EghtesadOnline: The High Council of Free Trade Zones has announced that a draft version of regulations for the operation of international financial institutions (IFIs) in the zones has been devised and is pending the Cabinet's approval.
According to Morteza Bank, the council's secretary, one of the visions for economic activity in free trade zones is the establishment of financial relations with international companies, but the final statutes have not yet been ratified.
“During a series of meetings with the governor of the Central Bank of Iran, a draft version of regulations for international financial institutions in FTZs was prepared and sent to CBI, which is awaiting the Cabinet’s approval,” the official was quoted as saying by IBENA.
Free trade zones were created to act as gateways into Iran's 80-million-strong economy. However, poor economic planning has left the potential of these lightly-regulated regions untapped, according to Financial Tribune.
According to the FTZ council's secretary, domestic banks have opened some 350 branches inside free trade zones, but there is still no sign of IFIs there.
As the central bank encourages FTZs to attract banking businesses, it notified a new directive to Iran's state-owned and private commercial lenders about banking in free trade zones.
CBI requires at least €25 million in capital for establishing banks and €15 million for credit institutions. However, if a foreign credit institution wants to open a branch in one of these areas, it only needs €5 million.
The minimum capital can be in any currency accepted by the regulator. The bank can lower the minimum required capital, if deemed necessary.
"Iran has seven special economic zones in the country and they can also expand in line with economic development goals," he said.
The official, who is also an advisor to President Hassan Rouhani, noted that eight new FTZs and 12 special economic zones will be established if the parliament were to approve the plan.
Bank also said special plans have been devised to foster exports from free trade zones.
“Creating export incentives is an important issue and the government has also targeted the export of $1 billion worth of goods from FTZs,” he said.
Bank noted that more than 1,200 and 700 industrial units are active in the country’s free trade zones and special economic zones, respectively.