Seif Makes Pitch for Asian Investment

Iran on Wednesday urged Asian companies to invest in the country, saying the lifting of nuclear-linked sanctions had opened vast opportunities for foreign capital.

Central bank governor Valiollah Seif told a business seminar in Singapore that reforms put in place since President Hassan Rouhani took office in 2013 helped restore economic stability while the lifting of sanctions had reintegrated the economy with the rest of the world, Middle East Online reported.

During the 1st Iran Investment Summit”, the CBI chief also enumerated the characteristics and potentials of the Iranian economy. In his speech, published on the CBI’s website, he pointed to Iran’s sizable, capable banking sector saying the sector has been boosted by international experience and transparency of banking activities.

“Efforts to address high NPLs, low profitability, and weak credit growth include strengthening the central bank’s supervisory powers and extending them to all banks and financial institutions,” Seif said.

“The central bank is strengthening regulation and supervision to ensure proper risk management practices in banks and compliance with international standards, including on corporate governance and capital and liquidity requirements set by the Basel Committee.”

 Iran’s gross domestic product is expected to grow 5.0 % this year and next, up from 3.0 % over the past two years, Seif told the private seminar of businessmen from Singapore, Malaysia, South Korea and Australia.

Iran in January signed a historic deal with six world powers (the five permanent members of the UN Security Council plus Germany) to end years of sanctions in exchange for curbs on its nuclear program.

“The lifting of sanctions has created unprecedented opportunities for investors,” Seif said.

Outside oil and gas, investors can also seek opportunities in petrochemicals, steel, copper mining, pharmaceuticals, telecoms, aviation, machinery, tourism, infrastructure and information and communication technology, he said.

Seif cited Iran’s $450 billion economy, skilled and educated workforce, 80 million population and cheap access to energy resources among the country’s advantages.

Iran has the world’s biggest gas reserves and the third largest oil reserves, he said.

 Home Advantage

He added that Iran’s Foreign Investment Promotion and Protection Act ((FIPPA) provides investors advantages such as sovereign guarantee repatriation guarantee, equal treatment with local investors with access to international arbitration and courts. Seif noted that tax regime in Iran is very friendly with flat corporate tax of 25%, no distinction between foreign and  local firms, a personal tax maximum of 35% and VAT being at 9%.

“Iran’s foreign debt is negligible, its balance of payment is positive and the surplus in the overall balance of payment of the economy was sustainably positive during the past few decades. Therefore the low level of foreign debt, which is around 2% of GDP, is a source of confidence in future performance of the country in absorbing foreign finance and investments,” Seif said.

 “Iran has an impeccable payment track record despite revolution, war, sanctions and other adverse situations.”

He said the comparative advantages of Iranian economy include strong social solidarity despite the high ethnic diversity, stable and secure position in a chaotic and unstable region, relatively robust infrastructure, 50 years of experience in manufacturing, educated workforce, rich entrepreneurial culture, competitive wage rate and opportunities for energy saving investment.

Hussein Yaghoobi, director-general for international affairs at the CBI, said at the meeting that since the lifting of sanctions, companies from China, Japan and South Korea had visited Iran.

“We have had a lot of negotiations. Some of them have actually led to concrete agreements with the Iranian side,” he told reporters, adding that there was still “a lot of potential” for further investment talks.

Despite the lifting of nuclear-linked sanctions, the United States and the European Union still impose penalties against Iran over its ballistic missile program and human rights record.