Economy, Business And Markets

Could Tehran Attract Wealthy Foreign Investors?

Could Tehran Attract Wealthy Foreign Investors?Could Tehran Attract Wealthy Foreign Investors?

Tehran has not been on the international weekend vacation market in the past few decades, and it certainly wouldn’t be considered one of the cities where wealthy foreigners move to avoid overzealous tax inspectors, but could this mega-city of over 12 million people become another Singapore, New York or Dubai?  

Many countries around the world, including the United Kingdom, the United Arab Emirates and Portugal offer different investment schemes.

Bloomberg news reported the cost of buying your way into the United Kingdom or just London is roughly $3 million currently. There are other less expensive schemes but this is the fastest on offer currently.  

The American commercial news agency reported that in the first nine months of 2014, 160 Russians opted for the British passport as way to save the remainder of their millions. The rest came from Chinese, the report said.

But let’s for the sake of this article put Iran’s economic situation aside for one second and think about a time post-sanctions, when the economy has settled and foreigners want to come and invest their money in the talent pool of millions of educated Iranians – yes it is a very real idea which shouldn’t be thrown off by the wayside.

President Hassan Rouhani’s success on a number of topics, including reigning in the runaway inflation along with mending relations with the West is beginning to change foreigners’ perception of Iran. Other developments are changing investors’ opinions of the Iranian market.

The upcoming World’s Fair in Milan, Italy is likely to add to the “Rouhani Affect” with foreigners visiting the fair. In fact the Rouhani administration has made a special effort to reboot Brand Iran with the vacationing public. Visiting tourist numbers also point to this trend that Iran is finally being taken as a seriously cultural holiday destination.

There are many problems that remain for foreigners to begin to take Tehran as a serious place to invest in and even to live, and the period over the next 5 years is integral to the country’s development.

Recent developments around the capital city are also adding to this positive outlook. All around Tehran new malls and complexes of international quality are being built, radically transforming the retail experience on offer to locals. The pinnacle of these developments would be the Palladium Shopping Mall in the north of Tehran.  

The cost of living in Tehran by international standards is still cheap. Apart from rent which can match and even exceed some cities like London and New York, Tehran has the potential in terms of mod-cons and architecture to please even the most veracious of design enthusiasts.

Household food items consistently match Europe’s in terms of quality and packaging. One investor recently said that he was surprised to see Sunich branded fruit juices for sale in Japan – if this says anything it suggests Iranian brands have a cult following around the globe.

Problems still remain however for Iran to position itself as a millionaire’s destination. The government needs to work with the private sector to promote the country more. Groups like the Organization for Investment, Economic and Technical Assistance of Iran, Iran Invest or OIETAI have worked tirelessly in recent years to bring about actually foreign investment into the country.

The organization’s head Mohammad Khazaei recently took over the role of the organization after doing a stint in the United Nations. They state that issuance and renewals of work permits for foreign nationals costs $130 per annum, with extensions to the original one costing $95. It does note that expatriates of some countries would be exempt from these fees.

The OIETAI also offers a number of centers around the country to aid investment in Iran, it states on its website.

“The center is intended to provide an efficient organization for streamlining and expediting the affairs related to foreign investment undertakings in Iran. For this purpose, fully authorized liaison representatives from relevant executive agencies… have been stationed at the center. “

Up until this year, the number of people wishing to invest in the country was restricted to a few countries. Iran was still on good terms with politically, but with the prospect of this potential shift in relations with a number of countries, investment in Iran needs to be taking more seriously by global institutions.