Economy, Domestic Economy

Renewed Interest of Foreign Investors

Renewed Interest  of Foreign Investors
Renewed Interest  of Foreign Investors

The number of applications by foreign investors choosing Iran as their trade destination has increased fivefold during the past 12 months, director of Iran's Organization for Investment and Economic and Technical Assistance, Mohammad Khazaee, said yesterday, IRNA reported.

"Famous foreign firms and economic delegations from Europe, Latin America and Arab countries are serious in boosting trade with Iran," he said, while addressing an international confab on investment in Hamedan Province.

Recently, an official with the Tehran Stock Exchange said that the TSE receives three trading code applications from foreign investors each week, a number that seems promising given that Iran's economy is still suffering from the sanctions and restrictions imposed by the US and Europe.

"Despite the financial restrictions, the number of active traders at the TSE will surely rise, as the high dividend shares at the equity market are highly sought-after by international investors," Director of the Tehran Stock Exchange, Hassan Ghalibaf-Asl, stated.

Khazaee further said that investment and long-term ownership must replace speculation and short-term trading. "This will ultimately make the return of capital possible," he asserted.

He further noted that attracting foreign investors will bring technology and expertise into Iran and will help improve political and economic relations with other countries.

"Encouraging foreign investment has been the key for the success in emerging economies such as Brazil and China," he said.

Meanwhile, Khazaee said that foreign investment is highly encouraged by the government and the Leader, adding, "Proper laws and adequate transactional infrastructure are the important prerequisites for attracting foreign investment."

>>Market Stability

Upon his election, President Hassan Rouhani, promised to open Iran's economy to the outside world, following years of stagnation created mainly as a result of the ongoing dispute with the west over Tehran's nuclear energy program.

On October 7, Rouhani said his government has prepared a comprehensive plan to attract foreign and domestic investors, and bring back foreign companies to the Iranian market.

Rouhani's move is seen to be part of his government's broader plan to pull the economy out of recession. The administration is seeking to provide a proper and secure investment and business environment, create market stability and optimism for the future and is, thus, taking measures "to secure good returns to make investment opportunities for private sector more attractive," Rouhani said recently.   

Rouhani also said that his government is trying to help strengthen the private and cooperative sectors, and invite entrepreneurs and investor who he said could bring with them "enormous potentials".

In the meantime, deputy chairman of Iran's Chamber of Commerce, Industries, Mines and Agriculture, Ala Sadeghi, said last week that Iran is determined to support foreign investment and joint ventures.

"Iran offers exceptional opportunities for investment," he said, adding, "We welcome foreign investors who aim to do business in Iran and are ready to remove the hurdles they might face in this regard."

Some officials also believe that the issue of foreign investment needs to be handled with outmost care, cautioning that mishandling of the issue may produce negative results. For instance, Managing Director of Aras Free Zone Mohsen Khadem said on Wednesday that foreign investment is welcome should the government changes its view of investment by foreign companies.

"Finances and loans are not enough for the development of investment and exports. It is rather the official attitude towards the issue that must change.  Short-sightedness will only result in skepticism," he asserted.

The decade-long nuclear standoff between Iran and the West has made many foreign investors avoid taking the risk of making investments in the Iranian market. However, with the last round of nuclear talks currently underway in Vienna, the government hopes that a final deal will make it possible to start large projects with the participation of future foreign companies.   

The German ambassador to Tehran, Michael Freiherr von Ungern-Sternberg, recently said, "European companies are waiting for a comprehensive deal between Tehran and the P5+1 group of world powers, and that will quickly send them to Iran for investment."