How to enter to Iran's market
How can I invest in Iran as a foreign investor?

If you are a strategic investor then you must apply for a FIPPA license from the Organization for Investment Economic and Technical Assistance of the Ministry of Economy of Iran. If you only want to invest in Tehran Stock Exchange then you just need to take a license from the Security Exchange Organization (SEO).
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Who is a foreign investor?

Non-Iranians and Iranians who are living overseas. To be more specific, if the incoming source of capital is not based in Iran, it is considered foreign investment and investors will go through processes of fund transfer and opening necessary bank accounts for their investment.
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What is FIPPA?

The law protecting foreign investment in Iran is the Foreign Investment Promotion and Protection Act ratified in 2002, which is hereinafter referred to as FIPPA.

Also you might be interested in FAQ on FIPPA.
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Is it possible for foreign investors to trade in Teheran Stock Exchange?

People from other countries can invest in Tehran stock Exchange. Foreign investors can invest in TSE, directly or indirectly (mutual funds) by inter-mediation of TSE members. For real entities we recommend Behgozin`s mutual funds with magnificent performance.
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Can foreign citizens trade stocks on Tehran Stock Exchange?

Yes, foreign investors must apply for an Investment license from the Security Exchange Organization (SEO) and take a “trading code” from (SEO). Then they must open a bank account in Iran and transfer the money to the Iranian bank.
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What is a trading code? How can I obtain it?

It's a unique trading ID that you need to have in order to be able to either own or trade shares or bonds in TSE and IFB. You are not required to have this trading code to invest in the mutual funds. For more information on how to obtain a trading code, please contact us at: invest@behgozinbroker.com
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What steps should be taken to register a company in Iran?

Foreign individuals and institutes can register companies in Iran, by following these steps:

1. Find a partner

2. Go to the company registering website and fill in the online form.

3. Select the legal form of company and propose 5 company names. A name not used before, is allocated and then a tracking code is shown.

4. Define the length and kind of activity for the company.

5. The location and address of the company is needed.

6. Select the equity of the company, which for limited companies begins from 100,000 tomans ($28).

7. All partners' identifications and addresses must be mentioned.

8. Define each partner's share and his/her position in the company.

9. Define branches and the date of the fiscal year.

10. Prepare the articles of association and specific rules of the company, and upload it on the Company Registration General Office website of the State Organization for Registration of Deeds and Properties.

11. After passing all steps and receiving the registration code, publish the newspaper annunciation. After this the company can start to work formally.
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Taxation in Iran
How is the tax system in Iran?

Iran has a rather simple tax system. While in practice finalizing tax for companies can take up to several years, a good tax advisor can assure you that there is nothing much to worry about. Taxation for natural persons and foreigners is more straightforward though. But the most interesting part is when you look at the taxation from a foreign investor's perspective.
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How much tax should we pay in the capital market?

Investors who come to Iran cannot believe their eyes when they find out about a fixed 0.5% tax rate on transfer of shares in the stock exchange, tax exemption on interest received from fixed-income instruments and absence of double taxation as there is no tax on dividends received. Tax reliefs and exemptions can last for decades, if you start the right business in the right region, especially if you intend to export your goods and services from Iran.
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Who pays tax?

Basically all properties and estates owned and any income earned inside Iran is taxable. Iranian natural persons who reside inside Iran and Iranian legal persons pay also tax based on the income that is earned outside Iran.
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When do we pay tax?

The fiscal year starts March 20th and ends on March 19th. Companies may choose their fiscal year based on their articles of association. The deadline for the submission of self-assessment tax is June 20th for professions; and companies must submit the self-assessment up to 4 months after the end of each fiscal year.
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Do we pay tax on capital gains?

Nope! There is a 4% tax on transfer of shares, based on the book value. For companies listed in stock exchanges, there is an unbelievable fixed 0.5% tax rate on the transfer of shares. No other tax is provisioned in this matter. There is no extra capital gain tax. The downside is that one cannot offset capital loss with other taxable incomes. This tax is paid by brokerage companies on the taxpayer's behalf.
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Do we pay tax on interest received?

Nope! Interest received on treasury bills, bank deposits and Sukuk that are issued by entities under the license of the central bank of Iran are tax exempted.
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Is there double taxation?

Nope! You do not pay tax on dividends you receive
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What is corporate tax?

Iranian legal entities pay a 25% corporate tax on the income earned inside and outside Iran. Income from non-profit activities through non-commercial Iranian legal entities is not taxed. For each 10% increase in taxable income in comparison to the previous years taxable income there is 1% decrease in tax rate (up to 5% reduction in tax rate). Income from dividends is not taxable.

