Iran qualifies from many respects to be a good location for investment and doing business. Some of the features are highlighted below:

1- Strategic Location:
A unique geographical location at the heart of a cross-road connecting the Middle East, Asia and Europe, empowered by many inter- and trans-regional trade, customs, tax and investment arrangements;
2- Market Potentials and Proximity:
Vast domestic market with a population of 70 million growing steadily as well as quick access to neighboring markets with more than 350 million inhabitants;
3- Labor Privileges:
Large pool of trained and efficient manpower at very competitive costs in a diversified economy with an extensive industrial base and service sector;
4- Developed Infrastructure:
Territory developed networking in the area of telecommunication, roads, airports, sea ports and railways across the country;
5- Low Utility and Production Cost:
Diversified range of energy, telecommunication, transportation, as well as public utilities with competitive prices;
6- Abundant Natural Resources:
Varied and plentiful reserves of natural resources ranging from oil and gas to metallic and non-metallic species reflecting the country's accessibility to readily available raw materials;
7- Climatic Characteristics:
A four-season climatic endowment as a privilege to agricultural activities throughout the country and throughout all seasons.
Main Areas
Recent structural reforms such as trade liberalization and foreign exchange rate rationalization offer increased opportunities for investment. The country is endowed with plentiful reserves of natural resources ranging from oil and gas to metals. However, in order to benefit from these resources, the country needs to increase production capacity.

Agriculture and Agrifood

About 20% of the land in Iran is arable. The main food-producing areas are in the Caspian region and in the valleys of the northwest. Some northern and western areas support rain-fed agriculture, while other areas require irrigation for successful crop production.
Agriculture contributes just over 11% to the gross national product and employs a third of the labor force. By 1997, the gross value of products in Iran's agricultural sector reached $25 billion and by 2003, a quarter of Iran's non-oil exports were agric. It has also provided raw materials for sugar refineries, flour mills, gunny weaving, and silk yarn manufacturing. Production of dyes from agricultural products, and wool from sheep breeding have been important elements in the manufacture of Iran's most famous traditional export product, i.e. carpets, preserved (canned) fruits, tomato paste, vinegar, fruit juices, and raisin and date syrup, have always been important processed foods, whose industry is rapidly expanding and becoming modern and up to date. Potato chips, biscuits, and other sweets are also strong food processing areas. The processed food industry is a very important sector of Iran's economy. So is agriculture, and both together have become essential for the economy and very prominent in the eyes of Iran's policy-makers.
Fishing is also important, and Iran harvests fish both for domestic consumption and for export, marketing their products fresh, salted, smoked, or canned. Sturgeon (yielding its roe for caviar), bream, whitefish, salmon, mullet, carp, catfish, perch, and roach are caught in the Caspian Sea, Iran's most important fishery.
Total agri product imports of Iran were US $ 3.2 billion in FY 2006-07, accounting for 8% of the country's total imports. Iran's major deficiency in the agriculture and agri-food sector is the country's dependency on edible oil imports followed by animal feed. About 70% of the country's edible oil is imported in the form of oilseeds, crude oil or finished products amounting to over $1 billion per year. Implementation of wheat self-sufficiency plan and the support policy for the guaranteed purchase of wheat at prices higher than international rates, as well as the relative improvement in the guaranteed purchase of wheat compared with other competitive crops (including barely) have contributed to the increasing growth of wheat production over the recent years. In recent years a number of Government incentives including high guaranteed price and low-interest-rate loans to wheat farmers have encouraged many farmers to shift from other crops to cultivating wheat.
At the end of FY 2006-07, net outstanding facilities extended by banks and credit institutions to the agriculture sector amounted to around US $ 17 billion up by 42.3 % compared with the previous year-end. Although Iran was a net importer of wheat for many years, now it has reached a point where wheat exports are possible. The increase in the local grain and oilseeds output in recent years has faced the country with great shortage of storage facilities. For the past 5 years, Iranian market has had a high and steady demand for grain storage systems. Presently Iranian storage capacity is about 8-9 million tons while the production volume stands at 23.5 million tones. Therefore investment opportunities exist in establishment of more storage systems and purchase special equipment (such as loading/off loading, handling and storage systems) to facilitate wheat exports.
Iran has achieved a remarkable improvement in its cattle and sheep farming not to mention poultry farming (mainly chicken) in the past decade. This is an area where private sector has a dominant share compared to the public sector. The continued expansion of industrial farming both for dairy and meat production has significantly increased the need for quality genetic materials. In the livestock sector, Iran has a large poultry and dairy industry and imports close to two million tons of feed grain annually.
Domestic production of meat (lamb, chicken, beef and goat) is estimated at over 2 million tons annually, which is almost sufficient to meet domestic demand. However some imports of various types of halal meat are allowed in order to maintain the price stability. The Iranian government has announced plans for increasing local milk production from the current 6.5 million tons to 12 million tons within the next 10 years.
The emphasis for the potential investors in this sector would be on supporting technology imports including seeds, irrigation techniques and equipment etc. In addition focus on food processing and packaging will provide opportunities for equipment supply and technical consultancy.
Other agribusiness opportunities exist in education and training, consultancy and the supply of fertilizers, pesticides, herbicides.
From a foreign investor perspective, the areas and products of potential interest are listed below:
- Livestock and related commodities and services
- Edible oil–Soya and Canola
- Oilseeds, mainly Soy beans
- Grains/Cereals: wheat, corn, barley
- Agriculture equipment and machinery
- Food processing, packaging (machinery, know how, consultancy)
- Storage facilities/handling equipment for grains/oilseeds
- JV opportunities in cattle farming and food processing
- Halal meat, Fish & sea food
- Transfer of technology in Agriculture industry

