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Why should I invest in Iran

Iran qualifies from many respects to be a good location for investment and doing business. it has huge potential for investing after the termination of economic sanctions, Some of the features are highlighted below:
1. Vast domestic market with a population of 80 million growing steadily 2. Young, educated and cheap labor force 3. Excellent strategic geographical position 4. The quick and easy access to neighboring markets with a population of 350 to 400 million 5. Developed and ready infrastructure 6. Cheap and abundant raw materials, energy and transportation 7. The four-season climate and climate variability in the country 8. Fiscal incentives 9. Security and political stability 10. Untapped and consumer market ..

Iran says a cooperation agreement has been signed with a Russian provider of banking technological solutions to connect the country’s financial network with global payment systems.  
Iran says a cooperation agreement has been signed with a Russian provider of banking technological solutions to connect the country’s financial network with global payment systems.  

Iran says a cooperation agreement has been signed with a Russian provider of banking technological solutions to connect the country’s financial network with global payment systems.  

The agreement was signed between Iran’s Informatics Services Corporation (ISC) and Russia’s BPC Group of Companies.

Based on it, the two companies would cooperate in creating a standard banking card switch platform so as to provide a link between Iranian clients and international providers of financial services.

ISC Managing Director Seyyed Aboutaleb Najafi told Iran’s IRNA news agency that the Central Bank of Iran (CBI) had delegated the mission to create a link to global payment systems to his company.  The mission, he said, was in line with a CBI roadmap.

Najafi said a tender had been accordingly announced and nine bidders were picked out of which Russia’s BCP eventually won the contract.

Two other final bidders were France’s Worldline and Russia’s Openway, added the official.

“BPC has already carried out similar projects in several other countries,” said Najafi. “It has even already signed contracts with several Iranian banks to launch the switch platform needed to connect them to global payment services providers.”

Iran’s CBI announced in May that the Islamic Republic and Russia had agreed to integrate their bank card systems – a move that officials said would enable Iranian and Russian citizens to use their cards in each other’s countries.

“Iranian citizens who have a Shetab [Iran’s national payment system] card and those who have Russian [Mir] cards will be able to use ATMs in both countries,” the bank announced in a statement.

Traders watching shares developments at Tehran Stock Exchange (TSE).
Traders watching shares developments at Tehran Stock Exchange (TSE).

An Italian asset manager has purchased stakes in an Iranian financial company thus becoming the first foreign fund house to invest in the nation’s financial sector.  

The Financial Times reported that Azimut, a €48-billion group headquartered in Milan, had acquired 20 percent of Mofid Entekhab, an Iranian asset manager, for an undisclosed sum.

“We were looking for an opportunity to invest in a very interesting market. Iran is a great story,” it quoted Sergio Albarelli, chief executive of Azimut, as saying.

Azimut said it and Mofid Entekhab had ensured that the partnership would be compliant with economic sanctions requirements.

Mofid Entekhab is part of Iran’s privately held Mofid Group, the largest brokerage firm and financial advisory in Iran with $89 million in assets. Entekhab was carved out from its Mofid Securities business last year, the Financial Times reported.

Azimut would buy the stake through AZ International Holdings, its Luxembourg-based unit. Azimut and Mofid also plan to establish a fund, domiciled in Luxembourg, for foreign investors to invest in Iran.

“Our strategic goal is now to capitalize on our track record as the leading financial intermediary in Iran and create with Azimut a benchmark for the local asset management industry,” Hamid Azaraksh, chairman of Mofid Securities, was quoted as saying by the Financial Times reported.

He said his clients “will be able to access a new suite of financial advisory and wealth management services in line with the highest international standards”.

On the same front, Azimut announced in a statement posted on its website that the agreement it had signed in Tehran envisaged developing a range of investment strategies in local asset classes, building a local trained sales force to provide financial advisory and wealth management services and launching offshore funds for foreign investors.

Svatopluk Cumba, the ambassador of the Czech Republic to Iran, says his country plans to allocate a credit line of €100 million to support Iran’s infrastructure projects. 
Svatopluk Cumba, the ambassador of the Czech Republic to Iran, says his country plans to allocate a credit line of €100 million to support Iran’s infrastructure projects. 

