required).
If there are foreign shareholders: notarised/translated documents, power of attorney for representative in Iran, embassy/legalisation where required.
Bank deposit evidence: For example, for certain company types the shareholders must pay at least 35% of the subscribed capital into a bank account and obtain a bank certificate.

3. Submit application to the Companies Registration Office (CRO).

File the application (often online + paper-submission, with barcodes) along with all required documents and pay the registration fee.
Among the fees: registration fee, publication fees for the Official Gazette and newspaper.

4. Publication of the formation notice.

The new company must publish a notice of incorporation in the Official Gazette and a widely circulated Iranian newspaper.
Business may often commence once registration is approved even if publication is still pending (depending on case).

5. Obtain Commercial Code, register with tax & social insurance.

Within 60 days of incorporation, companies must apply for the commercial code (business registration number).
Register with the tax authority, obtain sealed accounting books, enrol employees in the social insurance scheme if any.

6. Start operations.

Once the company is registered and certified, it has legal personality and may sign contracts, open bank accounts (locally) and commence operations.
Some businesses require additional licences or permits (e.g., import/export, healthcare, industrial production).

4. Key Practical and Foreign-Investor Considerations

Foreign investors may establish companies with up to 100% foreign shareholding, although depending on sector, investment incentives or restrictions may apply.
An actual Iranian registered office is required; purely “nominal” offices are not acceptable.
For many company types, shareholder contributions in-kind (e.g., property) are permissible but must be appraised.
Registered capital: While a very low nominal amount may be accepted (historically ~1 million IRR), in practice the capital should be sufficient for the intended business scale.
Timeline & cost: Under ideal conditions the registration process can take as little as one to two weeks, but delays are common if documents are incomplete or require foreign legalisation. Fees vary but can include the bank deposit certificate, registration fee, publication costs.
Taxation: Corporate income tax is generally 25%. VAT and other taxes may apply depending on activity.
Special economic zones (SEZs): Iran offers special zones with incentives, simplifying certain requirements for businesses operating there.

5. Why Choose Iran for Company Establishment?

Strategic position: Iran bridges the Middle East, Central Asia and the Caucasus, offering access to large domestic and regional markets.
Foreign-friendly regime: Foreign individuals and companies can invest and own wholly Iranian companies under many circumstances.
Variety of structures: You may select a structure appropriate to your business size, type and investment.
Cost-effective incorporation: The mechanics of registering a company are relatively streamlined and cost-effective compared to many jurisdictions (assuming all paperwork is correct).
Incentives: Operating in special economic zones or export-oriented sectors may unlock additional benefits.

Once your company has been successfully established, it’s essential to protect your business identity through trademark registration.
Learn more in our detailed guide: Brand Registration in Iran with Foreign Ownership.