Should you wish to invest in this sector?
the following incentives are available:
Corporate Income Tax Exemption:
The income derived from all agriculture and horticulture activities, animal rearing, fish farming, bee-keeping, poultry husbandry, hunting and fishing, sericulture, revival of pastures and forests, is exempt from payment of tax. All the natural and juridical persons (Iranian and Foreign) can enjoy above mentioned exemption at the outset of their activities.
Salary Income Exemption:
50% of the salary tax of the employees working in less developed regions, as per the list prepared by the President Deputy Strategic Planning and Control shall be spared. All natural persons (Iranian and Foreign) working in the less developed regions can enjoy tax exemption until their workplace is included in the above-mentioned list.
Export Exemption:
In line with its policy concerning the promotion of exports and expanded presence of domestic manufacturers in the international markets, the government of the Islamic Republic of Iran has prescribed special incentives and exemptions on the export of goods and commodities.
According to Article 33 of Implementing Regulations (1994) of the Export-Import Law, the assessment of export tariffs is carried out by the Pricing Committee. Exporters should fill the relevant customs clearance forms accordingly. However, it is evident that exporters have the right to express their views on the pricing of their goods and commodities.
According to the Law on Drawback of customs tax & duties on machine made productions of domestic factories (1966), Article 14 of the Export - Import Law (1993) and Article 25 of the Implementing Regulations (1994) of the same law, all taxes and duties collected by the Organization for the Protection of Consumers & Producers, on all goods, materials and parts used in the production of exported goods will be paid back to the exporter. It should be noted that the Drawback rate is based on the tariff and value of materials and parts at the time when export is made.
A) 100% of the income derived from exportation of industrial finished goods and products of agricultural sector (including forming, horticulture, husbandry, poultry, fishery, forest and pasture products) and its conversional; signal and complementary industries, and also 50% of the income earned from exportation of other goods that are exported for achieving the objectives of the exportation of non- oil goods, shall be exempt from tax. A periodical list of goods, during development plan based on proposal of the respective Ministries of Economic Affairs and Finance, Commerce, Jihad Agriculture and Industries and Mines, shall be approved by the council of Ministers.
B) 100% of the income derived from exportation of different goods which have been, or will be, imported to Iran on transit, and are exported without making any changes in the substance there of, or doing any works on them, shall be exempt from tax.

