Based on the Foreign Investment Promotion and Protection Act (FIPPA), a broader definition was given to foreign investment, covering all types of investments from “Foreign Direct Investment” (FDI) to different types of project financing methods. Investment may be made in all areas where private sector activity is permitted, which includes mining. The Government guarantees that there is no restriction on the percentage of foreign shareholding or compensation made for losses sustained by the Foreign Investment resulting from the prohibition and/or interruption in the execution of financial agreements caused by an enactment of law and/or Cabinet decree, up to a maximum of matured installments.
Other provisions under this Law include:
- Streamlined and fast-tracked investment licensing application and approval process
- Creation of a one-stop shop called the “Center for Foreign Investment Services” at the Organization for Investment, Economic and Technical Assistance of Iran (OIETAI) for focused and efficient support for foreign investment undertakings in Iran
- Introduction of new legal options governing the government investor(s) relations
- More flexibility and facilitated regulatory practices for the access of foreign investors to foreign exchange for capital transfer purposes
Since 2002, 80% of the income from mining activities, which is derived and declared by producing and mining enterprises of whom exploitation licenses are issued, or with whom extraction and sale contracts are concluded, shall be exempt from income taxes for a term of 4 years from the commencement of exploitation or extraction. In less developed regions, the exemption shall apply to 100% of the income for a term of 20 years.