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Importation of Foreign Products into Iranian Market

Guiding Principle

Foreign companies, which intend to import and sell their products directly into the Iranian market, need to establish a branch or they may import their products through an Iranian commercial company. For the import of goods into Iran, an import license and commercial card are required. The commercial card is issued by the Iran Chamber of Commerce, Industries and Mines. With regards to the import license, the foreign importer is required to register its order before the Ministry of Industry, Mine and Trade and shall obtain the respective import license.

A. The Initial Requirment for Importing Products into the Iranian Market

Foreign companies, which intend to import and sell their products directly into the Iranian market, need to establish a branch, unless their activities are carried out through an Iranian limited liability company, private joint stock company or any other form of legal vehicle recognized by the Commercial Code of Iran and/or they should mainly import and distribute their products through the local distributors.

According to Art. 1 of  By-law of the Law for Allowing the Registration of a Branch or Representative of Foreign Companies dated 3 May 1999, foreign companies, which are recognized as legal companies in the country where they have been registered, may, on the provision of the reciprocal conduct of their home country, register their branch or representative office for launching activities in Iran, in the following areas:

    • Offering after-sale services for the goods or services of the foreign company.
    • Carrying out the executive operations of the contracts concluded between Iranian persons and foreign companies.
    • Studying and laying grounds for the foreign company’s investment in Iran.
    • Cooperation with Iranian technical and engineering companies for undertaking activities in third countries.
    • Increasing the non-oil exports of the Islamic Republic of Iran.
    • Offering technical and engineering services, and transfer of know-how and technology.
    • Engaging in activities permitted by the governmental agencies legally authorized to issue such permits, in areas such as offering services in transportation, insurance and surveying, banking, marketing, etc.

Furthermore and according to the Decree No. H317T/23974 dated September 30, 1992, concerning Registration of Official Representation of the Foreign Supplier Conducting Sales in Iran, any purchases and procurement of all types of equipment, machinery and services from foreign companies shall be contingent upon existence of registered official representation of the foreign supplier conducting sales in Iran.

It is worth mentioning since 2003, all official representatives of foreign companies or individuals or legal entities are obliged to register their branch or office if they want to supply Iran with foreign goods or services. Without registration, imported goods are declared as smuggled goods and will be dealt with accordingly.

In this respect, Note 19, (r), (9) of the State Budget Act of 1382 (2003-04) provides as follow:

All natural and juristic persons distributing foreign goods and services in Iran are required to offer their products in local market through official representative offices and presentation of after sale services within the framework of the laws and regulations of the Ministry of Industry, Mine and Trade. In case the natural and juristic persons fail to observe such regulations proclaimed by the Ministry of Industry, Mine and Trade, they shall be subject to laws and regulations related to smuggling of goods.

Art. 1 of the By-law on the Manner of Operation of Natural and Juristic Persons Distributing Foreign Goods and Services in Iran, constituting the subject-matter of the above Note 19, declares as follow:

All foreign natural and juristic persons and official representatives of foreign companies wishing to distribute goods and services in Iran are required, whether their operations are carried out in the format of a company or as a guilds unit, to have their branch or representative office distributing their products registered with the Ministry of Industry, Mine and Trade, indicating the particulars of their products and the relevant representation agreement, with due observance of all current laws and regulations of Iran.

Art. 2 of the said by-law provides:

All foreign companies and official representatives of foreign companies constituting the subject-matter of Article 1 of this Circular are required to establish after-sale services centres and authorized service centres, commensurate with the volume and range of distribution of their goods, and to make available a list thereof to the Ministry of Industry, Mine and Trade.

By taking into consideration the above, direct selling and importing foreign products by foreign companies in the Iranian market cannot be done unless the foreign company establish a branch office in Iran or the foreign products are distributed in Iran by a commercial company (e.g. local distributors), established based on the provision of the Commercial Code of Iran. Afterwards, the legal representative of the foreign company, whether in the form of branch office or a commercial company, is required to be registered before the Ministry of Industry, Mine and Trade.

B. The Manner of Importation of Foreign Products

For the import of goods into Iran, an import license and commercial card are required. The commercial card is issued by Iran Chamber of Commerce, Industries and Mines and approved by the Ministry of Industry, Mine and Trade. With regard to the import license, the foreign importer is required to register its order before the Ministry of Industry, Mine and Trade and shall obtain the respective import licence.

Before authorizing the import, the Ministry will examine if the merchandise is on the list of permitted import merchandise. The Iranian import regulations differentiate between:

  1. “Authorized Goods”, which may be imported in accordance with the general regulations (i.e. industry equipment and machines),
  2. “Conditional Goods”, which are subject to special conditions (i.e. cosmetics, food and medicines), and
  3. “Prohibited Goods”, which may not be imported according to Iranian law or which come from Israel.

The government can exclude products classed as “not necessary” (because they are sufficiently available from in-house production) from importing altogether. Goods produced in the country are not issued an import permit. If the national demand exceeds the local production, an import permit may be issued as an exception at the request of the importer. The following documents are required for registration of a product order:

      • Valid Commercial Card;
      • Membership Card of Ministry of Industry, Mine and Trade;
      • The completed Product Order Form;
      • The original copy of Performa;
      • Catalogue and booklet and material analysis for some specific products.

In case the products are ordered and/or purchased by the governmental bodies, the following documents are required:

      • The written approval of the respective governmental body;
      • The written request of the governmental body;
      • The copy of the purchase contract;
      • Invoice;
      • The copy of B/L (Bill of Lading) and warehouse receipt.

After registration of the product order before the Ministry of Industry, Mine and Trade, a L/C (Letter of Credit) should be opened. After that, the products will be forwarded by courier to Iran and upon their arrival to the Customs, the procedures for customs clearance should be followed.

The following documents are required for clearance of the products from the Customs:

      • The Product Order Form;
      • Completing the Customs Declaration;
      • Shipping Documents (Invoice, B/L, Packing List, Certificate of Origin, Certificate of Inspection);
      • Commercial Card;
      • Warehouse Receipt;
      • Clearance Certificate (This certificate is issued by the courier or forwarder showing there is no outstanding payment between the product owner and the courier.);
      • L/C.
January, 2012 Zahra Tahsili
  Meyer-Reumann & Partners, Dubai Office
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