The Czech Republic says it plans to allocate a credit line of €100 million to support Iran’s infrastructure projects. 

The announcement was made by Czech Ambassador to Tehran Svatopluk Cumba who said an agreement to the same effect would be signed between the two countries in the near future.

Cumba added that there had been an increase of 60 percent in exports from the Czech Republic to Iran over the past year, Iran’s official IRNA news agency reported.

He emphasized that a significant number of his country’s businesses were eager to enter the Iranian market to use its potentials.

The value of Iran’s trade activities with the Czech Republic reached a total of $27.1 million over first half of 2017, IRNA added quoting official figures. This, it said, was higher than the corresponding period last year.

The announcement of a new credit line for Iran investments follows several other recent moves in the same direction.

In late September, the Islamic Republic saw a historic opening in banking relations with Europe in September after banks from Austria, Denmark and France signed deals to establish credit lines for investments in the country.

The biggest such credit line was created by Austria’s Oberbank which signed deals with 14 Iranian private companies to allocate €1 billion for investments by Austrian companies in the country.

Another was created by Denmark’s Danske Bank with a total lending value of €500 million.

To the same effect, France’s state investment bank Bpifrance (BPI) announced plans to support French enterprises in their investments in Iran.

 

Iran’s national flag-carrier airline Iran Air has received two more turboprop planes from the Franco-Italian aviation player ATR. 
Iran’s national flag-carrier airline Iran Air has received two more turboprop planes from the Franco-Italian aviation player ATR. 

Franco-Italian aviation player ATR has delivered two more turboprop planes to Iran’s national flag-carrier airline Iran Air thus bringing the total number of deliveries to six from a package of 20. 

The planes can carry 70 passengers and would be used in flights over a maximum distance of 1,528 kilometers.

Iran Air took delivery of the first four ATR aircraft in May, with the rest due to be handed over to the country by the end of 2018, including a further three this year.

Iran Air’s deal with ATR that was signed in early 2017 includes options for a further 20 aircraft and a training program for Iranian pilots and engineers.

The planes will be operating among regional cities as part of a commercial plan, covering a populous crescent straddling Iran’s northwest and northeast.

Iran’s aviation officials had already said the ATR fleet may be based in the Caspian city of Rasht to connect small towns to big cities such as Tabriz and Mashhad in Iran and the Azerbaijani capital of Baku.

Iran is also renovating its aging fleet for international or long-distance flights under deals signed with Airbus and Boeing.

The deal with Boeing, signed in December, is for the purchase of 80 passenger planes. In January, Iran Air signed agreements to buy 118 planes from Airbus, before cutting the number to around 100.

Given the type of the orders, the total value of the three contracts for the purchase of 200 aircraft from Airbus, Boeing and ATR is less than $18 billion.

The country has so far received three Airbus jets and will get another by end-year. The first Boeing is due around May 2018.

BPI France CEO Nicolas Dufourcq.
BPI France CEO Nicolas Dufourcq.

France’s state investment bank Bpifrance (BPI) says it plans to provide funds to French companies that invest in the Iranian economy from next year, becoming the third European bank to do so after similar moves were announced last week by banks from Austria and Denmark. 

BPI France CEO Nicolas Dufourcq told reporters that his bank would grant up to €500 million ($598 million) in annual credits to companies that venture into the Iranian market.

Dufourcq added that his bank saw no risk of getting exposed to any punitive measures by the United States for its Iran business plans because it had no operation abroad.

“Excluding a force majeure case, we will be on their side in early 2018. We are the only French bank that can do it without risking US sanctions for a possible breach of remaining embargo rules,” he told Le Journal du Dimanche.

Several France-based enterprises are already pushing ahead with ambitious plans for investments in Iran. They include aviation giant Airbus as well as automakers PSA Group and Peugeot.

This past Thursday, Austria’s Oberbank signed a major finance deal with over a dozen Iranian banks based on which it would provide €1 billion in credits to the country’s companies that invest in the Iranian economy.

Oberbank’s initiative – that was seen in Tehran as the first of its kind in many years – was followed on the same day by a similar agreement between Denmark’s Danske Bank and several Iranian banks.

