The Law on the Establishment and Management of Special Economic Zones
Islamic Republic of Iran
Part 1 – Object
Art. 1 –
In order to support economic activities, establish international commercial relation, motivate regional economy, produce and process goods, transference of technology, exportation of non-oil materials, establishment of creative jobs, attraction and encouragement of domestic and foreign investments, re-export, foreign passage to abroad (transit), and transference of goods (transshipment ), the government is permitted to establish regions known as Special Economic Zones in the cities having required talents and capabilities in order to achieve the above-mentioned objects.
In Special Economic Zones established for definite activities, determination of geographical limits, master plan and structural design, type and scope of authorized activities of each of them shall be determined as per this Act upon suggestion of Secretariat and approval of Board of Ministers.
Establishment of new Special Economic Zones shall be possible upon approval of the Islamic Consultative Assembly.
Part 2 – Definitions and Generalities:
Art. 2 –
In this Act the following words are used in lieu of the relevant names and expressions.
Country: Islamic Republic of Iran
Customs: Customs of the Islamic Republic of Iran
Zone: Special Economic Zone
Organization: Organization of each Special Economic Zone
Secretariat: Secretariat of the High Council of Free Zones
Art. 3 –
For execution of this Act the Board of Ministers shall take the following liabilities:
A- Determining or changing responsible organization of the zone including governmental and non-governmental.
B- Supervising the activities of the zones within the framework of the programs and objects thereof.
Board of Ministers can establish a governmental organization to manage Special Economic Zone, if necessary. Articles of Association of these Organizations shall be approved by Board of Ministers upon suggestions of the secretariat.
Determination of responsible organization in the zone from among non-governmental legal persons is subject to possession (or official delivery by related governmental authorities) and possession of the lands located at the limit of (within the limits of) special economic zone by non-governmental legal persons before issue of the license by Board of Ministers. Regulations for change of responsible organization in the zone are subject to the contract signed between secretariat and organization by observing this Act.
Art. 4 –
The organization, upon by-law will be approved by the Board of Directors, in addition to the services provided by the Executive Departments, can collect a certain amount of charge against providing general, infrastructure, engineering, facilities, storekeeping, discharge, loading, health, culture, communications, educational, and welfare services. Those natural and legal persons engaged in goods and services production activities are exempted from any duties applicable in the zone.
Art. 5 –
Activities of organization in the zone are merely within scope of activities permitted on the basis of this Act.
Art. 6 –
Annual budget of each zone, managed by the Governmental Organization, shall be prepared within policy making framework and observance of public programs and will be approved according to the provisions of Articles of Association.
Art. 7 –
Issuing the license for fulfillment of economic, development, construction, cultural, educational, and services being in compliance with policies and public regulations, framework of the comprehensive and structural plan, approved for each zone, will be placed at disposal of the responsible organization.
If case of any violation of any of the said policies and regulations, the concerning authorities shall inform the responsible organization of such violation, and the organization is obliged to remove such case of violation.
Part 3: Regulations for import and export of the goods:
Art. 8 –
Commercial transactions of this zone with other countries or other special economic zones as well as Special Economic Zones and Free Trade – Industrial Zones will be exempted from customs duties, commercial benefit, and all import and export duties after register in Customs. They shall be excluded from limitations and prohibitions stipulated in import and export regulations except those imposed lawfully and canonically. Commercial transactions of the zone with other placed in the country, except the zones mentioned above are subject to export and import regulations.
Those goods shipped to the Zone from other points in the country for applying and consuming purposes are assumed as internal shipments. But their export to abroad is subject to export and import regulations of the country, approved on Sept.26, 1993.
Those exporting goods for which export formalities (including bank and administrative affairs) is completed, shall be assumed as final after enter to export area.
Foreign made raw materials and parts imported to the zone for which import to the country for processing, changing, completion, or repair shall be subject to provisional import regulations and they will be returned to and settled within the zone for using purpose after processing, changing, completing or repairing provided fulfillment of minimum customs formalities.
Art. 9 –
Import of any amount of goods from zone to any part of Iran along with the passengers is forbidden.
Art. 10 –
Importers are authorized to sell (other = to be omitted) the whole or part of their goods imported to the zone against separated (partialize) warehouse receipt of transaction shall be issued by the Organization of that zone. In this case the holder of separated warehouse receipt shall be considered as owner of the goods.
