Being located on the mainland, a Special Economic Zone (SEZ) is where business and trade laws differ from that of the rest of the country. To facilitate export and import in these areas, they have been exempted from country’s customs regulations.
Although there might be some similarities between Free Trade Zones (FTZ) and Special Economic Zones (SEZ), they are different in many aspects. For instance:
- While there is a 15-year tax exemption in FTZ, tax regulations in SEZ are like the rest of the country.
- Retail sale in SEZ are allowed just for foreigners, but in FTZ both Iranians and foreigners can do so.
- Visa regulations in SEZ are just like the general rules of the country, but in FTZ visa is given in the borders.
- Labor regulations for hiring foreign workers in FTZs are special for those regions while in SEZs it is according to the country’s law.
As a general rule and as the names suggest, investment facilities in FTZs are more expanded than SEZs.
Map 1 Special Economic Zones in Iran. | Source: IranPartner, Supreme Council of Free Trade and Special Economic Zones
Now, there are 23 special economic zones throughout the country. However, as we see in the map, these 23 SEZs are located in only 14 provinces of the country among which Tehran has the highest number. The main advantages of SEZ in Iran are:
- Customs exemption up to the value added and payments for extra customs of foreign parts used in the production process
- Importing necessary machinery for the production line as well as office requirements free from customs duty
- Offering construction and completion licenses free of charge
- No time limit for abandoned goods
- Many other advantages for each of SEZ locations according to their local legislation
According to Iran’s law, the creation of a new SEZ is based on a pre-studied proposal by Supreme Council of Free Trade and Special Economic Zones and its approval by the Cabinet of Ministers. However, the approval of ministers should be passed by the Parliament. It is the duty of the Cabinet of Ministers to determine or change the responsible organization for the new SEZ.
Recently five new SEZs are being created and developed by two organizations affiliated to the Ministry of Industry, Mine, and Trade (MIMT): Industrial Development and Renovation Organization of Iran (IDRO) and Iranian Mines and Mining Industries Development And Renovation Organization (IMIDRO). While IDRO is responsible for two SEZs of Garmsar (located in Semnan) and Jahrom (located in Fars), IMIDRO is responsible for another three SEZs in under the names of Parsian (located in Hormozgan), Lamard (located in Fars), and Kashan (located in Isfahan).
SEZs are mainly located in a specific region based on the primary advantages and investment priorities of that given area in a particular field. If you want to know more about any of the introduced SEZs easily click here to request a tailored market research either for a specific region to understand its advantages and priorities in investment or a specific SEZ to figure out how and in which field is better to get involved in that specific region if any.
We also can help you meet the most relevant companies in your field through our Business Meeting service for better understanding of your opportunities in Iran as a whole market. However and if you have made your mind to start your business in Iran in a SEZ, FTZ, or any other place, we can help you through our other services including Entry Strategy, Company Registration, Office Setup, Recruitment, Work Permit & Residence Advisory, Legal, Tax, SSO Advisory. Besides, you can always rely on our help and contact us for more information on any business aspect in Iran you need to consult about.