Forum guides foreign firms into Iran’s ‘tricky’ market
Tehran, Iran, Sept. 26
By Mehdi Sepahvand – Trend:
A forum has gathered international businesses as well as consultation and law firms to introduce business opportunities in Iran’s new and developing market to foreign investors.
Organized by International Finance and Open Iran, the two-day Focus Iran tries to show the unknown aspects of Iran’s business market to the attendees, Trend correspondent reported from the event September 26.
“The Iranian market is somehow tricky and does not work like, say, Turkey or Dubai,” Salman Nasr, senior international relations and business development expert at IMIDRO (Iranian Mines and Mining Industries Development and Renovation Organization), told the audience.
“You can’t just contact some people or find a partner and expect everything to run by itself. You have to come here, hold many long meetings, know the atmosphere, and even get your hands dirty.”
The conference comes nine months after Iran was released from international sanctions and saw a flood of foreign companies rushing to the country hoping to finance in the lucrative market. However, Iran has been kept unknown to foreigners during the one decade that it was under sanctions.
“You need to hold a lot of meetings with different people here. The ownership of companies is not that straightforward in Iran. So you meet with a circle of managers who won’t make the final decisions. There are layers and layers of decision makers which usually, even for the private companies, end up in the hands of the state,” Santiago Castillo, the Middle East principal at Roland Berger, said.
However, he noted, Iran is a developed country in many ways. Iran has been rightly described as a “pool of young, brilliant, and trained manpower”, he said.
Iran also enjoys vast energy resources and the cost of energy in the country is very low; there are seven free trade and industrial zones as well as 30 special economic zones in Iran, Castillo underlined.
Ferial Mostofi, chairman of the KDD Group, said the market capital of all listed companies in Tehran Stock Exchange (TSE) is about $83 billion and that there are more than 530 companies in 37 industries listed in the TSE.
Iran’s GDP was $215 billion in 2014, its GDP per capita was then $5,500, she underlined.
During the forum it was also suggested that the country is suffering from a number of problems that discourage business, including lack of investment in infrastructure, inflation, high inflation rate, price control and subsidies, low ease of doing business rate (118th country in the world), bureaucratic delays, lack of reliable market data, and some remaining sanctions.