The Export Guarantee Fund of Iran (EGFI) said it is ready to issue guarantees for foreign investment in Iran’s free trade zones.
Amir Borhani, the EGFI head, said that the fund is ready to cover investment packages prepared for foreign firms wanting to invest in Iranian FTZs, the Free Trade Zones News Agency said.
Hojjatollah Abdolmaleki, the secretary of the Supreme Council of Free and Special Economic Zones said that the government has prepared 700 investment packages worth over $7 billion for domestic and foreign investors in the free areas.
“By adding insurance as an option in the packages, it will become more attractive to investors and underpin their confidence," he said.
Abdolmaleki added that an agreement will be signed soon between the council and the EGFI on the ways and meands to cover the investments.
In Iran, free trade zones were initially authorized in 1993 in Kish, Qeshm and Chabahar. Later, Aras, Arvand, Maku and Anzali were added to the list.
The Expediency Council, a powerful body that resolves disputes between parliament and the Guardians Council, approved last year the establishment of seven new free trade-industrial zones and 13 special economic zones.
The Guardians Council is an oversight body that ensures laws are in line with the Constitution and Sharia.
The seven new FTZs include Mehran in the western province of Ilam, Sistan in the southeastern Sistan-Baluchestan Province, Baneh-Marivan in 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.
Members of the council also gave the green light to the creation of 13 special economic zones, namely Lar and Fasa in Fars Province, Abarkouh and Meybod in Yazd Province, Zanjan in Zanjan Province, Gachsaran in Kohgilouyeh-Boyerahmad Province, Serow in West Azarbaijan Province, Khaf and Qouchan in Khorasan Razavi Province, Khorramabad in Lorestan Province, Takestan in Qazvin Province, Shahin Shahr in Isfahan Province and Savojbolagh in Alborz Province,
According to the Economic Studies Department of Tehran Chamber of Commerce, foreign investments in Iran dropped from 2012 when it stood at $4.5 billion. Over 20 years to 2021 it reached its lowest level in 2015-16 at $945 million.
Following the signing of Joint Comprehensive Plan of Action (JCPOA) in 2015-16 Iranian year, foreign investment grew in 2016-17. However, after that due to US policies and talk of the country's withdrawal from the JCPOA, the volume began to decline again and after Donald Trump unilaterally withdrew from the historic nuclear deal in 2018, it decreased sharply in 2019 to reach $1 billion.
In fiscal 2020-21, the volume stood at $1.4 billion – up 39% on 2019-20.
Most foreign investments in Iran has been in the form of direct investment, the report noted, adding that investment in securities and stocks account for a small share of foreign investment.
In 2020-21, foreign investment in securities and stocks stood at $165 million, 69% higher on 2019-20 and accounted for about 12% of the total foreign investment.
According to the United Nations Conference on Trade and Development, Iran attracted an estimated $1.425 billion in FDI in 2021 to register about a 6% rise compared to $1.342 billion in 2020.
UNCTAD put the volume of FDI inflows to Iran at $3.372 billion, $5.019 billion, $2.373 billion and $1.508 billion from 2016 to 2019.
Ever since the government of President Ebrahim Raisi took office in August 2021, Russia has made the biggest investment in Iran, according to deputy economy minister, Ali Fekri.
Putting the total overseas investment at $5.95 billion during the period, the official, who doubles as the head of the state-run Organization for Investment and Economic and Technical Assistance of Iran, said: “Russians account for $2.7 billion. They’ve invested in two oil projects,” ILNA reported.
After Russia are the UAE, Turkey and China. No details are available on the multi-million-dollar projects.
The Central Securities Depository of Iran (CSDI), the capital market clearing house, said 4,374 trading codes have been issued for foreign investors, and 27 codes were issued in March. Total investment by foreigners reached close to 67.63 trillion rials ($127.2 million) – up 83% last year.