Foreign legal entities and institutions outside Iran have to pay tax for the income earned inside Iran. The tax rate for services varies between 10 to 40 percent of the total income received. Income earned from use of capital is treated as income on profession. Foreign insurance companies pay a 2% tax on reinsurance and interest on its respective deposit. Transportation companies active in Iran pay a 5% tax on total income received from transportation initiated from Iran, whether the income is received inside or outside.
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Want a relief? Invest anew! Export! Go Public!

New businesses for activities in industrial, mineral sectors as well as services in healthcare and tourism which have obtained license from respective authorities, have a 0% tax rate for 5 years (10 years in less developed regions). Zero tax rate means they have to submit the tax self-assessment to the tax authority.

If the business unit has more than 50 employees for every workforce increase of 50% in each year the 0% tax rate is extended for an extra year. There is also 2 extra years for units located in special industrial or economic zones (3 years for less developed zones). After the end of this period, as long as the earned taxable income has not reached two times the invested capital in the business unit, there is a 50% reduction in payable tax for these units (100% reduction in less developed regions). For every 5% of initial investment by a foreign co-investor, tax rate discrimination is extended by 10% (up to 50%).

Foreign companies who use the Iranian manufacturing capacity to export at least 20% of the products with a respectable brand can enjoy the zero tax rate during this period and a 50% reduction on tax payable after the period.

There is a 100% tax reduction on export of finished goods and services and a 20% tax reduction on export of raw materials and there is a 0% tax rate for re-export of goods.

There is a 10% tax reduction on goods sold on commodity exchange and companies listed on the stock exchange and OTC trading can enjoy up to 20% tax reduction.
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Property Rent Income! Go energy efficient!

All cash and non-cash income from property is taxable after a 25% reduction. Owners of energy-efficient building complexes with more than 3 apartments, enjoy 100% tax exemption while other owners can enjoy exemption for up to 150 square meters in Tehran and 200 meters in other cities.

Vacant properties in cities with a population of more than 100,000 are taxable after 2 years. The tax rate is 50% of the assessed tax in the second year of vacancy, 100% in the third year, 150% in the fourth year and thereon.

There is a %5 property transfer and a 2% tax on transfer of goodwill of the property. This tax is calculated based on transaction value of the property which is an assessment by a special committee. This assessment can be up to 20% of the average price of the property in the region. First transfer of a low to medium-priced property is exempted from transfer tax. Income from construction and sale of new properties is also subject to income tax regarding businesses and corporate tax.
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Cultivate! Tax Free!

All agricultural activities are tax exempted.
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Do not worry about big brother! It does pay to work more.

Generally cash income from salary and up to 25% of non-cash incomes are taxable; there are minor exemptions, however. Tax exemption on total annual income from salary is expressed in annual budget law (currently 138 m IRR). Income up to 7 times the minimum wage is taxable by 10%, and excess income is taxable at a 20% rate. Payments made by employers to natural persons who are not employed (like advisory and other services) have a 10% tax rate regardless of mentioned exemption. Salary tax must be paid by salary payers on behalf of employees and they are held responsible for proper payment of taxes on behalf of taxpayers. The exception to this is the salary paid by a foreign entity who has no official branch inside Iran. In this case the employee has the responsibility of proper payment of tax. Employees in less developed regions have a 50% reduction in their taxes.
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Tax on professions

Income earned from practicing a profession or bearing other titles unless otherwise stated in the law, is taxable under the given title. Taxable income is calculated by subtracting respective cost and depreciation from the total revenue from the sale of goods and services. Based on the level of activity they may keep ledgers and other legal books. Taxes are payable based on self-assessment by the taxpayer, while randomly a few of the self-assessments are thoroughly reviewed. Professions can enjoy the same tax exemptions stated for salary income taxpayers. Tax rates are subject to tax rates on natural persons

Up to 500,000,000 IRR 15%
Between 500,000,000 and 1,000,000,000 IRR 20%
More Than 1,000,000,000 IRR 25%

For each 10% increase in taxable income in comparison to the previous years taxable income there is 1% decrease in tax rate (up to 5% reduction in tax rate). Income from dividends are not taxable.
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Occasional Income

Occasional income like unremunerated payments (unless paid by charities, government or in case of natural disasters) or discriminatory transactions are subject to taxation. The tax rate is the same as tax on profession.
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About the capital market
What are the trading hours at Tehran Stock Exchange (TSE)?

For Cash Market: Preopening 8:30 to 9:00, Trading 9:00 to 12:30

For Futures Market: Trading 9:00 to 12:30

These hours are effective Saturdays to Wednesdays, except public holidays.
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What is TSE?

