How to do Business in Iran

High demand for industrial products, IT services, renewable energies, and electronic goods

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How should international business executives realistically approach Iran? Will the country make good on its promise as the business opportunity of the decade? What are the key ‘dos’ and ‘don’ts’ when approaching the market? These were the major questions being analysed at yesterday’s business workshop, held at the Dialogue of Civilizations Research Institute.

The workshop provided a variety of inside information as to how the Iranian market functions, the demands of the Iranian population, and the kind of goods that can be imported from Iran. At the moment, the Iranian market is particularly looking for international industrial goods, including spare parts for cars, aeroplanes, ships, and heavy machinery, but also products and services in IT, renewable energy, and electronic goods.

Vladimir Korovkin, Senior Researcher at SKOLKOVO IEMS, and a scholar of emerging markets, showed that E-Commerce is booming, with over 24,000 E-shops, representing 2.5% of GDP: “That is a result of a largely young population, where more than 50% are under 30 years of age.” “Before starting a business in Iran, you need to understand Iranian historical and cultural mindsets”, said Christopher de Bellaigue, a scholar of modern Iranian culture and society, arguing that this is essential to knowing how to operate within the economy and how to interact with potential business partners.

There are already numerous success stories from the Iranian market, with construction firms possessing expertise in how to get a foot in the door. “German construction firms have been very quick and have not suffered from a suspicion of Iranian trade. They exemplify best practice in terms of how quickly success can occur in Iran”, said Amir Alizadeh, of the German-Iranian Chamber of Commerce in Tehran.

Mohammad Reza Bakhtiari, Deputy of International Affairs, Tehran Chamber of Commerce and Industries, underlined that Iran is the world’s 18th largest economy and is set for greater growth, so this suggests huge potential for investors.

The event showcased the vast possibilities of doing business in Iran, but there is one point that still makes it difficult to begin, and that is the flow of capital, as hardly any European banks want to operate in Iran due to fear of the consequences. “However, there are still possibilities, as the presence of international companies in Iran shows. Correspondingly, two Iranian banks have subsidiaries in Europe,” stated Zahra Jazayeri, International Affairs Manager at Hekmat Iranian Bank.