Qeshm Free Trade Zone (QFTZ) is in talks with two groups of investors wanting to establish offshore banks, the caretaker of the zone said.
"Iranian expats have shown interest in starting offshore financial institutions...they have similar institutions in other countries. There are rules and restrictions for offshore banking which need to be reviewed by the Central Bank of Iran," Afshar Fathollahi was quoted as saying by ILNA.
Fathollahi said getting government approval is the most challenging part of the process.
"Talks are underway with the government and the CBI for revising the needs for starting banks in the free zones," he said without providing details or names of the interested parties.
Qeshm Island, located in Strait of Hormuz in the Persian Gulf, is the largest free trade zone in Iran and is expected to emerge as a regional trading hub after the US sanctions are lifted.
Saeed Mohammad, secretary of the High Council of Free Zones, earlier announced plans to ease investments into offshore banks.
Back in 2016, the Money and Credit Council – the highest decision-making body for financial markets in Iran – raised the minimum capital requirement for banks in free trade zones from €25 million to €150 million, to apparently ensure capital cushions for lenders against possible risks, enhance their operations and growth.
The council has restricted permits to conduct international banking operations only to banks and their subsidiaries.
As per law, foreigners can own up to 40% of bank shares in the mainland while in the free zones they can open banks with 100% equity.
The government is also offering tax exemptions and easier visa regulations in the special economic and trade zones to facilitate business activities by foreign companies.
Offshore lenders should meet FTZ goals in attracting foreign investment rather than becoming a conduit for capital flight.
In the past investors from China and Russia had announced interest in starting banks on the island.
FTZs were first authorized in 1993 on Kish Island, Qeshm Island and Chabahar Port. Later, Aras, Arvand, Maku and Anzali were added to the list. Lawmakers last year approved a bill for opening seven FTZs namely, Mehran in the western province of Ilam, Sistan in southeastern Sistan-Baluchestan Province, Baneh-Marivan in the northwestern Kurdestan Province, Bushehr in southern Bushehr Province, Qasr-e- Shirin in western Kermanshah Province, Ardabil in northwestern Ardabil Province and Incheh Borun in northeastern Golestan Province.
