16 May '18
Commercial Agency in Iran Law; Contracts and Conditions
- According to Iran commercial laws, foreign companies can establish a branch in Iran. They also can establish an agency office.
- See Also What a Foreigner Needs to Know About the Legal Frameworks of the Companies in Iran
- Commercial agency contract or commercial representative contract is important in case of:
- One- A branch wants to conclude a contract for principal company.
- Two- establishment or registration of a commercial agency in Iran.
- Three- validity of contracts concluded by any agent depends on commercial agency contract.
- The term “commercial agent” shows that there are also non-commercial agents too. These agents are civil agents like attorney and guardian.
- Here we discuss important parts of commercial agency contract in Iran laws.
- How Iran laws define a commercial agent and commercial agency contract?
- Unfortunately there is no definition for any of them. Lack of definition doesn’t have any effects on validity and applicability of the agent and the contract.
- According to regulation for registration of commercial agency in Iran, company registration office will register the commercial agency. Registration process need a commercial agency contract. So there are two matters in this are:
- 1- registration of commercial agency in Iran.
- 2- commercial agency contract.
Registration of commercial agency in Iran
- According to regulation for registration of commercial agency in Iran, foreign companies can establish a commercial agency for one or more of following activities:
- After sale services for the principal company.
- Applying the executive phase of contracts concluded between Iranian nationals and the principal company.
- Contextualizing of investment in Iran on behalf of the principal company.
- Enhancing non-oil exports in Iran.
- Cooperating with Iranian companies in order to work in other countries.
- Technical and engineering services and the transfer of technology.
- Perform any other business activities which are permitted by governmental organizations such as transportation, insurance and marketing.
Rules for registration of commercial agency
- Commercial agency can be a natural person or a legal entity.
- Commercial agent should have a commercial agency contract. This requirement exclude the registration of implied agents or sui generis agents.
- Commercial agent is responsible for actions that hs been done on behalf of principal company.
- Applicant of registration is commercial agent. The principal company will not get involve in registration process.
Commercial agency contract in Iran laws
- As mentioned above, if you want to register commercial agency in Iran, you need a commercial agency contract. Also if you don’t want to establish an agency office but only need to introduce someone to represent you in commercial situations, you need a contract.
- The regulation for registration of commercial agency in Iran doesn’t specify the conditions of this contract. Therefore any valid contract is enough.
- This contract should meet the criteria for a valid contract. These criteria are:
- 1- parties,
- 2- subject,
- 3- right and duties.
- Model Agency Agreements presented by ICC are generally acceptable in Iran legal system.
- In lack of any definition of commercial agent and commercial agency contract, any contract that meets the requirements of a valid agency contract is acceptable for both purposes; registration and general use.
- Commercial agency contract should be legally acceptable. Also it must be acceptable for company registration office. we explain some of the important parts.
- One- Authority: the agency’s authority must be expressed and Since it is on the agent to obtain certificates, the authority to do so and authority to register the agency must be clear in commercial agency contract. An agent doesn’t have any authority unless it is stipulated in the contract.
- Two- Subject: the subject of a commercial agency contract can be:
- Commission agency,
- Brokerage agency,
- Contract agency,
- Banker agency,
- Factor agency,
- Del Credere agency, See DEFINITION of ‘Del Credere Agency’
- Or an agency with combination of these subjects.
- Three- Administrator: If the agent is a legal entity, the manager or administrator must be a natural person. The contract must determine this person. Also it is possible to choose a board of administrators. The administrator/s must reside in Iran.
- In any case, commercial agency contract must meet the validity requirements regardless of its subject.
- For general information about structure of companies see