Tuesday Mar 28, 2017

The Act on Establishment and Administration of Special Economic Zones of Islamic Republic of Iran


Part I – Objective
Article 1) In order to support economic activities, to establish international commercial relations and to stimulate regional economy, production and processing of goods, to transfer technology, non-oil exports, to provide a generative employment, to encourage domestic and foreign investment, re-export, foreign transit and transshipment, the government is authorized to establish zones as Special Economic Zones in the cities that have the necessary capability and capacity to fulfill the above objectives.
Note 1. Geographical limits, comprehensive plan, type and limits of authorized activities of any of the special economic zones established for certain activities shall be determined on the strength of this Act at the recommendation of secretariat and with the approval of the board of ministers
Note 2. New special economic zones shall be established upon approval of the Islamic consultative assembly.

Part II – Definitions and Generalities
Article 2. The following terms shall be used in this Act for the following detailed names or expressions:
Country: The country of the Islamic Republic of Iran
Customs: The Islamic Republic of Iran Customs Administration (IRICA)
Zone: Special economic zone
Organization: Organization of any special economic zone
Secretariat: Secretariat of free zones high council
Article 3) In execution of this Act, board of ministers shall be responsible for the followings:
a)    Assign or substitute the responsible organization in the zone including governmental and non-governmental
b)    Supervise on the activities of the zones within the framework of their plans and objectives
Note 1. Where necessary, board of ministers can establish a governmental organization to administrate the zone. Articles of association of these organizations shall be approved by the board of ministers at the recommendation of the secretariat.
Note 2. Responsible organization in the zone shall be assigned from among legal non-governmental persons subject to ownership (or official transfer of concerned governmental systems) and possession of the lands located within the area of the intended special zone by legal non-governmental persons before issuance of a permit by the board of ministers. In such case, the regulation for substituting the responsible organization in the zone shall be subject to the contract to be made and entered into effect by and between the secretariat and organization with due observance of this Act.
Article 4) In addition to the services supplied by the executive systems, the organization may, according to the bylaw to be approved by the board of ministers, receive funds for supplying general infrastructural and engineering services, transportation facilities, warehouse keeping, discharging, loading, health, cultural, communication, educational and welfare services and facilities. Natural and legal persons involved in the production of goods and services within the zone are exempted from paying any common state duties.
Article 5) The activities of the organization in the zone shall be only limited to those authorized based on this Act.
Article 6) Annual budget of any zone which is administrated by a governmental organization shall be prepared within the framework of policy making and observance of government's plans and according to the contents of the relevant articles of association.
Article 7) Permits for economic, civil, construction, cultural, educational and service activities shall be issued by the responsible organization of each zone according to the policies and regulations of government and within the framework of the master plan approved by that zone.
Note: In case of any breach from the above-mentioned policies and regulations, the concerned authorities shall notify to the responsible organization of the zone and the organization shall remove the breach.

