Economy, Business And Markets

Return on Investment Outweighs Risks

Return on Investment Outweighs RisksReturn on Investment Outweighs Risks

The potential return on investment in Iran outweighs the risks, said the head of Iran Chamber of Commerce, Industries, Mines and Agriculture's Iranian-Foreigners Investment Association on Thursday.

Iran is opening its doors to foreign investors after more than a decade of stringent restrictions as a result of economic sanctions imposed by the West over the country's nuclear energy program. Now, amid the prospect of the imminent lifting of sanctions as part of the landmark nuclear deal reached between Iran and world powers in Vienna in July, the government is warming up to the idea of foreign investments and private businesses.

"Iran has all the raw materials needed for industry. It has a young educated workforce and there are good laws in place to support foreign investors," Seyyed Hassan Salimi told Shata news agency.

Foreign observers have called Iran the last frontier market, as investors are mulling over tapping the potential of a country that could easily become the Middle East's industrial powerhouse.

The world's largest natural gas reserves and the fourth largest crude oil reserves are among the many unique advantages of investment in Iran, which considerably lower energy costs for manufacturing.

With all of this attraction, however, there are challenges to overcome.

"Investors want security for their investments and stability in the host country," Salimi said.

Visits by foreign delegations are helping establish Iran's reputation as a stable place for investment and shaking off the negative portrayals of Iran in the western media.

"What we have to pay attention to is having stability in our laws and decision-making. Sadly, economic conditions and the government's policy-making have been volatile in the past few years. This instability in government policies has made some foreigners skeptical about investing here."

However, the government is gradually changing foreign investment laws. Foreign investment regulations stipulate that no assets held by foreigners can be nationalized or confiscated permanently by the government.

"This is the biggest assurance to foreigners," said Salimi.

Entry of foreign companies into Iran is a win-win situation for everybody, as it will increase competition in manufacturing, bring in new technologies and management practices, and finally boost the quality and lower the price of goods bought by Iranian consumers.