Article 1
In order to accelerate the implementation of infrastructural and development projects, to enhance economic growth and progress, to raise the level of investment and public income, to create sound and productive employment, to regulate the labour and products market, to actively participate in regional and international markets, to produce and to export industrial and processed goods and to provide public services, the government is hereby authorized to administer as free trade and industrial zones, the following areas in accordance with established law and the present law:
(a) Kish Island Free Zone, as delineated in the map attached hereto.
(b) Qeshm Free Zone, a contiguous area not exceeding three hundred square Kilometres situated at northeastern part of the Island whose boundaries shall be determined by the Council of Ministers.
(c) Chabahar Free Zone (according to the map attached hereto)
Note 1 : Free Zones shall benefit from the facilities and privileges provided by this law.
Note 2 : The establishment of new Zones and the delineation of their boundaries shall be subject to the proposal by the government and ratification by the Islamic Consultative Assembly.

Article 2
The revenues of the Administrative Authorities of Free Zones should be spent solely within the framework of the annual budgets as approved by the Council of Ministers. Assistance to be granted by the Administrative Authorities for the reconstruction and development of other areas (with the priority to be granted to adjacent areas) shall be provided solely upon approval by the Council of Ministers; any other assistance shall be considered unlawful use of public property.

Article 3
In this law, the following terms are used in lieu of the following phrases:
Country: The nation of the Islamic Republic of Iran .
Zone: Free Trade - Industrial Zone.
Authority: Authority responsible for the administration of each Free Trade-Industrial Zone.
Majlis: The Islamic Consultative Assembly

Article 4
The Council of Ministers is responsible for:
(a) approval of regulations and coordination of all Activities of each Zone
(b) approval of the charter of the authority and companies affiliated thereto .
(c) approval of the annual development, cultural programmes and budgets, and projected financial operations of the Zone Authorities.
(d) upon confirmation by the supreme commander of the Armed Forces, approval of the security and law enforcement regulations of the Zones.
(e) overall supervision of the activities in the Zones.

Article 5
Each Zone shall be administered by an Authority organized as a company, with autonomous legal status, whose capital shall belong to the government. Such companies and their affiliates and subsidiaries shall be exempt from the laws an regulations governing state - owned companies and from other general regulations decreed by the government; they shall be administered solely on the basis of the present law and its respective by-laws, with respect to cases not provided in this law and charter, these companies shall be subject to the Commercial Code.

Article 6
The Authority shall be administered by a Board of Directors, consisting of three or five persons. Members of the board of directors shall be appointed by the council of ministers. The managing director who shall be the ex officio chairman of the Board, shall be appointed by Presidential decree from amongst the Members of the Board of Directors and shall be the highest executive authority in the affairs of economy and infrastructure in the Zone. The Managing Director and the Members of the Board of Directors shall be appointed for a tenure of three years and their reappointment is permissible. Dismissal from the office of the Managing Director and the Board Members
rests with the same appointing authorities. The responsibility for and the power of general meetings of each Zone Authority is vested with the Council of Ministers.

Article 7
Upon approval by the Council of Ministers, the Authority of each Zone is empowered to set up, as deemed necessary, companies which shall be established in accordance with the provisions of Commercial Code.

Article 8
The Authority and its affiliated companies are permitted to conclude the necessary contracts with natural or legal persons, whether foreign or domestic, and to participate with domestic or foreign investors for the implementation of development and productive projects, with the observance of the stipulations of the Constitution . Disputes and claims arising out of the concluded contracts, shall be examined and settled in accordance with the mutual agreements and the contractual commitments of both parties concerned.

Article 9
Ministries, organizations, institutions and companies owned by or affiliated to the government, may enter into contracts with the Authority or its affiliate companies for the purpose of providing facilities or services in each Zone, within the stipulations of the Council of Ministers decrees. The terms and conditions of such contracts should be drawn up in a manner that could safeguard the competitive position of the respective authority as against the Free Zones of other countries.

Article 10
Upon approval by the Council of Ministers, the Authority of each Zone is empowered to collect charges from natural or legal persons residing in the Zone in return for provision of municipal services and communications, health, cultural, educational and welfare facilities.