Tehran Stock Exchanges (TSE) is the first and biggest stock exchange in Iran. Tehran Stock Exchange was established in 1968. In 2005, the new Capital Market Law of Iran was approved by the parliament, and in 2006, according to this act, TSE was demutualized and reestablished as a joint stock company with over 6000 shareholders and a seven-member board. You can also check Regulations Governing Foreign Investment in the Iranian Exchanges and OTC Markets
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What types of securities are listed and traded on TSE?

The following instruments are available on TSE:

Stocks (common and subscription rights)

Bonds (Participants Certificate and Sukuk)

Derivatives (Single stock future and Stock options)*

Housing Mortgage Rights (HMR)

Exchange Traded Funds (ETF)
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In what currency are the TSE and IFB trades denominated?

TSE and IFB trades are denominated in Iranian Rials (IRR). The money is transferred through exchange offices, calculated based on the day's market spot exchange rate. Due to limitations imposed by international sanctions, it is not possible to electronically transfer money to Iran from abroad.
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How can I buy shares or invest in the stock market?

For trading at TSE, one must choose a member firm (broker) to trade through. Using the TSE Trading System, your stockbroker will buy or sell shares based on your instructions. Currently, there are 107 member firms operating at TSE. They get their license from the Securities and Exchange Organization (SEO).
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Can I trade listed shares over the internet?

Yes. Behgozin Brokerage Company is proud to offer on-line trading service.
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What is a trading halt?

A Trading Halt is used when there is any information that is considered likely to materially affect investment decisions, and SEO and TSE deem it necessary to disclose that to the public. Also, trading is halted two days before the general assembly of listed companies.
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What are the Council and SEO?

The Securities & Exchange High Council (Council) and the Securities and Exchange Organization (SEO) are regulators and supervisors of the Iranian capital market.
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Are any foreign companies listed on TSE?

So far, no. Just Iranian companies are listed at TSE. However, there is no prohibition for that.
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What is 'Daily Price Fluctuation Limit'?

In order to maintain a stable stock market, the daily price fluctuation limit of stocks, and participation certificates are set at 5% of the closing price of the preceding business day. For subscription rights the limit is set at 10%.
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What does the phrase 'base volume' refer to?

Base Volume means the number of securities of the same type, which are to be traded daily so that the total percentage of the spread during the day can serve as a base to determine the price for the following day. This was ratified by the regulatory body, SEO, to control the unreasonable rise in equity prices. The base volume differs for various companies in diverse industries. However, the O.T.C. Market is not restricted to Base Volume.
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Is there a special mechanism for trading newly-listed stocks (in IPO)?

Yes, newly listed stocks are sold via an auction method; buyers place their orders at different prices with a broker who puts the orders into the trading system. The seller offers the shares at the price at which the greatest orders were placed. The seller offers 5 to 10 percent of the share in the first session. Daily price limits can only come into effect the day after the IPO.
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What is the priority in sorting orders in the trading system?

During auction trading, priority among orders is decided on two principles: price and time priority, to ensure that all orders are handled equally and transactions proceed smoothly.

Under the price priority rule, a selling (buying) order with the lowest (highest) price takes precedence. Under the time priority rule, an earlier order takes precedence over others at the same price.
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What is settlement, and how does it work?

Settlement is the transfer of funds and securities between buyer and seller once a transaction has been agreed upon. Currently, settlement for trades executed on the TSE market takes place on the 3rd business day after the transaction often referred to as T+3. The Central Securities Depository of Iran (CSDI) acts as central counter party to settlement, so that funds are transferred between members (brokers) and CSDI, and securities are transferred between client accounts. Transactions are settled by book-entry transfer between accounts.
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What is CSDI?

Central Securities Depository of Iran (CSDI) is a public company, which handles the clearing and settlement operations, and also acts as the Central Depository for all securities in Iran. The main shareholders of CSDI are TSE, banks and member firms.
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Is it possible for me to open several accounts with different brokers?

Yes, it is possible to have several trading accounts with more than one broker; however, the trading permit (code) is unique for each person.
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Is it the TSE's requirement that all common shares should pay dividend?

If the company has made a profit, the distribution of at least 10 percent of the annual profit among the shareholders is obligatory. Paying more than this rate depends on the resolution of the general assembly of the company.
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How can I get a disclosure of a company listed on TSE?

Annual, semi-annual and quarterly reports and any information that could affect the stock process have to be submitted to the SEO on a regular basis by every listed company. These reports and other financial statements are stored in the SEO library and are available to the public. Besides, SEO has implemented a network: CODAL (www.codal.ir), through which information affecting the price will be issued directly. All the information is free by now, but it is in Farsi. However, Behgozin Brokerage Company can provide English disclosure of any company listed on TSE.
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Are capital gains and dividends exempt from taxes?

