Iran to exempt foreign investors from taxes

Bloomberg

By Ladane Nasseri

Iran will try to lure foreign investors with tax exemptions ranging as high as 100 percent, Iranian Deputy Economy Minister Behrouz Alishiri said.

Foreigners investing in the country’s agriculture sector won’t have to pay any taxes, and investments in industry and mining will be exempt up to 80 percent, Alishiri said yesterday, according to Tehran-based newspaper Tehran Times. He didn’t forecast how much investment the exemptions would spur.

While international sanctions have restricted foreign investment, Interior Minister Mostafa Mohammad-Najjar said in March that Iran attracted $7 billion from abroad in the Iranian year ended March 20, compared with $5 billion the preceding year. He didn’t identify the donors or their projects, and the newspaper did not say what sort of tax breaks foreign investors currently enjoy.

Iran needs annual domestic and foreign investment of about $300 billion until 2015 to meet its economic objectives, Alishiri said in a separate Mehr news agency report last week.

International sanctions against Iran over its nuclear program have limited foreign companies’ involvement in Iranian business, weakened the country’s currency and contributed to inflation that reached 34 percent in May. The economy will shrink 1.3 percent in 2013, the International Monetary Fund predicts.

Iran denies Western powers’ claims that its nuclear program is aimed at developing weapons, and seeks to downplay the sanctions’ effect.