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Frequently Asked Questions

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General Questions

Frequently Asked Questions

1. What is a free zone and what are the purposes of establishing it?

Free Zone is part of the mainland that is completely enclosed, does not follow customs laws of the country and is established for the purpose of exports development, employment creation and public revenue increase.

2. What activities can be performed in Arvand Free Zone?

The Free Zone has three sections of commercial, industrial and tourism activities and any economic activities that are technically, financially and economically justified can be performed.

3. What are the infrastructures for industrial activities in Arvand Free Zone?

The industrial area of Arvand Free Zone has an area of 8600 hectares in which an area of 4,000 hectares is completely enclosed and the Islamic Republic of Iran’s customs is located at the entrance gate. In the entire industrial area, water, electricity, sewage and telecommunication infrastructure are available.

4. Are there companies currently operating in the industrial site?

According to the description of the industrial zone which includes the industrial towns of Abadan and Khorramshahr, as well as the former special economic zone of Khuzestan, currently has more than 100 active industrial units in operation.

5. How can I create industrial activity in the region?

You can take the following steps for industrial activities:
• Presenting summary of the plan to the management of industry
• Get initial approval and company registration
• Completion of the technical, financial and economic justification, and obtaining establishment license
• Introduction of land assignment
• Start and complete construction activities
• Receive exploitation license

6. Are commercial infrastructures available in the region?

Ports of Khorramshahr and Abadan, Abadan, Khorramshahr and Shalamcheh border crossing located 25 km away from Basra Province, are located in Arvand free zone which has created good location for business activities.

7. Are there specific facilities for commercial activities in Arvand Free Zone?

For the purpose of goods transit to Iraq, Khorramshahr Port Authority has considered special facilities in the field of loading, unloading and port fees, which will cover up to 50% of the costs.

8. Is it necessary to register a company for the export or transit of goods to Iraq from Arvand free zone?

No, there is no need to register a company in Arvand Free Zone for export or transit of goods to Iraq.

9. How to benefit from tax exemption for service activities?

To apply for your tax exemption, you must meet the following conditions:
• Must be in Arvand Free Zone
• The scope of the contract subject must be in Arvand Free Zone
• Valid exploitation license from Arvand Free Zone
• Submit tax return form to the respective tax administration on the given deadline.

10. What documents are needed to register a particular joint stock company?

1) Economic activity license issued by the Economic and Investment Deputy of the Organization
2) Company assertion (two copies)
3) Minutes of the General Assembly of Founders (two copies)
4) Minutes of the board meeting (two copies)
5) Specialist joint stock company statute (two copies)
6) National card, identification card and the military serving completion card of the founders and inspectors
7) Bank certifying that the company has paid the initial capital
8) Confirmation of registration payment to the organization account

11. What are the documents required to register a limited liability company?

1) Economic activity license issued by the Economic and Investment Deputy of the Organization
2) Articles of association (two copies)
3) Company assertion (two copies)
4) Minutes of the General Assembly of Founders (two copies)
5) Statute of Limited Liability Company (two copies)
6) National card, identification card and the military serving completion card of the founders and inspectors
7) Confirmation of registration payment to the account of the organization

