The FIPPA foreign-investment guide

The Foreign Investment Promotion and Protection Act, known as FIPPA, was enacted in 2002 (1381 in the Iranian calendar), replacing the 1955 Law on the Attraction and Protection of Foreign Investment. It is the main framework for admitting and protecting foreign capital in Iran, administered by the Organization for Investment, Economic and Technical Assistance of Iran (OIETAI). This guide is educational and is not investment advice.

Who can use FIPPA?

Article 1 of the Act defines a 'foreign investor' as non-Iranian natural or juridical persons, and also Iranians using capital of foreign origin, who hold the Article 6 license. Iranians living abroad and dual nationals can therefore obtain FIPPA coverage, provided the capital is brought in from outside the country (text of the 2002 Act, unchanged to date).

What forms of investment are covered?

Article 3 admits two forms: foreign direct investment in sectors open to the private sector, and contractual investment in all sectors through civil participation, buy-back arrangements, and build-operate-transfer (BOT) schemes, provided the return of capital and profit comes solely from the project's own performance and is not guaranteed by the government or by banks.

The Act's guarantees

• National treatment: foreign capital enjoys the same rights and protections as domestic capital (Article 8).
• Expropriation: nationalization and expropriation are prohibited except for the public interest, by legal process and without discrimination; in that case 'appropriate compensation on the basis of the real value of the investment immediately before' the taking is mandatory, and a compensation claim must be filed within one year (Article 9).
• Currency transfer: the principal and its profits, after taxes and statutory deductions, are transferable abroad in foreign exchange with the approval of the Foreign Investment Board and the confirmation of the Minister of Economy, and repatriating the principal requires three months' prior notice (Articles 13 to 15).
• Sourcing the transfer currency: the foreign exchange can come from three channels: purchase from the banking system, in which case the Central Bank is obligated to provide it; the enterprise's own export or service earnings; or the export of permitted goods. The investment license states which channel applies (Article 17). For contractual investments, if legislation or Cabinet decrees block the approved financial agreements, the government covers the resulting losses (Article 17, Note 2).

Two important limits are worth knowing. The value of goods and services produced by all FIPPA investments may not exceed 25 percent of each economic sector and 35 percent of each sub-sector, measured against domestic market supply at the time of licensing; these are macro market-share ratios, not per-company ownership caps, and export-oriented production (except crude oil) is exempt (Article 2(d)). Also, a foreign investor cannot own land in their own name, although an Iranian company created by the investment can (Note to Article 2 and Article 34 of the Implementing Regulations).

The licensing process

1. Submit the application to OIETAI, in Persian or English
2. Preliminary review and referral to the Foreign Investment Board within at most 15 days (the Board is chaired by the Deputy Minister of Economy, who heads OIETAI, with deputies of the Foreign Ministry, the Plan Organization, the Central Bank and the relevant ministries)
3. The Board decides within at most one month of referral (Note to Article 6; the commonly quoted '45 days' is the sum of these two deadlines, not a single statutory number)
4. The license is issued upon the confirmation and signature of the Minister of Economic Affairs and Finance

After licensing, the investor must bring in at least part of the capital within a period the Board sets for each project, or the license becomes void unless extended for justified reasons (Implementing Regulations, Article 32). Ownership changes above 30 percent must be reported (Article 33). Cash capital is registered at the date of its conversion into rials per the bank's certificate, and non-cash capital (machinery and equipment) at the customs valuation (Article 21). The Act sets no statutory minimum investment amount.

FIPPA or the free zones?

The free trade-industrial zones (Kish, Qeshm, Chabahar, Aras, Anzali, Arvand and Maku) operate under their own 1993 law: 100 percent foreign ownership is allowed there, and Article 13 of that law grants a tax exemption from the date of operation, which legal sources of 2023 to 2025 put at 20 years (an extension to 25 years has been discussed but its enactment is not confirmed). An investor can additionally obtain a FIPPA license for a free-zone project, adding the capital-transfer and compensation guarantees. Special Economic Zones count as mainland for FIPPA purposes.

Residency through investment

Under a Cabinet by-law of 30 June 2019, foreign investors (long-term bank deposits, securities, or productive investment) can obtain a renewable 5-year residence permit that also covers the family. The initial threshold was 250,000 dollars; UNCTAD's Investment Policy Monitor records its reduction to 90,000 dollars on 5 April 2022, and some specialist migration sources cite roughly a 100,000-dollar bank deposit as the current figure. The exact current amount should be confirmed with OIETAI.

Practical caveats of the sanctions era

Practical realities must be separated from the text of the law. Since 28 September 2025, UN, EU and UK sanctions have been reimposed through the snapback mechanism, further tightening banking channels. The Central Bank also reorganized the currency regime in a directive updated on 6 August 2025, creating a secondary FX market on the Iran Currency Exchange where foreign investors and exporters sell their currency through agent banks. In the same period, a Council of Ministers resolution of 28 September 2025 permitted importing gold as registered, FIPPA-protected foreign capital. The Article 17 transfer guarantees remain legally in force, but their execution depends in practice on banking access. On disputes, Article 19 provides for negotiation first and then the Iranian courts, unless a ratified bilateral investment treaty with the investor's home state provides another mechanism such as arbitration; Iran is not an ICSID member.

Summary

For capital brought in from abroad, FIPPA builds three main protections: national treatment, expropriation compensation, and a guaranteed transfer of principal and profits. The route runs through OIETAI and the Foreign Investment Board and takes about 45 days on paper. The choice between the mainland and the free zones depends on whether FIPPA's guarantees or the zones' incentives matter more for the project, and in practice the banking constraints of the sanctions era overshadow all of these routes.