Specific incentives
Customs Exemption:
Customs exemptions are, in fact, exemption from partial or full payment of customs tax and duties on imported goods & commodities. These exemptions are determined according to special rules and regulations. The cases where customs exemption is permitted mainly include:
1. Export of packing equipment temporarily imported into the country is exempted from customs tax and duties on condition that the packed goods are actually exported out of the country.
2. All machineries imported for the purpose of agricultural husbandry, industrial, mining and packing are exempted from customs tax and duties.
3. All agricultural equipment and machineries and their spare parts are exempted from customs tax and commercial benefit tax if
a) They have been imported to the country according to general regulations prevailing export - import activities
b) They are not manufactured domestically and;
c) The Ministry of Jihad Agriculture assesses and confirms their importation.
4. Upon suggestion of the relevant and respective Ministry and the approval of the government, discount or general exemption will be given on customs tax & duties and commercial benefit tax relevant to raw materials and spare parts of agricultural machinery, which have been imported by domestic factories and completed, assembled or manufactured in the same.
5.Raw materials and equipment of the agriculture and mining industry, and production machinery in different fields of industry and mining, and laboratory, scientific, technical and research instruments are eligible to enjoy certain exemptions as determined by the Harmonized System of Coding.

Additional incentives
•A flat fixed rate of 25% on taxable Income in addition to the various tax breaks.

Industry and Manufacturing

Iran continues to be regional player in auto manufacturing and ranked as the 16th biggest automaker of the world in the year 2006.
Petroleum, Gas, Petrochemical, Steel, Weaving, Food Processing, Car, Electrical and Electronics Industries are among the key industries in the country. Iran now produces a wide range of manufactured commodities, such as telecommunications equipment, industrial machinery, paper, rubber products, steel, food products, wood and leather products, textiles, and pharmaceuticals. Iran is also known throughout the world for its hand-woven carpets. The traditional craft of making these Persian rugs contributes substantially to rural incomes and is one of Iran's most important export industries. A large public enterprise sector dominates Iran's manufacturing sector (60 percent of sector output), in addition to the quasi-public bonyads which have a large presence in the manufacturing, and commercial sectors. The Handicrafts, Household and traditional industries such as carpets, coarse carpets, inlaid, inlayer and ceramic industries are also considered the key local manufactures. In addition Iran would like to be regional player in auto manufacturing and ranked as the 16th biggest automaker of the world in the year 2006. Over one million and eighty four thousand automotives were produced in the year 2006-2007 which constituted 1.43% of the total automotives produced in the world. The country's flagship 'national car', the Samand, is enjoying some success in foreign markets and is particularly attractive to emerging markets due to its affordability, which could give it a strong foothold in the regional/international markets. In order to develop the manufacturing industry, the Bank will capitalize on providing credits and facilities to manufacturing sector with employment and exporting potential. Special emphasis will be given to foodstuffs and pharmaceuticals, electrical equipment producers, furniture and rubber/plastic producers.
Handicraft
In handicraft, Iran has a long tradition of producing artisan goods, including Persian Carpets, ceramics, copperware and brassware, glass, leather goods, textile, and woodwork. The Handicrafts, Household and traditional industries such as carpets, vcoarse carpets, inlaid, inlayer and ceramic industries are also considered the key local manufactures.
Iran has the world's largest zinc reserves and second-largest reserves of copper.

Mining

Iran is rich not only in oil and gas, but in mineral deposits, as well. Iran has the world's largest zinc reserves and second-largest reserves of copper. It also has important reserves of iron, uranium, lead, chromate, manganese, coal and gold. In addition to the major coal mines found in Khorasan, Kerman, Semnan, Mazandaran, and Gilan, a number of smaller mines are located north of Tehran and in Azerbayjan and Esfahan provinces. Deposits of lead, zinc and other minerals are widely scattered throughout the country. The mines at SarCheshmeh in Kerman Province contain the world's second largest lode of copper ore. The government owns 90% of all mines and related large industries in Iran and would like to attract foreign investment for the development of the mining sector. In the steel and copper sectors alone, the government is seeking to raise around US $ 1.1 billion in foreign financing. As per Article 44 of Constitution of Iran, the government has been actively promoting the privatization of all mines.
In this regard, new investments ventures particularly transfer of know-how, long-lasting machinery and equipment as well as exploration and development of mining industry which has remained underdeveloped, are highly encouraged.
In the industrial minerals sector, development or expansion projects in the cement, magnesium compounds, potash, and stone industries are recommended.
Developing its mineral resources is a priority for the Iranian government. The government is actively encouraging foreign participation in this sector.
Starting from the third Five-Year Development Plan (2000-2005) the government has been encouraging public-private-participation as well as buy-back deals but also welcomes other forms of foreign investment in this sector.
Energy, Gas, Petroleum and Petrochemicals