Part III – Goods Import and Export Regulations
Article 8) Commercial exchanges of the zones with abroad and/or with other special economic and free commercial and industrial zones shall be exempted after registration at the customs from customs duties, commercial profit and all export and import duties under any title and shall not be subject to limits and prohibitions of import and export regulations except for legal and religious limits and prohibitions. Commercial exchanges of the zones with other parts of the country except for the above-mentioned zones shall be subject to import and export regulations.
Note 1: The goods, which are transported to respective zones from other places across the nation in order to be hired or consumed, are regarded as case of domestic transportation. However, export of the said goods from the said zones to foreign countries shall be subject to Law on Export and Import Regulations, ratified on Sept 26, 1993.
Note 2: The goods to be exported, for which export formalities (including bank and administration affairs) have been accomplished, is regarded as final export after arrival at the zone.
Note 3: Raw materials and foreign parts imported to the country for processing, conversion, completion or repair, shall be subject to temporary import regulation and after accomplishment of processing, conversion, completion or repair, will be returned to the zones and cleared in order to be used in the zone with no declaration and export permit or least customs formalities.
Article 9) Goods importation from the zone to the other parts of the country by passengers and to any amount is forbidden.
Article 10) Importers of goods to the zone may transfer their goods, partly or entirely, against separated transactional warehouse receipt, to be issued by the organization of the zone. In this case, the holder of the said receipt shall be regarded a goods owner.
Note: Management of each zone is authorized that further to the request made by the applicant, it issues a certificate of origin to the goods that are taken away from the zone in order to take required measures upon confirmation of Iran’ Customs Office. State banks are obligated to accept the certificate, subject of this note.
Article 11) Manufactured or processed goods in the zone are permissible and regarded as domestic products upon their arrival in other places across the nation for total of value-added and value of domestic raw materials and domestic parts and they shall be exempted from import duties accordingly.
Note 1) Manner of determination of value-added shall be described by pertinent Executive By-law to the said Law.
Note 2) Foreign raw materials and parts, used in manufactured or processed goods are permissible on the condition of payment of import duties and shall be regarded as domestic raw materials and parts. Commercial interests, included in import duties of automobiles and separated parts shall be subject to observance of Article 72 of Law on regulating part of governmental financial regulation ratified on Feb. 16, 2002.
Article 12) Islamic Republic of Iran Customs Office is obligated to accept the request made by goods owners for transit of goods, to be directly transported from other arrival borders to the zones and to provide required facilities for this purpose.
Article 13) The interval given for stay of imported goods to the zone shall depend on discretion of the management of the zone. Respective criteria for stay of goods in places of the zone will be determined and applied by the organization.

Part IV – Investment and Registration Regulations
Article 14) Manner of acceptance and entry and exit of foreign capital and the interest thereof to the zone as well as manner and extent of foreigners' contribution with the activities of each zone shall be according to the law on encouragement and supporting foreign investment ratified on 10/03/2002.
Article 15) State organization for registration of deeds and real is obliged to make the following measures based on the request of the concerned zone's organization and as per bylaw ratified by the board of ministers:
a. Registration of companies and representative offices of those companies willing to render activities in the zone, disregard of the proportion of their domestic or foreign shares, as well as registration of material and intellectual ownerships in the zone.
b. Separation of properties and real estates in the zone at the discretion of the organization of the zone, issuance of separated title deeds in compliance with current rules of the country.

Part V – Miscellaneous Regulations
Article 16) All affairs, associated with hire of human resources and work relations, insurance and social security in the zone shall be according to the current ratified regulations at free trade-industrial zones.
Article 17) All rights, achieved by real and legal entities, prior to establishment of the zone, shall be valid and continuation of their activities shall be permissible within the framework of the comprehensive plan of the zone
Article 18) All ministries, organization, institutions and governmental companies and those affiliated to government shall render required services including extension lines of water, power, telecommunication, fuel and other services within the framework of their legal duties, considering current ratified rates and facilities, in similar geographical zone.
Article 19) The existing zones shall be subject to the said Law and responsible organizations of special economic zones, which have been established to the approval date of this Law, are obligated to adapt their conditions to the said law within a maximum period of one year (as of approval date of the said Law) for continuation of their activities.
Article 20) Limits of special economic zone are not included in the customs territory of Islamic Republic of Iran and the Customs office is obligated that in accordance with the contents of Article 8 of this Law it will be established at entry and exit borders in order to enact the regulations of import and export.
Article 21) Intra-zone activities except for the items, described by the said Law, shall be subject to other rules and regulations of Islamic Republic of Iran.
Article 22) Responsible governmental organization may transfer respective buildings and lands belonging to them in the zone at the price, estimated by an official expert.
Article 23) As of approval date of the said law in the zones of which responsible organizations are governmental or affiliated to government, all of legal duties, powers and rights of the Ministry of Agricultural Jihad and Forests and Pastures Organization in lands and natural resources affairs of each zone are borne by responsible organization of the same zone.
Article 24) Enactment of sovereignty affairs according to statutory rules shall be done by government.
Article 25: Appertained Executive By-law to the said Law shall be ratified by the cabinet of ministers upon recommendation of ministries of economic affair and finance and commerce and state management and planning organization as well as secretariat bureau of supreme council of free zones.