Article 11
Issuance of permits for any kind of permitted economic activity, construction of buildings and installations and embarking on various occupations which do not fall under a direct responsible head person, by natural or legal person, within the boundaries of the Zone, rests solely with the Authority.

Article 12
Regulations governing the employment of manpower, social insurance and security and the issuance of entry visa to foreign national, shall be based on rules which are to be approved by the Council of Ministers.

Article 13
Natural and legal persons engaged in any kind of economic activity in a Zone are exempt from payment of invoice and property tax as from the date of the commencement of the operation mentioned in the permit with respect to any type of economic activity in Free Zone, and after the lapse of fifteen years shall be subject to the tax regulations to be enacted by the Majlis, upon proposal by the Council of Ministers.

Article 14
Exchange of goods between the Zones and outside the country is excluded from the provisions of the Export - Import Regulations after being registered at the customs office. Regulations governing the export and import of goods and customs formalities with each Zone shall be approved by the Council of Ministers . Exchange of goods between the Zones and the rest of the country, whether of commercial nature or by travelers is governed by the general Export - Import Regulations of the country.

Article 15
Importation of goods produced in a Free Zone to other parts of the country is exempt from payment of all or a part of customs duties and commercial benefit tax up to the added value thereof in the Zone, upon approval by the Council of Ministers.

Article 16
Importation of goods produced in a Zone all or parts of whose raw materials are wholly or partly supplied domestically is exempt from all or a part (proportionally) of the customs duties and commercial benefit tax relating to the respective domestic raw materials.

Article 17
Goods transported from the rest of the country for use and consumption in a Zone shall be constituted as domestic movement of goods, but their exportation from a Zone to the outside world shall be governed by general Export - Import Regulations.

Article 18
Rules and Regulations on monetary and banking operations and transactions conducted in the Zones shall be drawn up by Central Bank of Islamic Republic of Iran within three months after the ratification of this law, with the aim of safeguarding the competitiveness of a Zone vis-a-vis free Zones of other countries, and shall be approved by the Council of Ministers.
Note 1: The Free Zone's Foreign exchange system and equivalency of Iranian Rial against the foreign exchanges will be determined with regards to the article 6 of the " Law Concerning Execution of Governmental Punishment " Pertaining to the " Goods and Foreign Exchange Smuggling Law".
Note 2 : Establishment of the Iranian bank with minimum of 51% government shares, setting up of any foreign bank branch, establishment of non-banking credit institutions whether Iranian or Foreigner or setting up of their branches in the Free Zones, shall be effected upon suggestion of the Zone Authority and Central Bank for approval by the Board of Ministers.
Note 3: The branches of foreign banks located in the Free Zones, and those group of the Iranian banks authorized by the Central Bank of Islamic Republic of Iran to have activities in the Free Zones can perform offshore banking activities in accordance with the Islamic banking principles and criteria decreed by the Board of Ministers.

Article 19
Upon approval by the Council of Ministers, the Authority is empowered, within the framework of its approved plan and budget, to obtain and guarantee credits from domestic and foreign sources for the purpose of implementing of infrastructural and productive projects. Repayment of these credits shall take place only through drawing on revenues of the Zone concerned.

Article 20
Inflow and outflow of capital and expatriation of profits generated by economic activities in each Zone are permitted. The required regulation for attraction and protection of investment in each Zone and the modality and participation of foreigners in activities in each Zone shall be approved by the Council of Ministers.

Article 21
Upon approval by the Council of Ministers, the Authority of each Zone is empowered to guarantee foreign investments against losses from expropriation and nationalization, up to the ceiling of the commitments contained in the respective contracts, by utilizing its own assets or through contracts concluded with the bank, credit institutions and insurance companies.

Article 22
In compliance with Article 81 of the constitution and rules approved by the Council of Ministers, the registration of companies and industrial and intellectual property, as well as the registration of ships, vessels and aircrafts in each Zone, can be effected.

Article 23
The Authority is entitled to open representative offices wherever deemed necessary.

