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About Business Environment of Iran

Doing Business In Iran

  1. In Doing Business 2013, Iran is ranked 145th out of 185 economies. Its overall score is 1 point lower than last year, reflecting a decline of 37 points in the Starting a Business indicators.
  2. The World Bank's Worldwide Governance Indicators place Iran below the 10th percentile for the Voice and Accountability, Political Stability, and Regulatory Quality indicators. Iran is near the 40th percentile for the Government Effectiveness indicator.
  3. Iran’s economic freedom score is 42.3, making its economy the 171st freest in the 2012 Index. Its score has increased by 0.2 point from last year, with a notable decline in business freedom offset by small improvements in five of the 10 economic freedoms. Iran is ranked 16th out of 17 countries in the Middle East/North Africa region, and its overall score is well below the world and regional averages.

Source: World Bank

 

Visa Information

Perhaps the biggest reason more people don’t come to Iran is that getting a visa can be unnecessarily frustrating. Even though part of the Iranian government is trying to attract international tourists, with the ambitious if spectacularly deluded target of 20 million tourists by 2020, suspicion bordering on paranoia elsewhere in the government makes getting a visa such a protracted hassle that a lot of people either don’t bother or give up.
 
Trying to work out the best way to get your visa isn’t easy because the rules seem to change without warning or explanation. Sometimes this change results from actions on a bigger political stage. If, for example, your nation has diplomatic trouble with Iran, as happened with Canada following the death in a Tehran prison of Iranian-Canadian journalist Zahra Kazemi in 2003, then getting your visa will become that much harder. Canadians have been struggling to get visas ever since.
 
At the time of writing it was actually harder to get a visa than it has been for several years. When we visited in 2003 and 2005 it was simply a matter of applying to the embassy, paying the money and waiting (admittedly, several weeks) for the visa – we were even granted 45 days in 2005. But by 2007 the embassy told us to not even bother submitting the forms unless we had a ‘sponsor’. This requirement for an Iranian sponsor has become almost universal in the past couple of years. Fortunately, it’s not as big an obstacle as it sounds. For most people, their ‘sponsor’ will be a visa agency or travel agency. The good news is that using an agency should (this is not guaranteed) make the process faster and simpler – for us, we had the visa in our passport nine days after contacting the agency.
 
So before you shut the book and start planning a holiday to Turkey instead, take comfort in the knowledge that most people do eventually get a visa, usually for 30 days (which can then easily be extended). And once they’ve been to Iran, almost everyone thinks the hassle was worth it.
 
Applications for visas
Turkish passport holders can get a three-month tourist visa on arrival. Everyone else will need to pay and apply well ahead of departure; to be safe that means at least a month but usually longer. Israelis (and anyone with an Israeli stamp in their passport) are not allowed in under any circumstances. Contrary to popular misconception, US citizens are welcome, but need to be on a tour (an organised group or private guide) or be prepared to badger the Iranian-interests section in Washington for many months.
 
Process
All visa applicants must be ‘approved’ by the Ministry of Foreign Affairs in Tehran. At the time of writing the official approval times were about five to seven working days, unless you’re using a British, Canadian or Danish passport (10 to 15 days) or a US passport (45 days!). If you’re approved, the MFA sends an approval number to the relevant embassy by telex, which can take a couple of days (why not by email? We don’t know either). When the relevant embassy or consulate has this number, take or send your passport in, with the fully completed paperwork, photos and fee, and (if you are using an agency) a note with your approval number. The visa should then be issued in a day or two.
 
Don’t be put off if you’re refused a visa the first time you apply. Although it won’t help future applications, some travellers have been successful at a second attempt even at the same consulate, notably by using a different agency.
 
Note that all applications stall when the MFA in Tehran closes for holidays. That includes two full weeks between about 21 March and 3 April for No Ruz.
 
Once visas are issued you must enter Iran within 90 days. If you’re on a long trip this can be a hassle, so we recommend contacting an agency about two months before you want to enter Iran, nominate an embassy/consulate nearer to Iran (in Turkey, Azerbaijan or Pakistan, for example), and get your approval number sent to that embassy.
 