12. What are the differences and similarities between Private Joint Stock Company and Limited Liability Company?

– At Limited Liability Company, the number of shareholders are at least 2, and in the Private Joint-Stock Company the number of shareholders are 3.
– Minimum capital for registration of a limited liability company and a special joint stock company is one million Rials.
At least 35% of the capital must be credited to one of the bank branches and provide the relevant certificate in which 65% must be in the shareholder’s commitment. At the limited liability company, the total capital must be paid by the CEO and the CEO acknowledges receipt of a bank certificate. Indispensable for doing so.
– Selection of the main inspector and substitute inspector is compulsory in the special joint-stock company, but it is optional in the limited liability company.
– The duration of management in a joint-stock company is for a maximum of two years, which is renewable, in limited liability Company management duration is indefinite and are responsible to set a management duration in the company statute.
– The selection of a highly circulated newspaper in private joint stock company is mandatory for the company’s invitation notice and is optional in Limited Liability Company.
– The conditions for obtaining quotas in general assemblies are easier for a joint-stock company and more difficult in a limited company with regard to the type of company.
– General Assemblies are held by Board of Directors consisting of one chairman and two supervisors and one secretary elected among the shareholders. In the company with limited liability, the General Board of the company will be represented by the Supervisory Board whose number of partners is more than 12 people.
– In a Private Joint Stock Company and limited liability company, it is voluntary to increase capital.
– Capital in a private joint-stock company is share division and the liability of shareholders is limited to the nominal value of their shares. Capital in a limited liability company is not divided into stocks or shares, and partners are only liable for their capital in the company.
– Managers in a private joint stock company must necessarily hold a share or provide the number of bonds required by the articles of association to be deposited with the fund. The managers of the limited liability company, which are chosen from shareholders or from outside the company, will perform the duties.
– In special joint-stock company profits are divided based on the number of shares and in Limited Liability Company is divided base on the capital of the shareholders.
In the Limited Liability Company arrangements for the distribution of profits can be appointed in the Company Statute.
– The right to vote in the private joint-stock company is based on the amount of shares and in the limited liability company will be in proportion to the capital.
– Non-cash contributory calendar is held by partners in a limited liability company and partners are liable in this regard. A non-cash payment calendar will be available for the joint-stock company by the official justice officer.

13. In a private joint-stock company, can the CEO be the same as the chairman of the same board of directors?

– In accordance with Article 124 of the Commercial Law, if the approved votes are three-quarters of the presented votes cast at the Board meeting, CEO can be the chairman of the board at the same time.

14. Can one person be the CEO of two or more companies at the same time?

– According to Article 126 of the Commercial law, one person cannot be the managing director of two or more companies at the same time.

15. Are foreign citizens allowed to register company in free zones?

– Company Registration is allowed by foreign nationals with any share.

16. Is it necessary to provide company address within the area of Free Zone?

– The presentation of company address or its branch in Arvand Free Zone is obligatory. If the company address or branch is out of the zone, company registration is not possible and an exploitation license will not be issued which is a condition of tax exemption.

17. Which companies can be registered in the Free Zone?

– All types of non-commercial companies and institutions and their branches as described in the Commercial law and other laws in Iran can be registered at the Company Registration Office of the Free Zone, provided that their subject-matter is legal. In any case, establishment and activities of companies under the applicable laws are possible.

18. Required documents to register a foreign company branch?

– Two copies of assertion letter of the foreign company or branch registration completed in Farsi and signed by the representative or the attorney of the company.
– The authority of the representative of the company in Iran, the legality and credibility of which has been approved by the representative of the Islamic Republic of Iran, and if the authority is in a foreign language, in addition to the approved originals, its official Farsi translation shall also be attached.
– A certified copy of the registration document in the original country, which has been approved by the Islamic Republic of Iran and has been translated into the official language.
– A certified copy of the company’s article of association approved by the Islamic Republic of Iran’s diplomatic delegation in the country and translated in Farsi.
– A copy of the representation contract between the main company and company representatives translated in Farsi.
– Receiving a license for economic activity issued by the Economic and Investment Deputy of the Organization.
– An image of the front page of the birth certificate or passport pages of the authorized representatives of the company.
– Original or a certified copy of Power of Attorney if the statement was completed by the company’s attorney.
– Provide confirmation of payment of registration fees.

19. What is the cost of registering a company or branch in Arvand Free Zone?

– Registration fee of company or branch registration in the Free Zone is 1,000,000 IR Rials.

20. Required documents to register a company branch?

– Notice of the official newspaper of the country on the establishment of the company’s branch in Arvand Free Zone.
– A commercial activity license issued by the Investment department of the organization.
– Provide confirmation of registration payment
– An attested copy of company documents including the statute, declaration or letter of credit, the notice of the original company and the notice of the latest changes of the board of directors.