The Ministry of Industries and Mines is the main decision-maker in this sector. It has been operating through number of national companies, including ones responsible for steel, copper, exploration and smelting. However as explained this state control could be short-lived as the government actively pursuing the private participations.
Iran's most important economic sector is also the most promising sector for businesses.
According to Oil and Gas Journal, Iran has 136 billion barrels of proven oil reserves, or roughly 10 percent of the world's total proven petroleum reserves as of January 1, 2007; it has the second largest gas reserves in the world. The state-owned National Iranian Oil Company (NIOC) is responsible for oil and gas production and exploration. The National Iranian South Oil Company (NISOC), a subsidiary of NIOC, accounts for 80 percent of local oil production covering the provinces of Khuzestan, Bushehr, Fars, and Kohkiluyeh via Boyer Ahamd. Though private ownership of upstream functions is prohibited under the Iranian constitution, the government has allowed for buyback contracts which allow International Oil Companies (IOCs) to enter exploration and development through an Iranian affiliate. The contractor receives a remuneration fee, usually an entitlement to oil or gas from the developed operation, creating new opportunities for investment. Iran has been rebuilding its oil production and export facilities.
With a fertilizer plant in Shiraz and the largest ethylene unit in the world in Asalouyeh among other projects, Iran expects to see a surge in petrochemical exports from of $5.5 billion in 2007 to a total of nearly $12 billion in 2010.
Iran manufactures 50-80% of its industrial equipment domestically, including refineries, oil tankers, drilling rigs, off¬shore platforms and exploration instruments. In February 2008 the Iranian Oil Bourse was inaugurated in Kish Island to trade crude oil and petrochemical products. The transactions are made in the Iranian Rial and other major currencies (except for USD).
The small-medium sized projects with an aim to increase production capacity and the value-added of hydrocarbon exports are highly encouraged.
Iran has the world's largest zinc reserves and second-largest reserves of copper.
The small-medium sized projects with an aim to increase production capacity and the value-added of hydrocarbon exports are highly encouraged.
The government is stepping up exploration and developing its petrochemical industry.
Iranian natural gas consumption is growing fast, but so is production from the South Pars field and elsewhere, meaning that the country could become a significant gas exporter in coming years. Iran contains an estimated 940 trillion cubic feet (Tcf) in proven natural gas reserves the world's second largest and surpassed only by Russia.
Around 62 per cent of Iranian natural gas reserves are located in non-associated fields, and have not been developed, meaning that Iran has great potential for future gas development. The development of the multiphase South Pars natural gas project is expected to continue for a number of years.
The potential investors willing to participate on construction of new or rehabilitation of existing energy infrastructure, designed to improve local and regional energy transportation and distribution are encouraged to invest in this sector.
The small-medium sized projects with an aim to increase production capacity and the value-added of hydrocarbon exports are highly encouraged.
As part of the Iranian Economic Recovery Plan, a bill which passed by the parliament on January 5, 2010, the heavily subsidies of the price of refined oil products which has been contributing to the increased domestic demand, will be curbed and managed with the intention of increased productivity. Iran has been boosting its refinery capacity to produce light fuels, and to decrease its import of gasoline supply. Iranian domestic oil demand is mainly for gasoline and automotive gas oils, but domestic demand for other oil products are declining due to the substitution of natural gas. Large expansion projects at Bandar Abbas, including new catalytic reformers, distillation units, and condensate splitters will help supply the domestic demand, but it will probably not eliminate all gasoline imports.
In this regard the potential investors are encouraged to focus on projects rationing refining capacity, as well as compressed natural gas (CNG) production, which will reduce Iranian gasoline import demand.

