Corporate Law at Iran
Sure! Here's a clear overview of Corporate Law in Iran:
Corporate Law in Iran
1. Legal Framework
The primary legal framework governing companies in Iran is the Iranian Commercial Code (ICC), enacted in 1932, which remains the main source of corporate law.
Supplementary laws include:
Law on Registration of Companies
Foreign Investment Promotion and Protection Act (FIPPA)
Various regulations by the Iranian Securities and Exchange Organization (SEO) for public companies.
Iran is not a member of the WTO or OECD, affecting foreign trade and investment regulations.
2. Types of Companies under Iranian Law
| Company Type | Persian Name | Key Features |
|---|---|---|
| Joint Stock Company | شرکت سهامی (Sherkat Sahami) | Public or private; shares issued; suitable for large business |
| Limited Liability Company | شرکت با مسئولیت محدود (Sherkat Ba Mas’ooliyat Mahdood) | Shareholders liable only to capital contribution |
| General Partnership | شرکت تضامنی (Sherkat Tezamen) | Partners jointly liable |
| Limited Partnership | شرکت مختلط غیرسهامی (Sherkat Mokhtalet Gheyr Sahami) | Mix of general and limited partners |
| Cooperative Company | شرکت تعاونی (Sherkat Ta’avoni) | Member-based cooperative activities |
3. Company Formation
The Company Registration Office under the Iranian Judiciary handles company registration.
Key documents for registration:
Articles of Association
Company Charter
Founders' declarations
Minimum capital varies by company type:
Limited Liability Company (LLC): Minimum 1,000,000 IRR (~very low in USD terms)
Joint Stock Company (JSC): Minimum 1,000,000,000 IRR (roughly higher)
4. Corporate Governance
Joint Stock Companies (JSC) must have:
Board of Directors
General Assembly of Shareholders
Auditors (mandatory)
Limited Liability Companies (LLC) managed by one or more managers appointed by shareholders.
Shareholders have voting rights based on shares (in JSC) or partnership interest (LLC).
5. Foreign Investment
Foreign investors can participate via:
Joint Ventures with Iranian companies
Establishing subsidiaries or branches (subject to FIPPA approval)
The Foreign Investment Promotion and Protection Act (FIPPA) guarantees:
Protection against expropriation
Remittance of profits abroad (subject to regulations)
Certain sectors are restricted or require government approval.
6. Accounting and Reporting
Companies must keep financial books in accordance with Iranian Accounting Standards.
Annual financial statements must be audited by licensed auditors.
Public companies are subject to additional disclosure rules regulated by the SEO.
7. Corporate Taxation
Corporate income tax rate is generally 25%.
Other taxes include VAT, withholding tax, and stamp duties.
Special tax incentives are available in free trade zones and under FIPPA.
8. Dissolution and Bankruptcy
Liquidation can be voluntary or court-ordered.
Bankruptcy governed by Commercial Code and judiciary rulings.
Creditors have priority claims during liquidation.
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