21. Required documents to register an institute in the Free Zone?

– Two copies of applications for registration of non-commercial enterprises
– Two copies of the statute
– Two copies of the minutes of the general assembly of the founders
– A copy of the first page of the birth certificate and national card of founders
– Provide activity license from the organization
– Provide confirmation of payment of registration fees

22. Required documents for sealing commercial books?

– A daybook and general book
– Two copies of assertion letter for sealing commercial books
– A copy of the company advert in official newspaper
– A power of attorney or letter of intent for the representative if the lawyer or representative is appointed for sealing books.
– An image of the birth certificate and National ID card of the attorney or representative

23. Required documents for the registration of commercial card assertion?

– Three copies of the registration assertion in the commercial office which is completed and signed by the investor.
– Economic activity permit issued by the Economic and Investment Deputy of the Organization
– A copy of the investor’s identity card or passport for foreign nationals
– Sealed commercial books including daybook and general book
– Provide confirmation of registration payment

24. Which areas does Arvand free zone include?

– It includes cities of Abadan, Khorramshahr and Mino Shahr

25. If an employer is within the scope of Arvand Free Zone but his activity is outside the scope of the zone, would he/she benefits from tax exemption?

– No.

26. Is tax exemption also subject to value added tax?

To apply for VAT exemption, the following must be observed:
• The contractor is registered within Arvand free zone
• The employer is registered within Arvand free zone
• Activities should be within the area of Arvand Free Zone

27. What documents are required to obtain an exploitation permit to operate in Arvand Free Zone?

– The following documents are required to obtain exploitation permit:
• Declaring readiness of the company to obtain the license to operate
• Introducing a fully authorized representative to get the license
• Completion of the application form to apply for exploitation permit
• Setting up an office in the area of Arvand Free Zone
• Provide a valid ownership or lease document
• A copy of all ongoing labor contracts
• Installing a suitable sign board that can be seen easily.
• Presentation of photos from the sign board, outside and inside the office
• Providing an insurance list of employees working in the company
• A copy of the company’s Articles of Association, including a copy of official newspaper, in which the company’s latest changes are included (for the first time)
• Presentation of the performance report and financial statements approved by the audit firm (for renewal of the license)
• Confirmation of payment of operating costs
• Expert’s visits report

28. What activities are tax-exempt in the Free Zone?

– Any economic activity in the Free Zone that is licensed for exploitation is exempt from tax on the subject of the direct tax law from the date stated in the license for 20 years.

Commercial Questions

Frequently Asked Questions

1. How to start commercial activities in Arvand Free Zone?

1) Completing the application form for commercial activity license.
2) Provide financial statement (last 6 months).
3) Introducing to company registration office for company registration.
4) Requesting a license to operate by the registered company.
5) Review of the commercial expert and calculate the amount of complications by the commission of complications.
6) Obtaining exploitation permit.

2. Required documents for activity registration?

1) Complete the commercial permit application.
2) The last six months statement.

3. What are meant by business and commercial exploitation permits?

• Activity permit: Investigating the status of the applicant (investor) financially and introducing them to the company registration (the license is issued for three months).
• Exploitation permit: A permit is issued after the registration of the company and the applicant’s request. The company with exploitation license is exempt from paying taxes (provided that its activity is within the free zone).
• Investor: Based on Article 13 of the Law on the Management of Free Trade-Industrial Zone, all real and legal persons who are engaged in economic activity in the region, in relation to any economic activity in the Free Zone, from the date of exploitation specified in the permit For 20 years, income tax and property tax will be exempted from the direct tax law and will expire after twenty years of tax compliance, which will be approved by the Islamic Consultative Assembly on the proposal of the Cabinet of Ministers.

4. What documents do I need to obtain permission to work in Arvand free zone?

1) Complete the business permit application.
2) The last six months bank statement.

What documents do I need to obtain an exploitation permit?

1) Company registration introduction letter.
2) Introduction letter of the Managing Director, a fully authorized representative or the Attorney (with the presentation of a Power of Attorney).
3) Completion of application for the issuance of exploitation permit.
4) Provide the last 6 month bank statement.
5) Provide tenancy or lease document.
6) The installation of the sign board which is visible to all easily.
7) Presenting a picture of the sign board, showing outside and inside of the office.
8) Providing a copy of the company’s Articles of Association, including a copy of official journal in which the company’s latest changes are included.
9) Providing the latest insurance list of personnel and employees (approved by the Social Security Organization).
10) Licensing of Ports and Maritime Organization is required for unloading and loading companies.
11) It is imperative for the Oil Company to provide safety permits from the refining and distributing oil products company.
12. For international shipping companies, the provision of permit from the terminal organization is required.