Corporate Income Tax Exemption:
80% of the income from producing and mining activities, which is derived and declared by producing and mining enterprises of cooperative and private sectors for whom exploitation licenses are issued, or with whom extraction and sale contracts are concluded, by relevant Ministries, shall be exempt from the tax set forth in the Article 105 of Direct Taxation Act, for a term of 4 years beginning the date of exploitation or extraction. As regards the less developed regions, the exemption shall apply to 100% of the income for a term of 10 years.

Salary Income Exemption:
50% of the salary tax of the employees working in less developed regions, as per the list prepared by the President Deputy Strategic Planning and Control shall be spared. All natural persons (Iranian and Foreign) working in the less developed regions can enjoy tax exemption until their workplace is included in the above-mentioned list.

Customs Exemption:
Customs exemptions are in fact exemption from partial or full payment of customs tax and duties on imported goods & commodities. These exemptions are determined according to special rules and regulations. The cases where customs exemption is permitted mainly include:
1. Export of packing equipments temporarily imported into the country is exempted from customs tax and duties on condition that the packed goods are actually exported out of the country.
2. All machineries imported for the purpose of industrial, mining and packing are exempted from customs tax and duties.
3. All producing machineries which have been imported by eligible producing, industrial and mining units and upon the approval of the Ministry of Industries and Mines are exempted from customs duties and commercial benefit tax upon confirmation of the aforementioned ministry.
4. Upon suggestion of the relevant and respective Ministry and the approval of the government, discount or general exemption will be given on customs tax & duties and commercial benefit tax relevant to raw materials and spare parts of industrial machinery, electric & electronic equipment, and transportation vehicles which have been imported by domestic factories and completed, assembled or manufactured in the same.
5.Raw materials including chemical productions, ordinary metals, parts and equipment of the textile, and mining industry, and production machineries in different fields of industry and mining , and laboratory , scientific, technical and research instruments are eligible to enjoy certain exemptions as determined by the Harmonized System of Coding.

Export Exemption:
In line with its policy concerning the promotion of exports and expanded presence of domestic manufacturers in the international markets, the government of the Islamic Republic of Iran has prescribed special incentives and exemptions on the export of goods and commodities.
According to Article 33 of Implementing Regulations (1994) of the Export-Import Law, the assessment of export tariffs is carried out by the Pricing Committee. Exporters should fill the relevant customs clearance forms accordingly. However, it is evident that exporters have the right to express their views on the pricing of their goods and commodities.
According to the Law on Drawback of customs tax & duties on machine made productions of domestic factories (1966), Article 14 of the Export - Import Law (1993) and Article 25 of the Implementing Regulations (1994) of the same, all taxes and duties collected by the Organization for the Protection of Consumers & Producers, on all goods, materials and parts used in the production of exported goods will be paid back to the exporter. It should be noted that the Drawback rate is based on the tariff and value of materials and parts at the time when export is made.
A) 100% of the income derived from exportation of industrial finished goods and its conversional–signal and complementary industries, and also 50% of the income earned from exportation of other goods that are exported for achieving the objectives of the exportation of non-oil goods, shall be exempt from tax. A periodical list of goods, during development plan based on proposal of the respective Ministries of Economic Affairs and Finance, Commerce, Jihad Agriculture and Industries and Mines, shall be approved by the council of Ministers.
B) 100% of the income derived from exportation of different goods which have been, or will be, imported to Iran on transit, and are exported without making any changes in the substance there of, or doing any works on them, shall be exempt from tax.
Specific incentives
Customs duties exemption for capital goods that have no locally made counterparts.

Additional incentives
Flat fixed rate of 25% on income in addition to the various tax holidays.