Accordingly, Danske Bank would allocate a credit line of €500 million for investments by Danish businesses in Iran.

Corn plantation in Azadshar in Iran's northern Golestan Province
Corn plantation in Azadshar in Iran’s northern Golestan Province

Iran is exploring overseas resources to ensure stable supplies of agricultural products for a rapidly urbanizing population in the face of the constraints of worsening land and water resources.

The semi-arid state has been investing in large areas of farmland overseas, where contracts for cultivation on nearly 800,000 to one million hectares in a number of countries have been signed and approved by the government, according to Agriculture Minister Mahmoud Hojjati.

“Due to the paucity of water resources, the government is seriously pursuing an overseas farming plan for some commodities, including grain corn and oilseeds,” the minister has said.

Kazakhstan, Ukraine, Brazil and Ghana have been cited in the media among the places which Iran was pushing for long-term leasing or ownership of farmlands with higher agribusiness potentials.

On Saturday, Brazil’s deputy Minister of Agriculture, Livestock, and Food Supply Aomar Roberto Novak told IRNA that Iranian farming was possible in his country and that companies from the two sides had to negotiate and reach a conclusion.

A canola field in Gavdasht in Iran’s northern Mazandaran Province

Across the border, Azerbaijan is the latest country where Iran has been carrying out agricultural projects in more temperate climates.

Rahim Motaharnejad, managing director of Hami holding, a non-governmental support group, said Iran had started cultivation of grain corn on 250 hectares, which was successful.

There are now plans for this year to carry out the project on a larger scale in partnership with Azerbaijani companies, he said.

Under the contract, the Azerbaijani side will provide land and supply water and the Iranian companies will contribute technical knowledge and management.

“We are following two goals: bringing in foreign exchange to the country through supply of products to the Azerbaijani market and producing certain commodities for domestic use such as barley and alfalfa,” Motaharnejad told IRNA.

His company is also pursuing agricultural projects in Ukraine which has plenty of water and very fertile land, “but we need the support of the government of the Islamic Republic of Iran,” he added.

Iran relies on imports for 90% of its requirements for water-intensive products such as wheat and oilseeds. Other water-guzzling crops such as watermelons have a steady army of critics in a country where aquifers are critically overdrafted.

A watermelon farm in Iran’s southern Hormozgan Province

On Monday, Tasnim cited state statistics indicating that Iran had exported 500,000 tonnes of watermelons, worth $100 million, in the five months since March.

Iraq, the UAE, Turkey, Kuwait, Afghanistan, Qatar and Oman were the biggest receivers of Iran’s watermelon shipments, a summertime staple to quench thirst in sizzling temperatures.

Other clients of Iran’s hydrating treat were ironically the countries with more abundant water resources such as Sweden, Poland, Hungary, Belarus, Germany, Albania, Georgia, Azerbaijan, Uzbekistan and Pakistan.

For years, Iran has been trying to modernize its farm sector and rebalance output toward dry farming and value-added crops which are increasing in demand among its population of over 80 million.

Farmers tilling a farm in Iran’s central Isfahan province

Current farming methods include open-land agriculture and green-house production but more modern practices such as hydroponics, a soil-less culture technology which uses less water and land, have yet to be introduced.

Iran exported its first consignment of wheat after many years this year, with state officials cheering it as a sign that the country’s plans to attain self-sufficiency in production of the strategic staple had materialized.

Results from state purchases from Iranian wheat growers so far this year are also robust, and buys of 8.8 million tonnes have already been secured, according to officials.

Food security is a key policy area for global state planners, and for Iran, it is additionally crucial in the face of a protracted drought where falling water tables are adversely affecting harvests and the basket of agricultural products is narrowing.

Food prices were a key driver of Iran’s double-digit inflation which shot over 40% under former president Mahmoud Ahmadinejad.

China's CITIC Group has signed an agreement with five Iranian banks to provide a credit line of $10 billion for Iran's infrastructure projects.
China’s CITIC Group has signed an agreement with five Iranian banks to provide a credit line of $10 billion for Iran’s infrastructure projects.

