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COMPANY
LAW
REGISTRATION
OF FOREIGN COMPANIES FOR INITIATING COMMERCIAL ACTIVITIES IN IRAN
The
Registration of Companies Act lays down rules for economic operations
of foreign companies acting in Iran through representatives and
branch offices. The economic activities of foreign nationals has
been foreseen in Iranian commercial law, and the Law Concerning
the Attraction and Protection of Foreign Investment has specified
the conditions for manufacturing and commercial cooperation of foreign
companies and establishments in Iran.
Today,
all foreign enterprises which have concluded agreements with Iranian
government agencies, are allowed to register and open branch and
representative offices in the Islamic Republic of Iran.
According
to Articles 3 and 4 of the Registration of Companies Act, approved
in 1931, any foreign company that wants to carry out commercial,
industrial or financial activities in Iran through a branch office
or a representative, must first have already been recognized in
its country of origin as a legal entity and then it should be duly
registered in Iran.
The
Council of Ministers has also decreed that the purchase of machinery,
equipment and services from foreign companies is permitted on the
condition that they have their own registered representative office
in Iran.
Registration
is accomplished at the Office for Registration of Companies (Edareh
Sabte Sherkatha), situated in the capital city of Tehran.
As a consequence of non-registration, in accordance
with Article 5 of the Registration of Companies Act, any person
engaged in industrial, commercial or financial affairs in Iran,
as a representative or a branch manager on
behalf of foreign companies, and not applied for registration, shall
be liable to the punishment of a fine. If this violation of law
continues, then the government shall prevent the activities of the
representative or branch manager.
Changes
in the relative position of the foreign company representatives
or branch managers must be registered and published in the Official
Gazette. If such changes are not duly recorded, all acts performed
by the former representative or manager in the name of the company
shall be considered as the responsibility of the company. Alterations
in the foreign company's name, type, address, nationality, and capital
must also be registered at the Office for Registration of Companies.
For
registration of branch, representative and liaison offices, the
following items are necessary:
1-
A letter of certification issued by the relevant ministry, department,
or state-run organization indicating that an agreement has been
concluded with the foreign company, and that they work together.
2-
Completed form of declaration of registration.
3-
A certified copy of the articles of association of the company.
4-
A certified copy of the power of attorney of the company's chief
representative in Iran.
5-
A letter of proxy given to an Iranian attorney at law, in the event
that he is delegated to carry out the registration procedures.
The
declaration or registration for the branch or representative office
of a foreign company must be rendered in the Farsi language and
the relative form should be completed and signed by the chief representative
of the foreign company or the designated attorney at law.
All
other documents needed for registering the branch or representative
office of a foreign company, should also be in the Farsi language
or, otherwise, a Farsi translation must be certified and attached
to the original. Copies of the originals should be duly legalized
by the nearest Iranian consulate.
If
in addition to the chief representative or branch managers, the
foreign company has other representatives authorized to sign on
behalf of the company. their name must also be registered. It shall
not be obligatory to register names of junior employees of
the foreign company such as accountants, attorneys
and the like. Opening of new branches or appointment of a new representative
should equally be registered.
According
to the stipulations of Iranian Commercial Law, branch managers and
representatives are commercial deputies, who have been assigned
by the mother company to conduct business on behalf of the company.
Their signatures are considered binding on the company.
In accordance with Article 23 of the Regulations
on Registration of the Companies, the term "representative" as mentioned
in the Registration of Companies Act, is applicable to such individuals
who have been granted sufficient authority by a foreign company
and whose obligations are considered as the
obligations of the company.
The
registration fee for foreign branch and representative offices shall
be calculated on the basis of the tariff laid down in Article 10
of the Registration of Companies Act.
Upon
registration, the branch of representative office of the foreign
company shall be subject to Iranian laws in areas such as labor,
social security, taxation, etc. The government protects the legal
rights of a registered branch or representative office
in exactly the manner as it does in the case
of Iranian companies and establishments.
In
accordance with Article 105 of the Law of Direct Taxation, foreign
legal entities must pay taxes on all taxable income earned through
investment in Iran or from direct or indirect (agents, branches,
etc.) activities.
Since
the taxable corporate income is assessed by inspecting the statutory
account books, representatives and branches of foreign companies
are obliged to maintain such books. Submission of tax declarations
and payment of taxes of the entities whose central office is located
outside Iran, must be carried out by their agents and representatives
in Iran.
Branches
and representatives of foreign companies which have been registered
in Iran, and by virtue of their articles of association are not
authorized to engage in profitable activities but can do marketing
and collect economic information, are not
liable to any taxation on the sums received
from the mother company in the form of revolving funds.
However,
if it is proven that the said branches and representatives are engaged
in profitable activities in Iran and are acquiring an income therefrom,
the sums earned shall be subject to taxation.