Construction and real states

The relatively stagnant condition prevailing in housing sector started since 2003, continued and ran into 2006, mostly in Tehran and other large, medium-sized and small cities. This trend, however, changed in the second half of 2006, and construction activities started booming. The total number and floor space stipulated in permits issued by Tehran municipality recorded rise of 35.7% and 35.2% compared with the previous year. These developments were a sign of improvement in construction activities in Tehran. The housing industry is one of the few segments of the Iranian economy where state capital shares as little as 2 % of the market, and the remaining 98 % is private sector investment. It is estimated that 70 % of Iranians own homes, with huge amounts of idle capital entering the housing market every year. Statistics for March 2006-7 put the number of Iranian households well over 16 million and the total number of housing units well over 14 million, signifying a demand for at least 5.1 million units. Every year, 750,000 additional units are needed, as young couples embark on married life.
The potential investors should aim at support and launching of mass development projects, the use of new technologies as well as new construction materials.
In addition, the investors can capitalize on opportunities which exist in Iranian construction sector, particularly in construction of dams, tunnels, industrial projects, etc.

Common incentives:
- Investment independently or in partnership with Iranian persons;
- No restrictions on the percentage of the share holdings;
- Free repatriation of net profits and capital; no specific approval and/or licenses required;
- The legal rights of foreign investors are guaranteed; in the event of nationalization, the respective investors shall enjoy the coverage sought in «Foreign Investment Promotion and Protection Act (FIPPA)»

Specific incentives:
- Several incentives have been made available by certain specialized banks such as Bank Maskan and also the government backed Mehr Project.
- The government has put special emphasis and supports for mass-housing projects.
- Other Incentives are offered to those wishing to establish and or engage in investing in Construction and Housing in Free Zones (Kish Island, Qeshm and Port of Chabahar).
- Exemption from all kinds of taxes for the first 15 years;
- Foreign investors may lease land with reasonable rents, and own the buildings and other installations built on the land.

Telecommunication and Information Technology

The telecom sector is considered as one of the fastest growing and most promising industries of the Iranian economy, which has yet to be fully explored by foreign companies. With an estimated population of 73 million and a very unique demography (close to 70% under the age of 30), as well as a strategic geopolitical position in the Middle East, Iran has the potential to become the telecommunications hub of the region.
In recent years the government has set ambitious targets for further expansion of the telecom industry and to open it up to the private sector. The deregulation and breaking of monopoly is now being implemented, with new licenses being auctioned and a few private players already having been granted the right to execute and operate mobile and fixed telephony services in the country.
In view of local limitations and the needs of the Iranian ICT sector to connect to the latest ICT technologies, suitable opportunities in the following fields are to be underlined:
- Satellite based systems especially VSAT;
- Intelligent tracking systems;
- Wireless communication and broadband services especially for rural areas where the network infrastructure is not available,
- VOIP services (software and hardware),
- ICT software solutions (including ERP, CRM, etc.);
- ICT training and consulting services,
- E-commerce & E-banking, network security, hardware and software for SMS communication,
- High tech telecommunication networks/equipment and IP & optical fiber systems/solutions.
The number of Internet subscribers in Iran stands at more than 11 million (with a penetration rate of 16.7%) and the number are expanding rapidly. In addition, the demand is estimated to be over 20 million and the Iranian Ministry of ICT has plans to increase the number of internet subscribers to 25 million by the end of 2010, at a penetration rate of 30%.
By devising privatization policy and limiting government's role to supervision, it is expected that growth in the communications, telecommunications and IT industries would be expedited and International Banks will support projects in this emerging market. The decision makers in the telecommunications field are the Ministry of Information & Communication Technology. The operating company, Telecommunication Company of Iran (TCI) has been privatized and its share is traded in the Stock Exchange market.

Transport

Since the early 1990s the Iranian government has allocated considerable resources to road construction and repair. The activities in the transportation sector accelerated in 2006/07.
15.3% growth in air transport and 13% in sea transport.
Iran's network of roads connects Turkey, Nakhichevan, Armenia, Azerbaijan, Iraq and Turkmenistan, on the one side, to Turkmenistan, Afghanistan and Pakistan on the other. Iran has a long paved road system linking most of its towns and all of its cities.
Tehran, Mashhad, Shiraz, Tabriz, Ahvaz and Esfahan are in the process of constructing underground mass transit rail lines. Iran's aviation sector is in growth mode.

