Doing Business in Iran: An Overview
Various personalities and company chiefs have had long-term interests in doing business in Iran. A majority of them have however come with renewed interests following the recent lifting of sanctions that have stood for long. Some of the sanctions date back to 1979 while others are still outstanding to date meaning that any company or business leader interested in such may have to wait a little longer.
The population of Iran is the 16th in the entire world with a youth population of over 80 million people. The median age in this country is 28 years, hence giving the country such a burgeoning potential.
The middle class is the most robust and it is the target of most business leaders since this is the group that has very high consumer ability of services and foods.
However, in spite of the many business opportunities available, firms that need to invest in Iran should tread carefully. Any foreign company that needs to do business here should keep in a mind a few things.
Mr Nur Uman Aris, the lead Director of the Middle East and Africa Group of Singapore, says that foreign companies must first commit themselves to investing to compliance.
There should be adequate research so as to be sure of the rules that apply in Iran as far as licensing, banking, and sanctions are concerned. Beware of the pitfalls to avoid and also have a clue of who to turn to should there be a problem.
The economy of Iran has two major backbones: gas and oil, with the latter being the most prominent. The gas reserves of Iran are the second largest in the world while the gas reserves are the fourth largest in the world. The level of literacy among the youth is roughly 30 percent and the rate at which they enter the university is almost 60%.
It is notable that industrial sector and agricultural sector contribute minimally to the overall GDP, and it is in this regard that the Iranian government looks to diversify sources of revenue, enhance shock resiliency, and implement the economic and fiscal reforms.
Even though the country has immense challenges, business opportunities are plentiful. The country has over 50 airports, all of which are in dire need of expansion and upgrades so as to cater to the high number of new entrants due to the lifted sanctions. The aviation industry is in need of substantial investment. The railroad system, which is under the management of the Islamic Republic of Iran Railways, is planning to build over 25,000 kilometers of rail by 2026. The tourism sector needs a boost. Iran needs state of the art and post-modern hotels sufficient enough for the expanding tourism industry.
Volkswagen is also interested in the Iranian market. Due to the increased number of foreign cars that are being sold in Iran, Continental Tire is also in the process of having a business in Iran. Once the sanctions were lifted, the country has really opened up and it is expected that this will continue even as more sanctions are removed.