China has signed an agreement with Iran to provide a credit line of $10 billion for its infrastructure projects – what is seen as the biggest economic deal between the two countries after the removal of sanctions against the Islamic Republic in 2016.

The agreement was signed between China’s CITIC Group Corporation and a consortium of Iranian banks that included Bank of Industry and Mine, Refah Bank, Parsian Bank, Bank Pasargad and Export Development Bank of Iran.

Based on it, CITIC would provide loans to the Iranian banks to fund projects in areas such as energy, natural environment, transportation and the management of water resources.

Valiollah Seif, the governor of the Central Bank of Iran (CBI) who oversaw the signing of the agreement, was quoted by media as saying that the Iranian banks could start receiving loans from CITIC as early as October.

Seif emphasized that the CBI had shown “extensive flexibilities” toward CITIC in sealing the agreement. He added that this was based on the bank’s history of positive cooperation with the Islamic Republic without elaborating what those flexibilities constituted.

The Beijing-based CITIC Group Corporation, formerly the China International Trust and Investment Corporation, is a state-owned investment company established in 1979. It now owns 44 subsidiaries, including China CITIC Bank, CITIC Holding, CITIC Trust Co. and CITIC Merchant Co. Ltd in China, Hong Kong, the United States, Canada, Australia and New Zealand.

Iran media last September quoted a CITIC official as saying that the enterprise was considering to provide Iran with $10 billion of financing, mostly in the country’s steel, copper and coal projects.

The official, identified as Zhou Yafang by the English-language newspaper the Financial Tribune, added that the Chinese government was expected to issue the required permits by the end of 2016 and that the financing process would start in 2017.

Zhou had also emphasized that the financing is fully backed by China Export and Credit Insurance Corporation known as Sinosure.

 

Iran’s Kish Airline has announced an ambitious plan to purchase over a dozen new planes from global aviation giant Airbus and Boeing.
Iran’s Kish Airline has announced an ambitious plan to purchase over a dozen new planes from global aviation giant Airbus and Boeing.

Iran’s Kish Airline has announced an ambitious plan to purchase over a dozen new planes from global aviation giant Airbus and Boeing.

Kish Airline CEO Mohammad Taqi Jadidi was quoted by the domestic media that the plan envisaged buying 10 planes from Boeing and 6 more from Airbus.

Jadidi told Iran’s IRNA news agency that the new Airbus planes would be added to his company’s fleet before the end of the current Iranian calendar year (21 March 2018).

He added that Boeing planes would be purchased in the next Iranian year.

Nevertheless, the official did not specify which specific models the purchases would involve.

Kish Airline belongs to Kish Free Zone Organization and currently has 14 planes, including 2 Airbus-320, 2 Airbus-321, seven MD planes and 3 Fokker-100 planes, IRNA added in its report.

Airbus has already sealed deals to sell a total of 173 new aircraft to Iranian airlines with a collective value of tens of billions of dollars.

On the same front, Boeing had accrued orders and options for 140 planes, while the smaller European turboprop-maker ATR attracted orders and options for 40 aircraft.

Iran Air – the country’s national flag-carrier airline – appears to be the most active buyer of new planes. The company would buy a total of 220 new planes from Airbus, Boeing and ATR, covering both wide and narrow-bodied jets as well as turboprops. Airbus and ATR made their first deliveries of several planes over the past few months but Boeing deliveries would start in 2018.

Among the country’s smaller carriers, Iran Aseman Airlines would buy 30 new Boeing 737 Max 8 jets, with options for 30 more.

Iran Airtour would also purchase 45 Airbus A320neo aircraft.

And Zagros Airlines would acquire 28 Airbus aircraft, including 20 of its A320neo model and eight of its larger A330neo.

Iran says international air traffic over its skies has reached above 1,400 planes per day in what is believed to be a result of growing confidence in the country’s safe airspace.
Iran says international air traffic over its skies has reached above 1,400 planes per day in what is believed to be a result of growing confidence in the country’s safe airspace.

Iran says at least 1,400 planes cross its skies everyday – an announcement that a top military official in Tehran says is a proof of the country’s airspace security for regional and transregional airliners.