CRITERIA
CONCERNING THE REGISTRATION OF CANPANIES,AND INDUSTRIAL INTELLECTUAL
OWNERSHIP IN FREE TRADE-INDUSTRIAL ZONE OF I.R. IRAN
Article
1
In this decree the following terms are utilized
against their pertinent detail expressions:
Country:
Islamic Republic of Iran
Zone:
Each one of the Free trade-Industrial Zones
Organization:
Each Organization of Free Trade-Industrial
Zones established in accordance with law
Law:
Law on Administration of Free Trade-Industrial Zones of I.R.Iran
Registry
Office: Authority in charge of registration
of companies/industrial and intellectual ownership's in each organization
of Free Trade-industrial Zones.
Branch
of company or institute: Branch of
a company or institute, is the legal person which is set up in the
Zone by the principal company or institute located outside of the
Zone, The majority of its shares belong to that of principal company
or institute and this legal newly established person in the Zone
is the subsidiary company or institute of that principal one.
Representative
of company or institute: Representative
of a company or institute to whom necessary authorization is vested
and its liabilities in the Position of representative of company
or institute shall be deemed as the liabilities of the authorizing
company or institute.
Article
2
In order to perform the functions pertaining
to registration of companies and industrial and intellectual ownership's,
the organization of each zone shall set up a unit named as "Companies,
and Industrial and Intellectual ownership Registry office" in that
zone.
Article
3
- The
functions of the registry office are as follows:
- Registration
of Iranian and Foreign companies and institutes.
- Registration
of trade marks and trade and industrial names.
- Registration
of inventions, patents monograms and industrial drawings.
- Registration
of traders' commercial books.
- Plumbing
of commercial and non-commercial books in the territory of each
Zone.
- Registration
of banks and credit institutes with regards to the Regulations
on Monetary and Banking Operations in the Free Zones.
Registration
of insurance companies in accordance with the governing regulations
in the Free Zones.
Article
4
Each company or institution registered in
the Zone, whose principal center is in the same Zone, shall be deemed
as Iranian and registered in the Zone.
Note
1
From the date of enforcement of this decree,
any foreign company or institution willing to carry out economic
activities through its branch or representative in the Zone, must
have been registered in accordance with the current laws and regulations
of its own sovereign state, attested by the legation of Islamic
Republic of Iran and registered also in the Zone's Registry Office.
Note
2
Any foreign company or institution which,
from the date of enforcement of this decree, is engaged in economic
activity through its branch or representative in the Zone, it has
to be registered within three months from the enforcing date of
this decree otherwise such a company has no legal status and its
founders are jointly responsible for probable indemnities.
Article
5
All kinds of companies and non-commercial
institution mentioned in the Commercial Law and other Iranian Laws
may be registered in the Zone's registry Office. Provided that the
subject of their activity is legal. Establishment and activity of
companies in accordance with enacted laws, in any case, is possible.
Article
6
All legal persons having economic activities
in the Zone are to adjust their status with the provisions of this
decree and its pertinent executive instructions thereto, within
three months of proclamation made by the Registry Office.The executive
instruction of this Article shall be written and implemented by
of each Zone authority.
Note
The
State Title Deeds and Real Estate Registration Organization shall,
upon the request of the Zone's Registry Office, send to the said
Office, all the documents and files pertaining to the legal persons
who have been, prior to the establishment of the Zone's Registry
Office, registered in other places of the country and whose principal
center (domicile), according to their charter is in the Zone and
have obtained license for their activities in the Zone.The state
Title Deeds and Real Estates Registration Organization shall also
cooperate with the Zone's Registry Office to prevent and avoid determining
similar names for the companies who are in the process of the registration.
Article
7
Registration of company or institution in
the Zone shall be made upon submission of the following documents:
- Letter
of declaration applying for registration
- Company's
article of association
- Minutes
of the founders' general assembly
- Minutes
of the first cession of the board of directors
- Certificate
issued from one of the banks located in the Zone attesting that
a minimum of %35 of cash capital has been paid.
- License
of the activity issued by the Organization.
Note
1
In
case of the foreign legal persons, it is necessary to provide and
submit the original letter of authorization indicating representation
and the license of the establishment of those legal persons.
Issuance of such documents must be in accordance
with those laws and regulations of legal persons' sovereign state
(and attested by representative of Islamic Republic of Iran in that
country).
In order to register a branch or a representation
in Iran, the foreign legal persons, are to attach the Farsi translation
of the companies' registry declaration forms, and attested copy
of the documents indicating the registration of company in their
own sovereign country.
Note
2
All documents subject of the article 8 of
this decree are also to be submitted, by foreign legal persons,
in officially translated Farsi version.
Note
3
In all cases, steps shall be taken for registration,
once the pertinent fees are received.
Article
8
letter of declaration pertaining to registry
of branches or representations of foreign legal persons in addition
to the date and signature, contain the following points:
- Full
name of company or institution in Farsi language with its probable
acronyms, and specifications.
