Incorporation of Iranian Companies

Incorporation of Iranian Companies

The interest for the incorporation of an Iranian Company is continuously increasing as more and more businessmen or individuals try to enter the Iran market following JCPOA and removal of sanctions against Iran.  Our lawyers guide and assist local and International clients in all steps of the incorporation process of a new Iranian company or the registration of a branch in Iran.

 Registration of Iranian Companies by Foreign Shareholders

 Since 2011, foreign companies may register a company with 100% ownership of the shares and capital. Out of 7 commercial companies provided in the Commercial Code of Iran, two models are Limited Liability Company and Private Joint Stock Company is more convenient in Iran.

1.     Limited Liability Company

This company comprises of at least 2 partners. The responsibility of each partner is up to the amount of its share of capital in the company and “Limited Liability Company” shall be mentioned in the name of the company, without mentioning the name of any shareholders in the name of the company, otherwise such a partner shall be assumed as within unlimited responsibility.

Compared to a private joint stock company, this company may be registered and run more easily. For example:

·         Deposit of capital in the bank at the registration stage is not required;

·         Annual general assembly is not required;

·         If the partners are below 12, there is no need for compulsory inspector;

·         Board members and general manager are not required to be elected periodically;

·         Board members and general manager may be elected from non-partners.

To see the list of documents for registration of a limited liability company Click Here.

2.     Private Joint Stock Company

This company comprises of at least 3 shareholders. The responsibility of each shareholder is up to the amount of its capital (nominal share) in the company and capital is divided into equal shares and “Private Joint Stock Company” shall be mentioned in the name of the company. The minimum capital is 1,000,000 Rials (around 27 USD), which may comprise cash or in kind capital.

Joint Stock Company must follow detailed procedure in its activities, the most important of which are as follows:

·         At least 35% of the capital must be deposited in an Iranian bank;

·         General Manager and board members must be reelected each two years;

·         Board members must me shareholders;

·         Two Inspectors must be re-elected annually;

·         General assembly must be convened annually;

To see the list of documents for registration of a limited liability company Click Here.

In addition to the Limited Liability Company and private joint stock company, the Iranian Commercial Code provides for the following types of business association, although they are not suitable to be used by the foreign shareholders:

(a)   Public Joint Stock Company (Sherkat Sahami Aam);

(b)   General partnership (Sherkat Tazamoni);

(c)   Limited partnership (Sherkat Mokhtalet Gheyr Sahami);

(d)   Mixed joint stock partnership (Sherkat Mokhtalet Sahami);

(e)   Proportional liability partnership (Sherkat Nesbi);

(f)    Production and consumption cooperative (Sherkat Ta’avoni Towlid va Masraf).