“Today, Iran has been chosen [by airliners] as the safest air corridor in the Middle East,” Brigadier General Farzad Esmaili, the commander of Iran’s Air Defense Force, was quoted as saying by the domestic media.

The official added that over 700,000 international flights carrying a collective of above 50 million passengers had used Iran’s skies over the past Iranian calendar that started 21 March 2016.

Official figures show around 450 planes crossed Iran’s skies every day in 2014. However, the insurgency that Daesh militants waged in Iraq as well as the conflict in Ukraine pushed the number up to as high as 900 planes per day the next year, marking an increase of 100 percent.

The diplomatic crisis between Qatar and Saudi Arabia and its allies forced the tiny Persian Gulf state to use Iran’s airspace for its international flights.

Accordingly, officials said this introduced an increase of 20 percent in Iran’s air traffic.

The rise in Qatar’s use of Iran’s airspace has also provided the Islamic Republic with extra air transportation fee revenues. To the same effect, the domestic media said Iran was entitled to at least $13 million per month in air traffic fees.

In June, Saudi Arabia, Oman, Kuwait, Bahrain, and the UAE closed their airspace to the Qatari planes after they cut diplomatic ties with the country, accusing the latter of supporting terrorism.

The Iranian railway on the Gorgan-Gonbad-e Kavus route
The Iranian railway on the Gorgan-Gonbad-e Kavus route

A Russian bank has agreed to provide 1 billion euros to electrify a 500 km railway route in northern Iran, state news agency IRNA has quoted a senior official as saying.

Head of the Islamic Republic of Iran Railways for northern network, Yusef Gheranpasha, said the bank will finance the electrification of the line between the cities of Garmsar and Gorgan.

“With the agreement of the Russian bank to provide finance, the project will soon be put into the implementation phase and become operational within three years,” the official said without identifying the lender.

The loan is related to a 1.2 billion euro deal that Russia and Iran signed to electrify the Garmsar to Inche Burun line during a visit by Russian President Vladimir Putin to Tehran in November 2015.

The railway line extends into Turkmenistan and Kazakhstan, linking Central Asia to the Persian Gulf and beyond.

Russian Railways officials have said the company will start the project in 2018. The contract covers design, sourcing of materials and equipment and construction of 32 stations and 95 tunnels, 7 traction substations, 11 section pillars, 6 duty posts of the contact station and the power supply administration building.

Russia will be financing the project as part of its $5 billion credit line for infrastructure projects in Iran. Russian state lender Vnesheconombank will grant another 2 billion euro export loan to the Islamic Republic.

The news came amid the World Bank’s announcement that it was not currently looking to finance any projects in Iran.

“We are not considering financing any projects in Iran right now,” Reuters quoted an unnamed World Bank spokesman as saying Tuesday.

The Russians have also announced readiness to electrify the 600 km railway route between Tehran and the northwestern city of Tabriz, which is also eyed by the Germans and Italians.

The Tabriz-Jolfa route in northwestern Iran is currently the country’s only operational electrified railway line.

Last month, Russia’s largest manufacturer of locomotives and rail equipment, CJSC Transmashholding, signed a 2.5 billion euro deal with IDRO Group in Tehran for joint production of rolling stock in Iran.

Transmashholding will hold an 80% stake in the joint venture, taking over Iran’s Wagon Pars Company to produce railroad cars in the country.

It was among the biggest contracts which Iran has signed with international companies after the removal of sanctions on the Islamic Republic.

In July, Iran signed another deal worth 1.2 billion euros with Italy’s state railway company Ferrovie dello Stato (FS) to build a high-speed railway between the central cities of Arak and Qom.

Later in the month, French transport company Alstom signed a joint agreement for the construction of subway carriages in Iran.

The Export-Import Bank of China (EXIM) also signed a $1.5 billion deal to finance the electrification of a high-speed rail line between the Iranian cities of Tehran and Mashhad.

The projects are part of Iran’s $25 billion investment roadmap over the next 10 years to modernize and expand the country’s railway network.

Under the plan, Iran seeks to stretch out the nationwide railroad line to 25,000 kilometers by 2025 from under 15,000 kilometers now.

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