Executive Bylaw of the Act on Establishment and Administration of Special Economic Zones of Islamic Republic of Iran
Article 1) The following terms shall be used in this Bylaw for the following detailed expressions:
a)    Country: The country of the Islamic Republic of Iran
b)    Customs: The Islamic Republic of Iran Customs Administration (IRICA)
c)    High Council: High Council of Free Trade-Industrial Zones and Special Economic Zones
d)    Secretariat: Secretariat of High Council of Free Industrial-Industrial Zones and Special Economic Zones
e)    Law: Law on Establishment and Administration of Special Economic Zones
f)    Zone: Special Economic Zone
g)    Organization of the zone: It is a governmental or non-governmental legal entity that is designated upon recommendation of the Secretariat Bureau, by Supreme Council and is responsible for administration of the zone.
h)    Comprehensive and strategic plans of the zones are prepared by the organization of the zone and shall be ratified upon recommendation of the Secretariat Bureau of Supreme Council.
Article 3) Briefing report and rough draft of the bill of the establishment of new special economic zones will be drawn up by the Secretariat Bureau and shall be submitted to the Cabinet of Ministers after confirmation of the Supreme Council.
Article 4) Manager of the zone will be appointed by the organization of the zone.
Article 5) Designation of the organization of the zone shall depend on proprietorship and possession of the respective lands prior to issuance of the authorization by the cabinet of minister.
Article 6) Further to the services, rendered by the executive organizations, the organization of the zone shall receive the price of public, infrastructure and engineering services, communication facilities, warehousing, discharging, loading, hygienic, cultural, communication, training and welfare services that it directly offer at the zone from legal and real entities. Respective tariff of the said fees, which must be in proportion to the respective services, aiming at preserving the competitive situation of each zone, will be drawn up by the organization of the zone to be submitted to the Supreme Council for ratification. The said council shall act upon investigation, confirmation or modification of the said tariffs within one month. Otherwise, the said recommended tariffs shall be regarded as confirmed.
Note 1) Respective criteria of engineering council and benefiting from the services of eligible technical contractors and engineers with respect to engineering services must be observed.
Note 2) The organizations of the zone are obligated to make required arrangements and opportunities for rendering the said services by non-governmental sector. In this case, the rate of tariff of the said services shall be designated and applied by responsible organization of the zone.
Article 7) Responsible organization of the zone is obligated that upon issuance of license of activity, they will observe and apply governmental regulation and policies.
Note: In case the said licenses, issued by the organization, don’t conform to governmental regulation and policies, the organization shall be liable for all probable damages incurred by real and legal entities.
Article 8) Commercial transactions of the zone with foreign countries and other special economic zones and free trade-industrial zones are permissible and do require submission of customs declaration with no other formalities.
Note: The guaranty of the organization of zone will also be accepted by Iran’s customs office once every year or annually.
Article 9) The goods, which are imported to the zone from other places of the country, for repair and/or completion, and returned to the country, after repair or completion, are subject to import duties according to import and export regulations. 
Article 10) Return of the every goods, imported from outside the country to foreign countries or return of goods, imported from other parts of the country to the country shall be free of impediment on the condition of presentation of information related to the import of the said goods without no formalities, according to the authorization issued by the organization of the zone.
Article 11) Foreign raw materials and parts, imported to the zones for processing, conversion, completion or repair, are subject to temporary import regulations and after processing, conversion, completion or repair will be returned to and settled at the zones with least customs formalities in order to be used at the zone.
Article 12) Transportation institutions and owners and holders of vehicles are obligated that upon import of the vehicle to the zone, they will prepare a certified copy of the bill of landing of each item of their products, enclosed with the total list of cargo to the organization of the zone and customs office residing at the zone for enactment of legal supervisions.
Article 13) VAT and subject of article 11 of the law shall be assigned by a committee consisting of the representatives of ministry of industries and mines, ministry of commerce, central bank of the Islamic republic of Iran, Islamic Republic of Iran Customs Administration, secretariat and the relevant zone to be held at the secretariat.