Yes, capital gains and dividends are tax free for both Iranians and foreign investors.
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What type of Market Data do TSE offer and how is it distributed?

For price and other stock market information, investors can rely on the following sources: Behgozin Brokerage Company's online trading system, Tehran Stock Exchange, media (newspapers, television and radio), and information service companies.

In addition, the TSE's Market Department (statistics section) issues statistical Weekly and Monthly reports and a Fact Book on a regular basis. These contain among other things, trading statistics, the composite index and sectorial indices, market capitalization of listed companies, volume and value traded. These publications are available on the TSE's website. All this information is free.
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I would like to know if there are any mutual funds or exchange traded funds available to be bought on international exchanges with exposure to Iran.

Not yet. But we at Behgozin are considering this issue in order to ease the availability of our funds to foreign investors.
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Do you trade crude oil at TSE?

No but one can trade petrochemical products at Iran Commodity Exchange.
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Are Futures and Options offered in the stock exchange? If not, when do you plan to introduce them?

The Futures Market was launched in August 2010 on the shares listed at TSE, and options launched in 2011; however is has a low volume.
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Which method is being used for calculating TSE's indexes?

Various indices are calculated in TSE such as Price index (TEPIX) and Dividend index (TEDIX), Price and Dividend index (TEDPIX), index of 30 blue-chips, and free float index. In addition, indexes of 37 industries are also calculated. All of them are capitalization-weighted indexes.
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How much should you pay commission in order to trade in Tehran Stock Exchange?

The following Commissions should be paid for transactions in Tehran Stock Exchange:

  • Brokers commission: Both buyer and seller should pay 0.4 percent of the transaction value.
  • Stock Exchange Company's commission: 0.08 percent of the transaction value up to 200 million Rials 60 percent of wich should be paid by the buyer and 40 percent by the seller.
  • Commission of Stock Exchange Organization's supervision right: 0.08 percent of the transaction value up to 200 million Rials 60 percent of which should be paid by the buyer and 40 percent by the seller.
  • Commission of Central Securities Depository: 0.025 percent of the transaction value up to 200 million Rials 60 percent of which should be paid by the buyer and 40 percent by the seller.
  • Commission of Tehran Securities Exchange Technology Company: 0.03 percent of the transaction value up to 200 million Rials 60 percent of which should be paid by the buyer and 40 percent by the seller.
  • Transaction Tax:0.5 percent of the transaction value should be paid by the seller.

Total Commission paid by buyer = 0.486 percent of transactions value

Total Commission paid by seller = 0.529 percent of transactions value

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About Behgozin Brokerage Company
Can I trade with a TSE broker through the internet? Does Iran have online stock trading with streaming quotes to the Tehran Stock Exchange?

Yes. Behgozin can offer online trading services.
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Are you the largest brokerage firm in Iran?

Behgozin is one of the best Tehran exchange brokerages and it is among the top 5 Brokerage Companies.

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What are the steps to open a stock account for a US citizen who lives outside Iran?

Foreign investors must apply for an Investment license from the Security Exchange Organization (SEO) and then they must open a bank account in Iran and transfer the money to the relevant Iranian bank.

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Can I open a brokerage account in Behgozin Brokerage Company?

We would be pleased to help you invest in Tehran stock exchange (TSE); and yes, we can open an account for you.
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What documents do I need to open a brokerage account?

For this process you just need a passport, or just send us a photocopy of your passport certified by an Iranian Embassy located in your residing country.
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How much is the minimum deposit?

There is no limitation on maximum or minimum deposit for investing in TSE.
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How can I open a bank account in Iran as a foreign legal entity?

If you are a legal entity, you just need to have registration documents from your country to open a bank account in Iran.
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How can I open a bank account in Iran as a foreign natural person?

If you are a natural person in near future after the opening of SWIFT for Iranian banks, you can open a bank account with your passport in Iran.
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Can I invest in Tehran stock exchange without an Iranian bank account?

Yes, you can transfer the money to the Behgozin bank account, and Behgozin as your broker, will charge your brokerage account.
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Are there any account charges or maintenance fees on Behgozin Brokerage accounts?
No, there are no account charges or maintenance fees on the brokerage account.
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Are there any initial deposits required to open an account in Behgozin Brokerage?
No, no initial deposits are required.
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Can I wire money via the Iranian banking system?

No, at the moment you are only able to transfer money through exchange houses. But in the near future after lifting the sanctions on SWIFT for Iranian banks, you will be able to transfer money directly to your account.
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