Investment Opportunities in Iran

Posted on Posted in Business Guidelines

There are numerous foreign companies seizing the investment opportunity in Iran ahead of their competitors. While the oil and gas sector gets the most attention, Iran’s diversified economy is attracting companies across industries. In particular, consumer-oriented sectors are counting on Iran’s large (nearly 80 million), young(more than 60% under 30 years old), and urbanized (more than 70%) population to be loyal customers in the future.

For example, South Korea–based LG Electronics, which maintained an Iran presence despite sanctions, is in discussions to establish a manufacturing plant in Tehran that will produce more than 1.5 million refrigerators, televisions, and washing machines per year. French automaker Renault has taken advantage of sanctions relief,assembling nearly 15,000 cars between January and April, a sevenfold increase from the same period in 2015. And Danish pharmaceutical company Novo Nordisk is building on its Iran presence by doubling local staff to nearly 300 and investing $76 million in a new factory.

The country’s tourism sector attracted fewer than five million visitors in 2014 while neighboring Turkey attracted 39 million people. Given Iran’s top 10 ranking in the number of UNESCO world heritage cultural sites in the world, this is poised to change. Luxury hotel brand Melia is joining Accor and Rotana to open the country’s first international five-star hotel, the Gran Melia Ghoo.

Looking further into the future, Iran is a potential global trade hub. Already nearly 20% of oil trade passes through the Strait of Hormuz, the narrow waterway off Iran’s southern coast, which is the only sea route out of the Persian Gulf and one of the world’s most strategic transit points. Furthermore, the International North-South Transport Corridor will make Iran a key link in connecting India, Central Asia, and Russia, while Iran’s role as part of China’s new Silk Road (especially with rail links) could boost bilateral trade between those countries to up to $600 billion. There are lucrative export and investment opportunities elsewhere in the region, such as in Afghanistan, which is seeking to tap mineral wealth, and in emerging giants such as India, Pakistan, and Turkey, which need natural gas to fuel economic development.

 

FAR law firm

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