Getting the paperwork right
However you choose to apply, you’ll need to supply full personal details, copies/scans of your passport, an outline of your itinerary and photographs. For women, you’ll probably need to have your hair covered (any scarf will do) in the photo. Some embassies/consulates even require you to be covered when going to collect your visa.
 
While we don’t advocate lying on your application form, don’t complicate matters unnecessarily by claiming you’re something unloved like a journalist or, according to one woman we heard from, anything to do with fashion (very dangerous!). It’s better just to say you’re a teacher, student or nurse. Having said that, be aware that the MFA might Google your name and we heard of one woman whose application was rejected when the authorities recognised her photo on her website and the stories didn’t gel. If you have a website, consider taking it or your picture down during the application process.
 
Similarly, keep controversial places like Bushehr and Natanz off your itinerary. Whatever you have written on the application, you’ll be able to go anywhere in Iran with the tourist visa once it’s issued.
 
Sponsors
If you know someone in Iran they can sponsor your application, but it’s much easier to use an agency that is used to dealing with the MFA, and indeed often has close relationships with people within the ministry. Usually agencies are worth the money.
 
Visa agencies
Sponsors & Visa Agencies
 
Any Iranian can sponsor your application, which in effect means they submit the paperwork for an authorisation code. But in most cases it’s easier to use a travel agency or a specialist visa agency. Keep in mind, though, that even with an agency there are no guarantees, and the visa agent will still take their fee regardless of whether a visa is issued or not. Seek up-to-date recommendations from other travellers before you choose one - Lonely Planet's Thorn Tree forum is a good place to start.
 
Where to apply
Iran would prefer you to apply in your home country, but if you’re using an agency this isn’t necessary. If you don’t use an agency, you’ll have to deal with the peculiarities of individual Iranian missions. Check Lonely Planet’s Thorn Tree forum (www.lonelyplanet.com/thorntree) for recent feedback from travellers.
 
The best embassies hand out one-month tourist visas in a week or two (if you’ve got the right passport). The worst (like Delhi in India) will only issue transit visas to non-Indians, and then only after you’ve waited weeks.
 
Costs
Visa costs vary from place to place. Most Iranian embassies in Europe have websites detailing costs and what you need to supply. For example, in their home countries in December 2007 Brits were being charged UK₤61/68 for a transit/single-entry tourist visa, Canadians C$47/70 (insh’Allah), and Germans, French, Dutch and Swedes €40/60. Iranianvisa.com has an incomplete list of visa fees.
 
Visa extensions
What if you overstay? Don’t. You’ll be fined IR300, 000 for each day you overstay, and you could be stuck for up to a week sorting out paperwork.
 
Business visas
Business visas can be harder to get than tourist visas. To get a two-week or one-month (extendable) business visa you must have a business contact in Iran who can sponsor your visit through the MFA in Tehran.
 
Transit visas
A five-day transit visa is really a last resort. Transit visas cost almost as much as tourist visas and while in theory processing could be quick, in reality it often takes two or three weeks. One advantage is that you don’t need an agency-sponsor but you might need a letter of recommendation from your embassy, which might actually cost more. The main disadvantage? Iran is a big country, five days is a very short time and Iran does not extend transit visas.
 
Visas on arrival
Iran introduced the visa-on-arrival in 2005, designed mainly for business people. In theory, you can fly into Tehran, Esfahan, Shiraz, Mashhad or Tabriz and be issued a seven-day visa at the airport. In practice, this service is unreliable, at best. Indeed, we have heard of people being unceremoniously turned around and sent back to whence they came even though they met all the requirements. And citizens of several countries – including the UK, US, Australia and Ireland – cannot get this type of visa under any circumstances. All up, these are only good for desperate last resorts.

Business Etiquette

Relationships & Communication 

. Iranians prefer to do business with those they know and respect, therefore they expect to spend time cultivating a personal relationship before business is conducted. 
. Who you know is often more important than what you know, so it is important to network and cultivate a number of contacts. 
. Expect to be offered tea whenever you meet someone, as this demonstrates hospitality. 
. Since Iranians judge people on appearances, dress appropriately and stay in a high standard hotel. 