Article 24
Utilization of land and national resources belonging to the government within each Zone and the sale or lease thereof to Iranian nationals shall be determined by regulations as approved by the Council of Ministers and within the development plans of each Zone. The Authority of each Zone shall be responsible for the enforcement of relevant regulations .
Note 1: Renting of land to foreign nationals is permitted but its sale thereto is strictly forbidden.
Note 2 : Iranians residing in the islands subject of Free Zones shall enjoy the same rights
of ownership of the land and improvements thereto as the rest of the country. The registry of Deeds and properties Organization is obliged to issue title deeds to individuals in accordance with laws and regulations.

Article 25
The president and directors of each Zone Authority, managing directors and board members of affiliated companies, all the ministers and the heads of government organizations, heads of the judiciary power, the Supreme Court and Administrative Justice Tribunal, the public prosecutor, the chief of state inspectorate, their respective deputies and advisors, Members of the Majles, governor - generals, mayors and their deputies and their respective first degree relatives are not authorized to hold shares in companies established by a Zone Authority as well as in private companies operating in the Zones.

Article 26
The by-laws for implementation of this Law shall be approved by the Council of Ministers.

Article 27
In order to coordinate the activities of the Free Zones, and as the case may be, and with the approval of the competent minister, one of the following two procedures may be adopted:
a) The executive organization (affiliated to the executive branch) may transfer their authority to the Chairman and Managing Director of the Free Zone Organization.
b) Officers of the executive organization functioning in various capacities in the Zones shall be appointed by the proposal of the Chairman and Managing Director and the approval of the competent authority in the executive organization.

In these Regulations, the following words are used in the place of the corresponding full terms:
Mainland: the Islamic Republic of Iran, excluding the Free Trade and Industrial Zones
Authority: the Authority of each Free Trade and Industrial Zone of the Islamic Republic of Iran
Zone: each Free Trade and Industrial Zone of the Islamic Republic of Iran.
Investment: the utilization of capital in different forms in any economic activity for the
purpose of manufacturing goods and providing services.
Foreign Capital: All the types of capital mentioned in Article 3 of these Regulations (save Rial amounts) imported into the Zones by foreign investors.
Foreign Currency Capital: the capital mentioned in Article 3 of these Regulations (save Rial amounts) that is imported into the Zones from outside the Mainland by Iranian nationals
Net profits: the excess of realized income earned by an entity over expenses incurred in a financial period resulting from profit-making activities, identified and measured in accordance with generally accepted accounting principles

Article 2
All natural and legal persons and institutions, both Iranian and foreign, as well as international organizations, may either separately or jointly with the Authority and affiliates thereof or jointly with each other invest in the Free Zones in accordance with these Regulations; their accepted capital shall be subject to these Regulations.

Article 3
For the purposes of these Regulations, capital shall comprise:
(a) Rial amounts and foreign currency amounts convertible in the Zones (each Zone);
(b) machinery, equipment, parts and tools;
(c) industrial property rights including patents, technical know-how, trademarks and names;
(d) land, air and sea - going vehicles relating to the Investment;
(e) all or part of transferable net profits generated in the Free Zones and added to the initial capital or utilized in another authorized activity governed by these Regulations.
Note: In special cases, raw materials and semi-finished parts may, at the discretion of
the Authority, be accepted as a part of foreign capital.

Article 4
Capital shall be accepted and made subject to these Regulations under the following conditions:
(a) it is utilized in activities authorized by a Zone;
(b) it has completed the entire procedure for the grant of the investment permit mentioned in Articles 6 and 7;
(c) it does not involve the grant by the Authority to the investor of a concession or monopoly rights.

Article 5
Foreign investors may participate in the economic activities of the Zone up to any ratio (of the amount of investment).

Article 6
The investors mentioned in Article 2 of these Regulations that wish to import their capital in any of the Zone must submit to the Zone Authority their application together with a questionnaire (prepared by the Secretariat and the Zone Authorities and placed at said investors disposal). Applications received in a Zone shall be examined by the Zone Authority and an investment permit issued by the Authority of that Zone.
Note 1: Alterations to the contents of the questionnaire and the investment permit may
only be made with the knowledge and, where necessary, approval of the Zone Authority.

Article 7
Within the period specified in the investment permit, the holder of an investment permit must import into the Zone a set percentage of the capital in order to commence implementation of the activities mentioned in the investment permit.

