Before Islamic Revolution in 1978, foreign companies, branches or representations were simply registered in Iran, in accordance with article 3 of “Registration of Companies Act” (1932) and there were neither any distinction between registration of Foreign Company, Foreign Branch and Foreign Representation, nor any legal obstacle and impediment for their registration. However, after Islamic Revolution, registration of foreign companies, branches and representations was considered against article 81 of the constitution according to which “granting concessions for establishing companies and institutes in the field of trade, industry, agriculture, mines and services to foreigners, is strictly forbidden”.

  In 1999, with due consideration of global economic requirements and foreign companies’ strong desire to participate in commercial and economic activities in Iran, the government passed a law that allows foreign companies to register their branches or representations in Iran. Meanwhile, only foreign companies that had signed contracts with governmental organizations and institutes, in order to fulfill their contractual obligations, could register their branches in Iran.

 According to the “Permission for Registration of Foreign Companies’ Branches or representations” Act, companies, which have established and registered in accordance with the respective laws and regulations in their country of origin, may register their branches or representations, provided that Iranian companies are allowed to register their branches or representations in their respective country.

According to article 1 of the “executive bylaw on the Permission for Registration of Foreign Companies’ Branches and Representations”, foreign companies may register their
branches or representations in Iran on the following grounds:

1-     Rendering after sale services (e.g. guaranty and warranty) for the goods and services sold to the Iranians;

2-     Executing and implementing contracts entered into with the Iranians;

3-     Study and preparation for investment in Iran;

4-     Cooperation with Iranian technical and engineering companies to carry out projects in other countries;

5-     Enhancing Iran’s non-petroleum export and transfer of know-how and technology to Iran;

6-     Performing activities, the license of which has been issued by competent authorities, in accordance with relevant laws and regulations (e.g. services in the field of transportation, goods inspection and insurance, banking, marketing etc.)