The majlis, Iran’s parliament, is putting the finishing touches to a new foreign investment bill, which is aimed at streamlining the country's investment laws for the first time in more than 46 years, reported IRNA , the official news agency.
The general draft of the bill already has been approved, and parliamentary forces are being mustered ahead of the second reading, which will endorse it as a law. If this happens, as all the signs suggest, foreign investors will receive an unprecedented foothold in the economic life of the country.
The new legislation includes significant changes to the old foreign investment law, by demanding greater transparency and providing better investment security to foreign entrepreneurs.
Commenting on the bill, Reza Abdullahi, the head of the economic commission of the parliament, noted that "state companies are looked at like private entities in the new law and there is no privilege between foreign and domestic investors." What this effectively means is that the new law lifts all obstacles in the way of foreign investors from holding stakes in the state-owned sectors of the Islamic Republic.
Iran, which is in dire need of foreign capital if it is to meet its stated development goals, has so far succeeded to attract investment in its lucrative oil and gas sectors according to buy-back contracts. These were opposed for a long time by conservative elements in the parliament and clergy, who saw them as a tool for giving over state control to foreign elements.
Another stumbling block in the country's outdated investment law that has been addressed in the new legislation is related to the transfer of foreign investors' capital and their profits for which the new bill has proposed some solutions. "We have projected new strategies in the new law which facilitates the transfer of capital and profits for foreign investors," Abdullahi said.
The new foreign investment law allows up to 49 percent ownership by a foreign entity in national economic projects of the country, although it still provides authority to the state cabinet to decide on the ceiling of shares to be granted to foreign investors.
The law will be valid for a minimum 10-year period, Abdullahi said, adding that foreign investors are entitled to claim reparations in case the law changes. The foreign investors furthermore have the right to refer legal claims to Iranian or international courts
"Given the fact that we need investment for our economic growth and boosting the country's economy and its exports as well as establishing new job opportunities, we support private investment in Iran and appeal to Iranians residing abroad as well as foreign investors to help us with necessary means," Abdullahi said. — (Albawaba-MEBG)
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