Production Activities Exemption:
80% of the income from producing activities, which is derived and declared by producing enterprises of cooperative and private sectors for whom relevant licenses have been issued, or with whom sale contracts are concluded, shall be exempt from the tax set forth in the Article 105 of Direct Taxation Act, for a term of 4 years beginning the date of exploitation or extraction. As regards the less developed regions, the exemption shall apply to 100% of the income for a term of 10 years.
Salary Income Exemption:
50% of the salary tax of the employees working in less developed regions, as per the list prepared by the President Deputy Strategic Planning and Control shall be spared. All natural persons (Iranian and Foreign) working in the less developed regions can enjoy tax exemption until their workplace is included in the above-mentioned list.
Customs Exemption:
Customs exemptions are in fact exemption from partial or full payment of customs tax and duties on imported goods & commodities. These exemptions are determined according to special rules and regulations. The cases where customs exemption is permitted mainly include:
Specific incentives
Customs duties exemption for capital goods that have no locally made counterparts.

Services:
Estimates of service sector spending in Iran are regularly around 3.3% of the GDP. Urbanization has contributed to significant growth in the service sector. Important service industries include public services (including education), commerce, personal services, professional services, retail business and tourism.

Retail Business:
With increased urbanization, demand for new products has increased efforts to modernize the retail sector in Iran is being extended and followed up effectively. The more traditional urban bazaar remains at the heart of Iranian commerce. However, change is being accelerated by high oil prices, increased wealth, and the young population. The retail industry in Iran is largely in the hands of cooperatives and independent retailers (who operate through the bazaar networks) and foreign involvement is minimal.
At present the private sector has the biggest share of the country's overall economic plans, mostly consisting of small retailers operating through traditional urban bazaars. Iran has a large potential for development of retail sector largely because of its huge population, increasing demand and its untapped market.
In this context, the potential investment to finance operations and projects for production of consumer goods and development of shopping malls, stores, outlets and supermarkets in the largest cities such as Tehran, Esfahan, Mashhad, Tabriz and Shiraz are highly recommended.

Tourism

Iran is striving to find alternative revenue sources to its finite, but huge, oil and gas reserves. In this respect tourism is a good alternative. Iran has drawn up an ambitious 10-year plan for the 2005-15 periods to promote tourism. Iran really enjoys the most ancient world civilization and because of the diversity of climates as well as beautiful cultural, historical and natural attractions, it is considered one of the most tourist centers of the world. UNESCO has indicated eight World Heritage Sites in Iran namely Bisotun, Soltaniyeh, Bam, Pasargad, Takht-e-Soleyman, Naghsh-e-Jahan, Tchogha-Zanbil and Perspolis. The country has a wide array of tourism activities including an extensive choice of ecotourism and religious tourism.
According to the statistical center of Iran during 2006/07 over 2.7 million tourists visited Iran, which showed an increase of 44.8% in comparison with the previous year.
Iran's 20-Year Vision document envisions that Iran would accommodate two percent of international tourists per year by 2025.
Accordingly, it is estimated that around US$ 50 billion worth of investment opportunities would be available in Iran's tourism industry. Given the country's capacities and potentials, the sector needs effective information dissemination, investment and professional management for the development of tourism industry. Such broad appeal represents significant potential for foreign investment to provide finance for tourism projects, especially development of accommodation facilities like hotels, motels, and camping places, roadside service complexes, handicrafts marketplaces, residential coastal units, and recreational facilities as well as projects in ecotourism and religious tourism.

Salary Income Exemption:
50% of the salary tax of the employees working in less developed regions, as per the list prepared by the President Deputy Strategic Planning and Control shall be spared. All natural persons (Iranian and Foreign) working in the less developed regions can enjoy tax exemption until their workplace is included in the above-mentioned list.