Note 1. Total VAT and price of domestic parts and raw materials used for the produced goods to be specified by the said committee shall be considered as domestic goods and shall be exempted from payment of all importation duties upon arrival to other parts of the country.
Note 2. Goods in excess of added value produced in the zone shall be authorized to be imported to the country. Importation duties shall be accrued only to the foreign parts and raw materials consumed there.
Article 14) The deadline for stoppage of the goods arrived at the zone shall be determined by the organization. The organization may note the deadline at the back of warehouse slip as a condition during the contract and may ask the goods owner to sign that. It may further mention in that condition that in the case the goods owner does not take action in exiting its goods within the specified period or does not suggest the proper course to pursue, the organization shall be entitled after one month from the written notification sent to the domicile of the goods owner to directly take measure in executing its regulations.
Note: Goods owner is a natural or legal person or its legal substitute or a transportation operator in his name the goods manifest or separated/endorsed warehouse slip has been issued.
Article 15) Registration of companies and representative offices of those companies willing to render activities in the special economic zone, disregard of the proportion of their domestic or foreign shares, as well as registration of material and intellectual ownerships in the zone based on the request of the organization of the zone shall be the responsibility of the concerned department for registration of deeds and real estates and according to the regulations for registration of companies and industrial and intellectual ownership in the free trade-industrial zones of the Islamic republic of Iran subject of approval No. K15011T/21453 dated 20/05/1995 and its subsequent amendments.
Note: In the special economic zones, all duties and authorities subject of clauses 3 and 6 of articles 1, 2 and 3 of the said approval shall be assigned to the concerned department for registration of deeds and real estates.
Article 16) Separation of properties and real estates of the zone as well as issuance of ownership documents in the zone shall be performed only at the request of the organization of the zone and by the concerned department for registration of deeds and real estates. Transfer of properties and real estates in the zone between natural and legal persons shall be possible at each stage upon information of the organization with due observance of relevant regulations.
Note: Issuance of separated title deeds shall be subject to submission of the construction completion certificate issued by the organization of the zone.
Article 17) The affairs related to employment of manpower and labor and social security relations, work contract, work conditions and their dispute settlement authorities shall be based on the regulations for employment of manpower, insurance and social security in the free trade-industrial zones subject of approval No. K25T/33433 dated 06/06/1994 and the subsequent amendments.
Note: The term "Free Trade-Industrial Zones" used in the said approval is substituted with the term "Free Economic Zones" for the purpose of execution in the free economic zones.
Article 18) Organizations of the zones are obliged to send their monthly import and export statistics to the ministry of commerce, customs administration, central bank of the Islamic republic of Iran and secretariat.
Article 19) Secretariat is obliged in parallel with fulfillment of objectives and missions to completely supervise on the performance of the zones and to submit the relevant report to the high council per six months. The zones shall be responsible against the high council for their performances.
Note: The secretariat is obliged in execution of such legal duty to review all the documents of the organization including books, files, contracts and correspondences without any exception and the organization is obliged to cooperate with the secretariat.
Article 20) For the cases not predicted by the law and this bylaw, actions will be taken as per regulations of import and export and customs affairs. This approval was ratified on 23/05/2007 by the president.
In the session held on 23/04/2006, at the recommendation of executive deputy minister and based on the 138th principle of the constitution of the Islamic republic of Iran, the board of ministers approved as follows:
Approval No. 534169T/57720 dated 12/12/2005 is amended as follows:
1)    In clause (1) the term "and Special Economic Zones" is added after the term "Trade-Industrial".
2)    In clause (2), before the term "to a Commission", the term "and the Law on Establishment and Administration of Free Economic Zones of the Islamic Republic of Iran, Approved in 2005, (Except for Clause 2 of Article 1 of the Said Law)" is added