5. Is there a need for a permit to start an operation?

Acquiring exploitation permit for the commencement of commercial activity and for tax exemption and property is required.

6. Is the exploitation license holder subject to tax exemption?

Yes, if activity is within the Free Zone.

7. Can company office be outside the zone?

No.

8. What documents do I need to obtain a commercial card?

Commercial Card (real person)
• Completion of the application form for the authorization of the commercial activity by the applicant, review and approval by the commercial management.
• Introducing the applicant to the management of legal affairs and contracts (company’s registration) for the business registration process.
• Provide a written request for the issuance of commercial card and documents required for registering an office in the Free Zone (commercial books sealing assertion and registration assertion in commercial offices).
• Documentation is reviewed by a business expert and approved by the Commercial Director.
• Introducing the applicant to Abadan or Khorramshahr Chamber of Commerce to issue a commercial card.
• Issuance of commercial card by the Chamber of Commerce and referral to Arvand Free Zone Organization.
• Confirmation of Managing Director of Arvand Free Zone Organization.
• Delivery of commercial card to the applicant.
• Steps 1 and 2 are not required to renew the commercial card.
Issuing Commercial Card (Legal person)
• A written request for the issuance of commercial card with letterhead and seal of the company to the commercial department of the organization.
• Providing company documents (including: statutes, announcements, last modified advertisements, personal documents of the CEO and commercial exploitation licenses).
• Document review by an expert on the issuance of commercial licenses and approval of commercial management.
• Written letter introducing the CEO to the Chamber of Commerce for the issuance of commercial card.
• Referral of the card issued by the Chamber of Commerce for approval by the managing director of the organization.
• Referral of the commercial card to the managing director of the organization in a letter from the deputy of investment for approval.
• Delivery of the card to the CEO or representative of the company after sealing it to the organization’s indenting stamp.

9. What exemption is applied in Arvand Free Zone?

Tax exemption

10. What kind of companies are in the classification of commercial activities?

Warehousing, Marketing, Commercial, Commercial Services, Shipping, Exhibition, Insurance agency, Shipping Services, Marine Services, Discharge & Loading.

11. Can Companies registered in other parts of the country register and operate in the region?

They can establish a branch and obtain an operating permit, and all activities carried out through the branch are tax exempt.

12. What is the management of port and shipping activities in Arvand Free Zone?

Commercial Management.

13. What documents are needed to issue a certificate of origin?

1- A copy of the warehouse receipt that can be traded.
2- Copy of the invoice.
3. The original certificate of origin.
4. Completion of Arvand free zone organization request form.
5. Countersign the bill in the case of non-conformity of the name of the owner of goods in the warehouse bill and the certificate of origin,”
6. Packing list “If the number of goods in the certificate of origin does not correspond to the bills of exchange.”

14. What is the difference between the warehouse bill in the free zone and other places?

It may be separated.

15. To be engaged in Shalamcheh site, what is needed?

An auction is held every year, for the purpose of exploiting the site.

16. What is the working hour of the border of Shalamcheh?

The start time of Shalamcheh Commercial Terminal is 7 a.m. to 5 p.m.

17. Official holidays of the border?

Official holidays of the two countries.
The official holidays in Iraq are as follows:
• Eid al-Fitr: one week.
• Eid al- Azha ( Ghorban): One week.
• The first day of the month of Muharram.
• From the seventh to the tenth of Muharram.
• Arbaeen Hosseini
• The first day of January.

18. Which institutions and organizations are there in Shalamcheh and who is responsible for coordinating them?

Presidential Administration of Iran , Arvand Free Zone Organization, Customs department of the Islamic Republic of Iran, Chamber of Commerce, Office of Standards, Organization of Terminals, Regional Border Guard, Governor of Khorramshahr, Passport Office, Department of Health, Emergency Services 115, Representative of Hajj and pilgrimage.