- Type
of company or institution and its activities
- The
main office and domicile of company or institution abroad.
- Nationality
of the company or institution.
- The
amount of capital of the company or institution.
- The
last balance sheet of the company or institution.
- Registering
authority, postal code (country and city) and registering date
of company or institution abroad.
- The
envisaged activity of company or institution to be performed in
the Zone.
- The
other branches or representatives of company or institution in
Iran and names of their directors (if any).
- The
domicile of company or institution in the mainland of Iran and
the Zone and introduction of competent authorities who are responsible
to receive the summons and communiqués.
- Affidavit
signed by director or directors of branches or representations,
on permits or authorization letters subject to Note (1) Article
(7) of present decree, indicating they have accepted the assigned
position.
- Names,
surnames and domicile of the directors or administers of company
or institution.
Note
Name, surname, domicile and nationality of the
proxy and also the original and a copy of attested letter of proxy,
in case, the letter of declaration and application for registry is
to be submitted by the proxy.
Article
9
The legal persons shall have legal personality
once they are registered and may have activity in the Zone in accordance
with the governing laws and regulations. The Registry Office of
the Zone Organizations is bound to submit to applicants a certificate,
sealed by Registry Office, indicating the registration of the legal
persons or their branch or a representative.
Article
10
Legal persons are required to declare in writing
to the Registry Office any changes in their charter, composition
of the board of directors, inspectors, authorized signatories, and
increase or decrease in capital and liquidation, within one week.Lack
of timely declaration shall not obviate the responsibilities of
the director of the legal persons.
Article
11
Any party having interest may get information
from the contents of the Registry office files, and obtain attested
copies upon request.
Article
12
The registry Office is required to declare
the establishment of a company or institution and the alterations
on its status within 10 days following the date of registration
in order to be publicized in the Official Gazette of the Islamic
Republic of Iran and local newspaper. Such proclamation shall be
financed by the applicants.
Article
13
Application for registering of trade marks
and trade-industrial names and registering of inventions, designs,
and industrial drawings in the Zone shall be made upon submission
of a letter of declaration. The requests for registration at the
Registry Office shall be in compliance with the executive directions
adopted by each Zone authority.
Article
14
All the Iranian natural who, under the Commercial
Law do business in the Zone, are bound to register their names or
their managers' names in the commercial register of the Registry
Office within three months of proclamation made by the Registry
Office.
Article
15
Registration of the Iranian and foreign nationals
persons in the registers which shall be made upon submission of
three copies of filled in declaration form, and within three months
from proclamation of Registry Office, shall contain the following
points:
- Name
and surname of trader.
- Date
and place of birth, identity certificate number and its place
of issuance, and the photocopy of the pages of identity certificate
in case of the Iranian national and photo-copy of the pages of
passport in case of foreign nationals.
- Original
and present nationality of the individuals, if any new nationality
has been obtained besides the date and the manner of obtaining
the new nationality.
- Date
of entry into the Zone, number and place of issuance of residence
permit, and place of residence.
- Legal
residence of natural persons.
- Registering
and sealing (Plumb) number of commercial books provided in accordance
with the provisions of paragraph (5) of the Article No. 3 of the
present decree.
- Type
of activity in Iran and abroad separately or in both cases.
- Other
trading specifications of traders inter alia the registry number,
trade marks, commercial codification books, etc.
Article
16
The Registry Office is required, after registering
within 10 days, the contents mentioned in the letter of declaration,
to submit a signed and sealed copy of letter of declaration to the
applicant and send another copy to the pertinent office in the Zone's
organization.
Article
17
Applicants for registration are bound, when
any new alteration occurs, to provide new letter of declaration
in three copies and submit it to the Zone authority's Registry Office.
Article
18
The natural and legal persons who, in accordance
with the provisions of this decree, register their names, are bound
to mention their registration number as well as their commercial
title on the papers, invoices, order forms and any other kind of
documents they utilize.
Article
19
The commercial books of the natural and legal
persons shall be sealed (plumbed) in accordance with the manner
determined by the organization of each Zone and shall be stamped
once the representative of the Registry Office has signed them.
Article
20
Expenses pertaining to the registration of
company, institution and the alterations thereafter, and registration
of trade marks, commercial and industrial titles and brands, inventions
and designs and drawings, also registration of commercial books
and sealing (plumbing) of commercial and non-commercial books shall
be collected in accordance with the directions provided by each
of the Zone authorities.
Article
21
Upon the request of the Zone authority the
activities of those who violate the provisions of this decree shall
be prevented by the disciplinary forces. Such deeds shall not eliminate
the responsibilities of the directors of company or institution
or natural persons against the third parties.
Article
22
Directions pertaining to this decree and related
printed forms shall be provided and put to effect by the authority
of each Zone within one month from the approval of the present decree.
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