Registering foreign branch in Iran (only in Tehran or one of free zones)
- Definition of branch in Iranian law
Branch is one of the company’s units enabled to develop its sales and services in a region which may be quite far from the company head office. Scope of powers and independence of a main branch is determined through company consent and the branch legal responsibility shall be borne by the main company.
- Documents needed for foreign branch registration
- Foreign (main) company registration certificate,
- Main company Articles of Association,
- Latest company changes (if any regarding main company),
- Latest company approved financial report,
- Drawing up a power of attorney through which the branch manager is granted power of attorney to register a branch in Iran, in which the scope of powers of the branch manager has been included in detail.
Sample of power of attorney
Mr/ Ms …. is hereby granted with the power of attorney to register a branch of the company in Islamic Republic of Iran. Meanwhile, (s)he is authorized to undersign all the documents and books to register the branch, conclude contract in the name of main company, conduct the company products and services guaranty and warranty with respect to the main company bylaws and approvals, …
As per Iranian law, activities of a foreign company branch are limited to the following:
- Rendering foreign company goods or services after sales services,
- Conducting works of the contracts to be concluded by and between Iranian persons and foreign company,
- Examining and making basis for foreign company investment in Iran,
- Cooperating with Iranian technical and engineering companies to work in third countries,
- Increasing Islamic Republic of Iran non-oil exports,
- Rendering technical and engineering services and transferring knowhow and technology.
Other issues on foreign company branch:
Branch director to be introduced by the main company is considered as one of the main company personnel and branch director may be substituted on the discretion of the main company.
Registering a New Company in Iran(in all cities of main land or free zones.)
All foreign (non-Iranian) natural and legal persons may register companies in Iran and own 100% of such company shares and may also establish partnership with Iranian nationals with any ratio and register their companies.
A variety of companies may be registered as per Iranian law. However, usually two types of companies are registered: (1) limited liability company (2) private joint stock company.
In order to register limited liability Company in Iran, there should be at least two partners, while the same may be legal or natural persons, while there should be at least three shareholders for private joint stock company, in both of which the partners may be non-Iranians. In other words, 100% of the shares may be held by non-Iranians.
- Documents needed for foreign legal persons applying to register company (in case the shareholder is a foreign company)
- Foreign company registration certificate, authenticate by Iranian embassy in the relevant country,
- Introducing a person to undersign Articles of Association and Memorandum of Association and other documents for new company in Iran,
The letter wording sample to introduce the agent is as per the following:
Islamic Republic of Iran Registration Administration
Hereby, Mr/ Ms … is introduced as the representative of this company to register company and undersign Articles of Association and other company registration documents and attending new company board of directors meetings in Iran.
Note 1- Such letter shall be prepared under main company letterhead and been authenticated by Iranian Embassy in the relevant country together with company registration certificate.
Note 2- The representative may be non-Iranian, in which case, his/her passport shall be authenticated by Iranian Embassy.
Documents needed for foreign natural nationals requesting to register the company:
Copy of passport authenticated by Iranian Embassy in the relevant country
In order to register private joint-stock company, two persons shall be appointed as inspectors, whose duty includes preparing board of directors’ performance report for annual assemblies and stockholders.
Note 1- The inspectors shall be determined by the stockholders and in case of being non-Iranian, his/her passport shall be authenticated by Iranian Embassy.
Note 2- In case any of the members of the board of directors and inspectors are Iranian, presenting clean criminal records certificate shall be mandatory.
Note 3- Presenting clean criminal records certificate for foreign nationals is not mandatory.
Note 4- Regarding new company registration, in case one of the partners is a legal person (foreign company), then a certain part of such foreign company may be used.
Foreign company agent is a natural or legal person, who fulfills a certain part of the main company duties based on agency contract.
Therefore, in order to register agency, there should be a contract concluded between an Iranian person and the main company.
Like foreign company branch, the activities of agency in Iran are limite to the following:
- Rendering foreign company goods or services after sales services,
- Conducting works of the contracts to be concluded by and between Iranian persons and foreign company,
- Examining and making basis for foreign company investment in Iran,
- Cooperating with Iranian technical and engineering companies to work in third countries,
- Increasing Islamic Republic of Iran non-oil exports,
- Rendering technical and engineering services and transferring knowhow and technology.
- Documents needed for foreign company agency registration
- Foreign (main) company registration certificate,
- Main company Articles of Association,
- Latest company changes (if any regarding main company),
- Latest company approved financial report,
- A contract concluded by and between Iranian person and foreign company, through which in addition to the purport of agency contract, the main company authorizes the Iranian person to register the agency in Iran.