As mentioned before, payment method is a very significant step in organizing importations. Generally, we have two types of payments in Iran: advance payment and LC.
In advance payment, the company pays the fee and other costs in cash, without the involvement of any bank. Actually, due to monetary limitations in Iran, Iranian companies usually use the services of an exchange office to transfer money. Such exchange offices have bank accounts in many countries and use such accounts to transfer money and receive an amount of interest for the services they provide.
The second method of payment is LC. As it is common in many countries, a bank in the country of origin and a corresponding bank in the supplier`s country handle payment on the behalf of the company and the supplier. As a matter of fact, this method solves the issue of trust and both parties are sure that they will receive the goods and money. In this method, the banks replace the parties in the transaction. LC is the most common way of payment in Iran and Iranian banks easily handle it for businessmen and companies. The interest that the bank takes is usually low.
When the payment was taken care of, then comes inspection and forwarding arrangements.
To be continued …
FAR Law Firm