Management of each zone is authorized to issue, upon request of the applicant, Certificate of Origin for those goods exported from the zone, provided confirmation of the Iran Customs Department. Banks of the country are obliged to accept the subject of this note.
Art. 11 –
Those goods produced or processed in the zone at the time of import to other points in the country shall be assumed as authorized and domestic produced goods for the whole amount of added value and value of domestic raw materials as well as inner parts, and therefore they are exempted from import duties.
Method of determination of added value shall be explained in executive by-law of this Act.
Foreign made raw materials and parts used in finished or processed goods shall be considered as domestic make raw materials and parts, provided paying import duties. Commercial Profit stipulated in import duties for automobile and its separated parts is determined upon observance of Art.72 of the Law for drawing part of financial regulations of the governments, approved on Feb.10, 2002.
Art. 12 –
Customs of the Islamic Republic of Iran shall accept request of owners of the goods for transit and direct shipping from other import gates to the zones and shall provide required facilities in this regard.
Art. 13 –
The grace period in which the entered goods stationed in the Zone is upon the discretion of the Director of the Zone. Regulations related to the stop of the goods in the places designated in the zone shall be determined and applied by the Organization.
Part 4 – Investment and Registration Regulations:
Art. 14 –
Method of reception, ingress and egress of foreign capital, profit gained thereof by the zone, procedure and the extent of foreigners’ participated in the activities of each Zone shall be based in accordance with the Law on the attraction and protection of foreign investments decreed on the March 10, 2002
Art. 15 –
State Organization for Registration of Title Deeds and Real Estates is authorized to carry out the following operations according to the by-law approved by Board of Ministers upon request of organization of the zone.
A) To register company or representation branches for those companies intended to activate in the zone, regardless of their domestic and/or foreign contribution and also register their material and intellectual ownership in the zone.
B) To partialize the properties and real estates located in the Zone with due to the views of the Zone Organization and issue of related partialized ownership documents with regards to the current state regulations.
Fifth Part: Miscellaneous Regulations:
Art. 16 –
Issues pertaining to employment, Labour relations, insurance, and social security in the zone shall be according to the approved and current regulations in Free Industrial–Trade Zones.
Art. 17 –
Any right possessed by natural and legal persons before establishment of zone shall be valid and they are authorized to continue their activities within framework of master plan of the zone.
Art. 18 –
Ministries, Organizations, Institutes, Governmental Companies and those affiliated to the government shall provide the zone with those required public utilities such as electricity, water, telecommunications, fuel, etc. within scope of their facilities at current approved rates for that geographical area.
Art. 19 –
The existing zones are subject to this Act and the responsible organizations established in Special Economic Zones until approval of this Act in order to continue their activities are obliged to comply with this Act within maximum one year (as of date of approval of this Act).
Art. 20 –
Special Economic Zones are excluded from Customs territory of the Islamic Republic of Iran, and the Customs Department, by observing provisions of Art.8 of this Act, is obliged to be stationed at the entrance and exit gates in order to exert imports and export regulations.
Art. 21 –
Activities made inside each zone, except those referred in this Act, shall be subject to observance of rules and regulations of the Islamic Republic of Iran.
Art. 22 –
The responsible public organization is authorized to sell its properties and lands in the concerned zone base on the prices determined by the expertise quotation.
Transfer of the lands subject to this article by natural and legal persons based on application of the land is subject to submission of Construction Termination Certificate, issued by the organization of each zone.
Art. 23 –
As of date of approval of this Act in the zones where they have governmental responsible organization or affiliated, that organization shall be liable against any rights, powers, and legal obligations of the Ministry of Jihad Keshavarzi, Organization for Jungle and Pastures in the Land Affairs and Natural Resources of each zone.
Art. 24 –
Applying governing issues based on statuary regulations is the responsibility of the government.
Art. 25 –
Executive by-law of this Act shall be approved by Board of Ministers upon suggestion of the Ministry of Finance and Economic Affairs, Ministry of Commerce, and State Organization for Management and Planning as well as Secretariat of High Council of Free Zones.
The above-mentioned Act consisting 25 Articles and 12 Notes was approved in public meeting of the Islamic Consultative Assembly held on June 1, 2005 (Wednesday), and it is approved by Expediency Assembly on Nov.26, 2005 by amending Note (1) and adding one note to it and notes (1), (2) to Art.3 as well as adding one article entitled Art.24.