Business Meeting Etiquette

. Appointments are necessary and should be made 4 to 6 weeks in advance. 
. Confirm the meeting one week in advance and when you arrive in the country.
.  It is a good idea to avoid scheduling meetings during Ramazan (Ramadan) as the need to fast would preclude your business colleagues from offering you hospitality. 
. Arrive at meetings on time, since punctuality is seen as a virtue. 
. The first meeting with an Iranian company is generally not business-focused. Expect your colleagues to spend time getting to know you as a person over tea and snacks. 
. Be patient - meetings are frequently interrupted. 
. Written materials should be available in both Farsi and English. 
. Do not remove your suit jacket without permission. 
. Do not look at your watch or try to rush the meeting. If you appear fixated on the amount of time the meeting is taking, you will not be trusted. 


Business Negotiating

. It takes time for Iranians to become warm towards foreign businesspeople. Until then, they may appear somewhat stiff and formal. 
. Personal relationships form the basis of business dealings. 
. Decisions are made slowly. 
. Iranians are deliberate negotiators who can drive a hard bargain.
. Do not use high-pressure tactics. They will work against you.
. Iranians may display emotion, or even walk out of the meeting, or threaten to terminate the relationship in an attempt to convince you to change your position. 
. Iranians often use time as a negotiating tactic, especially if they know that you have a deadline. Be cautious about letting your business colleagues know that you are under time pressure. 
. Companies are hierarchical. Decisions are made at the top of the company, either by one person or a small council. 


Dress Etiquette

. Business attire is formal and conservative. 
. Men should wear dark coloured conservative business suits. 
. Ties are not worn by Iranians but it would not be seen as negative if you did so. 
. Dress well to make a good impression.  
. Women should always dress modestly and cover their hair.


Titles 

. Address your Iranian business associates by their title and their surname. 
. The title "doktor" is used for both M.D.s and Ph.D.s. Engineers are called "mohandis". These titles are are preceded by the formal titles listed below and are used with the surname. 
. The title "agha" (sir) is used when addressing men. It may be used before or after the first name. The phrase "agha-yeh" is put before a surname. 
. The title "khanoom" (madam) is used when addressing women. It may be used before or after the first name. The phrase "khanom-eh" is used before the surname. 
. Wait to be invited before moving to first names. Only close friends and family use this informal form of address. 


Business Cards

. Business cards are only exchanged by senior-level people. 

. Since rank and position are very important, make sure your business card includes your title. 
. Have one side of your card translated into Farsi. 
. Present your card so the Farsi side faces the recipient. 

General Business Hours

Opening and closing times can be erratic, but you can rely on most businesses closing Thursday afternoons and Friday (the Iranian weekend). During summer, many businesses close during the hot afternoons, from about noon until about 4pm; along the blistering Persian Gulf coast, doors stay shut until about 5pm. The most likely time to find anything open is between 9am and noon, daily except Friday. In this book hours will accord (more or less) with the following list unless stated otherwise.

 

Airline offices Open 9am to 4pm, Saturday to Wednesday, and Thursday mornings.

 

Banks Open 7.30am to 1.30pm Saturday to Wednesday, 7.30am to 12.30pm Thursday.

 

Government offices Open offices 8am to 2pm Saturday to Wednesday, 8am to noon Thursday.

 

Museums Tend to open 8.30am to 6pm summer, 4pm or 5pm winter, with one day off, usually Monday or Tuesday.

 

Post offices Generally 7.30am to 3pm Saturday to Thursday, some main offices open later.

 

Private businesses Conduct business 8am or 9am to 5pm or 6pm Saturday to Wednesday, until noon Thursday.

 

Restaurants Offer lunch noon to 3pm, dinner 6pm or 7pm to 11pm, or whenever the last diner leaves.

 

Telephone offices Operate 8am to 8pm or 9pm; earlier in small towns.

 

Travel agencies Generally 7.30am to 5pm or 6pm Saturday to Thursday, 7.30am to noon Friday.