Article 8
The importation and registration of capital in Free Zones shall be undertaken in the following manner:
(1) The capital mentioned in Article 3 (a) of these Regulations shall be deposited in the bank (or authorized credit institution) account of the entity in which the investment is to be made and"after computation of the Rial or foreign currency countervalue, as the case may be, at date of the deposit and in accordance with the certificate of the bank (or the authorized credit institution), registered as the capital of the investor in the register of the Zone Authority.
(2) The capital mentioned in Article 3 (b) and (d) of these Regulations and as specified in the investment permit and evaluated as per their CIF value evidenced by documents and relevant invoices shall, after review by the Zone Authority, be converted in total at date of customs clearance into a convertible foreign currency; the foreign exchange value thereof and, concurrently, its Rials equivalent (at the current rate of exchange posted in the Zone) shall be registered as of that date as the capital of the investor in the register of the Zone Authority.
(3) The capital mentioned in Article 3 (c) of these Regulations shall, after its evaluation has been confirmed by the Zone Authority, be registered as capital in the register of the Authority.
Allocation of the value of the technical know-how to the capital account shall be concurrent with the transfer of said technical know-how.
(4) the capital mentioned in Article 3 (e) of these Regulations shall, after confirmation by an auditing firm acceptable to the Zone Authority, be registered as capital in the register of the Zone Authority in the following manner:
(a) after obtaining the approval of the Authority, with the aim of increasing the capital to expand investment in the same entity;
(b) after obtaining the approval of the Authority, with the aim to expand investment in activities other than activities for which permission has been granted.
(c) after following the procedure set forth in Article 6 of these Regulations, if the aim is to invest in activities other than the activity for which the investment permit was issued.
(5) Whenever all or part of imported capital in kind is deemed in the judgement of the Authority as defective, damaged or useless, or do not conform with the specifications declared in the application, or whose declared value exceeds its real value, such portions of its price are not confirmed by the Authority shall be carried into the capital account.
(6) In cases where capital goods mentioned in Article 3 (b) and (d) of these Regulations belonging to foreign investors were previously used on the Mainland and transferred to the Zones with the authorization of relevant Mainland authorities, the transfer of such goods shall be deemed as a transfer of domestic capital and shall be subject to the provisions of these Regulations.

Article 9
Investors may insure the capital they import into the Zones. If, pursuant to the occurrence of a contingency, an insurance company becomes the subrogate of the investor in accordance with the insurance policy, such subrogation by virtue of payment of
compensation to the insures shall be recognized; however, it shall not be deemed as an assignment of capital.

Article 10
The legal rights of foreign investors are guaranteed and protected. Equitable compensation for damages shall be paid by the Authority in cases where the capital of foreign investors is nationalized by law in the public interest and/or said investors property is taken. In such cases, investors must within a period of six months from date of the expropriation file with the Authority a request for compensation for damages incurred. The Authority shall evaluate at current prices the amount of damages incurred and within a period of three months pay compensation thereof. The Zone Authority may undertake the aforementioned guarantees through contractual arrangements with the Central Bank and other banks, credit institutions and insurance companies.
Note: In case the investors subject to this article are inclined that the guarantee mentioned in the Law on Attraction and Protection of Foreign Investments (approved in 1334), to be fulfilled, their proposal of investment has to be submitted to the body subject to the Article (2) of above - mentioned law. Issuance of guarantee shall be allowed in compliance with the procedures and formalities defined in that Law.

Article 11
Each year all entities set up in a Zone pursuant to investment permits must communicate to the Authority a report on their operations and their financial accounts; the financial accounts must be confirmed by an auditing firm acceptable to the Authority.

Article 12
Repatriation from the Zones of net profits, the initial capital and gains resulting from economic activities undertaken with Foreign Capital and Foreign Currency Capital as well as the proceeds of the sale or transfer of these types of capital is permitted. Upon the request of such investors, and after verification that the amounts for which repatriation from a Zone is requested result from utilization of the investors registered capital in the activity specified in the investment permit, and after ensuring that the circumstances set forth in the following Note have been taken into account, the Zone Authority shall issue the necessary authorizations within one week from date of receipt of said request.
Note: In its review, the Zone Authority must take into account whether the investor may benefit from the tax exemptions mentioned in Article I3 of the Law on the Administration of the Free Zones and whether the amounts for which repatriation is requested are net amounts.

