Business entities in Iran

Business entities in Iran

Iran requirements to setup new businessForeign entrepreneurs incorporating in Iran commonly prefer the Private Joint Stock Company. However, there will be other business entities available to our Clients namely, the LLC, the Public Joint Stock Company, the Branch office and the Representative office. Healy Consultants will assist our Clients with choosing the optimum Iran business setup to suit their needs.

Private joint stock company (Sherkat Sahami Khass)

  • This business entity is most commonly used by foreign entrepreneurs intending to set up business in Iran. For successful registration, at least 2 directors and 3 shareholders must be appointed, who can be of any nationality. Also, the minimum paid up share capital required will be only €40;
  • While our Clients will be required to submit financial statements to the Government annually, they will be exempted from getting an audit if i) their annual revenue is lower than €1m or ii) total assets are lower than €2m.

Limited liability company (Sherkat ba Masouliyat Mahdoud)

  • An Iran LLC can be setup with 2 shareholders and 1 director of any nationality. Furthermore, the minimum paid up share capital required will be only €1. This business entity is mostly incorporated for the purpose of opening trading companies.

Public joint stock company (Sherkat Sahami Am)

  • This Iran business setup will be recommended if our Client wishes to raise public capital. For successful registration, at least 2 directors and 5 shareholders of any nationality will be required. Furthermore, minimum initial capital required will be €200;
  • Every public company will issue at least 20% of its shares to the general public. Also, it will be mandatory to list the company on the national stock exchange. A public company must submit audited financial statements to the Government annually.

Branch Office

In accordance with the Iranian law, the branch office can be established without the need for Iranian participation. The branch is simply an Iranian-registered extension of the company setting up the branch, and thus the shareholders and directors are the same and do not require re-appointment. However, a resident legal representative must be appointed in Iran to accept service of legal proceedings and other official communications.

Although a branch office can only pursue business activities within the scope defined by the parent company, it will still be allowed to invoice local customers, sign local sales contracts and receive income from customers.

Table of comparison between different Iran entities

Summary at a GlancePrivate Joint Stock CompanyLLCPublic Joint Stock CompanyBranch
Also known as:Sherkat Sahami KhassSherkat ba Masouliyat MahdoudSherkat Sahami AmN/A
How long to set the company up?15 weeks8 weeks20 weeks18 weeks
How long to open company bank account?4 weeks5 weeks4 weeks4 weeks
Issued share capital required€40€1€200€0
Is doing business in Iran permitted?YesYesYesYes
Allowed to sign sales contracts with Iranian Clients?YesYesYesYes
Allowed to invoice Iranian Clients?YesYesYesYes
Corporate tax payable in Iran25%25%25%25%
Corporate bank accountBank Melli IranBank SepahBank Saderat IranBank Sepah
Can rent office in Iran?YesYesYesYes
Tenancy agreement required before incorporation?NoNoNoNo
Allowed to import raw materials?YesYesYesYes
Allowed to export goods?YesYesYesYes
Can the entity hire expatriate staff in Iran?YesYesYesYes
Do you visit Iran for company incorporation?NoNoNoNo
Resident director required?NoNoNoNo
Resident shareholder required?NoNoNoNo
Minimum number of directors2120
Minimum number of shareholders3250
Iran resident company representative required?NoNoNoYes
Individual shareholders allowed?YesYesYesNo
Corporate shareholders allowed?YesYesYesYes
Corporate director(s) allowed?NoNoNoNo
Public register of shareholders and directorsYesYesYesYes
Statutory audit required?YesYesYesYes
Annual tax return to be submitted?YesYesYesYes
Total business setup costs in Year 1€13,400€13,840€21,740€14,870
Subsequent annual costs (incl. accounting & tax)€4,250€4,400€4,250€4,400
Draft invoiceIran private JSCIran LLC setup costIran public JSCIran branch

Contact us

For additional information on our business setup services in Iran, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Ms. Olivia Stanciu, directly:
client relationship officer - Olivia