19. What are the conditions for issuing access permit to Shalamcheh Commercial terminal?

Access permit is issued in the following cases:
• For executives and personnel of (construction, investment, commerce, manufacturing) companies operating on the border of Shalamcheh, who have a commercial card, exploitation license or contract of work with the confirmation of the relevant unit.
• A person who holds a commercial card, attorney, or business employee, after completing the licensing process which is referred to on this page.
• Real person holding commercial activity card and the attorney
• Real or legal person being the director, employee or attorney of existing service activities in Shalamcheh border
• Real or legal persons including governmental or private organizations and investors visiting the zone for the purpose of field visits, marketing and collection of economic and infrastructural information.

20. What are the major goods and materials exported from Shalamcheh border?

Construction Materials (Types of Cement, Bricks, White Cement, Plaster, Tile, Ceramic, and Stone Powder) Different kinds of fish, food products (tomato paste, biscuits, cake, raisins, and…)
Vegetables (Watermelon, tomato, potato-, lettuce, eggplant, onion and …)

21. Does import order registration carries out in Arvand Free Zone Organization?

Yes, under the authority of Iran Trade Development Organization to free zones, goods order registration is carried out by the commercial management department of Arvand Free Zone Organization.

22. What is the process of registering an order?

First, the merchant registers on order registration website at www.sabtaresh.tpo.ir. After receiving the user code, goods must be registered and Arvand free zone to be selected as the delivery address. After the initial and final review, if there are no Legal restrictions the license will be issued and delivered to the applicant.

23. Is there a place for holding general and specialized exhibitions in the region?

Yes, the area has two halls with an area of 10,000 square meters in accordance with the latest standards and in a convenient location from cities Abadan and Khorramshahr in which according to the exhibitions calendar, public and specialized exhibitions are held every year.

24. What is the process of holding an exhibition in the region?

Applicant Company holding exhibition should submit their application to the commercial management department, after reviewing the subject of the exhibition and if the subject is available in the annual exhibition calendar, their request will be raised in exhibition commission, then a permit will be issued and exhibition can be held in accordance with the annual calendar.

Industrial Questions

Frequently Asked Questions

What are the conditions for land transfer?

The transfer of land to investors is carried out after the approval of the board of Arvand Free Zone Organization and is based on pricing by the official justice expert. The usual terms of the assignment are 30% prepayment and the remaining shall be in 30 monthly installments.

Is there an industrial shed ready for assignment?

In order to protect investment in the year 2010, Arvand Free-Zone Organization transferred its production facilities to a number of investors, and at the moment, all industrial sheds are contracted and available to investors. Therefore, at present no ready-made industrial sheds are available for transfer. On the other hand, a number of factories located in the industrial site, which are currently inactive for financial problems or bank debts, will lease part or all of the plant’s space to investors. It should be pursued by the investor and all issues regarding (debt, plant confiscation, environmental problems, etc.) must be reviewed with the coordination of industrial management of Arvand Free Zone Organization.

How are the necessary permits for products are issued?

Required permits for products of manufacturing units, such as sanitary, standard, ISO, etc., must be followed up by the investor and obtained from competent authorities.

How to benefit from the 6% VAT exemption?

According to Article 13 of the Law on the administration of Free Zones, all real and legal persons operating in the zone and licensed by Arvand Free Zone Organization are exempt from paying tax. Therefore, if the two sides of the transaction (the seller and the buyer) are licensed by this organization and are traded in the region, they are exempted from the payment of 6% VAT.

Are there any arrangements for granting bank facilities to investors and Artisans?

 Arvand Free Zone Organization uses all the regional, provincial and national capacities to create cheaper facilities or introduce investors and artisans to the banking system of the country with the least rate of interest possible. The facility’s manufacturing facility is organized in two parts of the National Development Fund and the Employment and Investment working group, with the introduction of the management of the Free Zone Organization. Productive units are introduced to the specialized committee by completing workshops of small business enterprises and entrepreneurs in the management of industries of the Free Zone Organization and selecting the operating bank, after the expert review and approval by the management of the industry, the qualified investors and artisans will be introduced to the operating banks.

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