Investment in Iran stock market
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Investment in stock market (Part One)

  • What is a foreign investment?

    • According to Article No. 1 of “Regulation of Foreign Investment in Stock Exchange and OTC Markets” (18/4/2010) (hereinafter the Regulation): A foreigner is any natural or legal persons that have not Iranian nationality.

    • Determining of nationality of natural person is not complicated. Iranian Nationals

    • About investment in stock market, a natural person who does not have an Iranian nationality is a foreigner and can invest in stock market as a foreigner but a natural person with an Iranian nationality cannot invest in stock market as a foreigner even if his or her capital originated in other countries.

    • If an Iranian national wants to bring his or her foreign originated capital into stock market, it does not consider as a foreign investment unless he or she obtain regarded permissions.

    • For the purpose of investment in Iran stock market, any legal persons or companies registered in a country other than Iran is a foreign national. Also a legal person registered in Iran is a foreigner if more than fifty percent of its shares are in the ownership of foreign nationals.

    • Although The Investment Funds are legal person too, but there is a special regulation about Funds with floating capital. Fund with floating capital is a foreign national if more than forty percent of its shares belong to legal or natural foreigners.

  • Types of foreign investment in Iran stock market

    • There are two types of foreign investors in stock market:

      • A foreign investor whose shares are less than ten percent of whole shares of a company. This type of investor simply referred to as Foreign Investor.

      • A foreign investor who wants to own more than ten percent of shares of a company or an investor that obtain a position in directory board of that company. This investor referred to as Leading Foreign Investor.

    • There are two criteria for a Leading Foreign Investor:

      • An investor who wants to obtain more than ten percent of shares of a company or;

      • After obtaining any amount of shares of a company, obtain a position in directory board of that company. So if a foreign investor obtain some shares of two or more companies that none of them reaches ten percent, he or she is not a Leading Foreign Investor.

    • Each of these two categories is subject to special limitations.

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