Article 13
Payments of installments of the principal of loans and related expenses, as well as payments pursuant to patent, technical know-how, technical assistance and engineering, trademark, management and similar contracts are authorized if the Authority is informed and if they are made within the framework of investment projects based on relevant contracts and financial statements.

Article 14
Investors may transfer their shares of stock to other investors with the authorization of the Zone Authority. In such case, the transferee shall be deemed in every respect the successor of the original investor.

Article 15
The transfer of capital from one Zone to another Zone shall be subject to the investment regulations of the Zones from which the capital departs and in which it enters.

Article 16
Disputes between foreign investors and Iranian parties shall be settled in accordance with contracts and written agreements.

Article 1
In these Regulations, the following terms are used in lieu of the relevant phrases:
Regulations: Regulations on Monetary and Banking Operations in the Free Trade- Industrial Zones of the Islamic Republic of Iran.
Authority: The organization of each of the Free Trade-Industrial Zones of the Islamic Republic of Iran.
Zone: Each of the Free Trade-Industrial Zones of the Islamic Republic of Iran.
Bank Markazi: Central Bank of the Islamic Republic of Iran.
Bank: Bank and branches which are authorized to operate in a Zone.
Branch: A bank branch in a Zone that is a unit of an Iranian or foreign bank (the parent bank) which engages in authorized banking activities in accordance with the parent bank's charter and within the framework of the Zone' s laws and regulations.
Institution: A non-bank credit institution which is established and operates in a Zone in accordance with the provisions of these Regulations.
Offshore Banking: Conducting various banking operations solely in foreign currencies.
High Council: The high council of the Free Trade-Industrial Zones of the Islamic Republic of Iran .

Article 2
The use of the words -bank- and -institution- in a Zone is authorized solely in compliance with the provisions of these Regulations.
Note: Banks that obtain authorization for offshore banking activities are required to affix the term - offshore - to the name of their bank.

Article 3
The establishment of an Iranian bank and institution and the opening of bank and institution branches, whether Iranian or foreign, is conditional upon approval by Bank Markazi, with the proposal by the Authority and ratification of the majority of the member of the High Council of Free Zones.
Note 1: Banks that intend to engage in offshore banking operations are required to obtain special authorization for above-mentioned activities from Bank Markazi, upon proposal by the Authority.
Note 2: The establishment of foreign exchange dealership is possible upon the permission
of the Authority.

Article 4
The articles of association of the banks and institutions and any modification thereto must be approved by the majority of the members of the High Council of Free Zones after suggestion of the Authority and confirmation of Bank Markazi.

Article 5
The registration of banks and institutions in a Zone is contingent upon issuance of the permit subject of Article (3) of these Regulations. The registration office in a Zone is required to demand the said permit prior to the registration of banks and institutions.

Article 6
The branches of the mainland banks which are established in a Zone before the ratification of these Regulations, shall be managed, as before, in accordance with the regulations and rules of their parent bank.

Article 7
A bank may be established only as a public joint stock company with registered shares and an institution only as a public or private joint stock company with registered shares, in accordance with the provisions set forth in the law approved in 1347 (1968), amending part of the Commercial Code, in the following manner:
(a) Banks whose capital belong to the Iranian banks or government organizations for a ratio exceeding fifty one percent (51%).
(b) Institutions whose capital belong to Iranian or foreign natural or legal persons.

Article 8
The minimum capital, whether contribution or working capital, of Zone banks and institutions mentioned in Article (7) of these Regulations are determined as follows:
A. Iranian banks: At least 15 billion Rials (15,000,000,000), all of which should be deposited in cash with Bank Markazi .
B. Iranian institutions: At least 5 billion Rials (5,000,000,000), all of which should be deposited in cash with Bank Markazi.
C. Foreign bank branches: At least 5 million (5,000,000) dollars all of which shall be deposited with Bank Markazi.
D. Foreign institutions: At least five million (5,000,000) dollars, all of which should be deposited with Bank Markazi .

Article 9
Establishment of branches, sub-branches and representative offices by the banks and institutions set up in a Zone is permitted, upon proposal by the Authority and authorization by Bank Markazi.