EghtesadOnline: Pulling money out of the country of their birth and buying foreign assets such as real estate have been a common practice of the rich in Iran for years.
However, now even those with a little more than enough money in their bank accounts are keen to exchange their Iranian rials for foreign assets—from foreign currency to real estate to investments in the so-called international cryptocurrency exchanges.
According to a report by the International Monetary Fund, Iranians broke a new record for getting money out of their country last year: $27 billion. The worst year in terms of capital outflow, before last year, was the fiscal 2010-11, when the country suffered from a negative capital account of $25 billion, Financial Tribune reported.
Figures on Iran’s capital account show nearly $135 billion flew out of the country between 2006-7 and 2016-17, the Persian daily Iran reported.
The Central Bank of Iran’s data show close to $16 billion and $30 billion flew out of Iran in the fiscal 2016-17 and 2017-18, respectively.
An $18.3 billion deficit in the capital account was registered for the country in 2016-17 while the first half of the last fiscal saw a $6.3 billion in the country’s negative capital account.
Some officials provide different statistics. For example, Farhad Ehteshamzadeh, the chairman of Imports Federation of Iran, said capital flight over the past 40 years has amounted to more than $800 billion.
Earlier this year, Chairman of Majlis Economic Commission Mohammad Reza Pour-Ebrahimi voiced concerns about the country’s massive capital depletion in favor of other countries, stressing that as much as $30 billion were taken out of Iran only in the final months of the last fiscal (March 2017-18).
“Best Countries to Live and Invest in”; “Buy Real Estate in Turkey”; “Guide to Buying Property in Georgia”: These are just a few ubiquitous satellite TV commercials and newspaper advertisements these days inviting Iranian people to invest abroad.
The interesting point is that the target audience of these advertisements is no longer the wealthy investors from the affluent, upper class.
Today, Iranian middle class, including rank-and-file employees of public and private companies, is also attracted by the lure of investment in other countries. Some even sell their homes and other properties.
According to Majid Reza Hariri, the deputy head of Iran-China Chamber of Commerce, the number of applications for immigrant investor visas has increased significantly in recent years.
Hariri noted that more than 100,000 people are waiting for their investor visas while over 1.5 million have applied for Australia and Canada permanent residency.
“The investment needed for acquiring such visas is between $150,000 and $500,000,” he said.
Investment in real estate is another way that can take Iranians to get a visa from a foreign country.
A poll by Tranio Company, a real estate agency, shows the number of Iranians who have invested in real estate market of foreign countries increased by 2.5-fold last year compared with the year before.
Turkish Statistical Institute estimates that in 2017, Iranians purchased more than 792 residential properties in Turkey, which accounted for 3.5% of all home purchases made by foreigners there. The figure also shows a 19% rise compared with 2016.
Persian Gulf littoral states, Britain, Germany, Switzerland, France, the UAE and even Georgia received Iranians’ financial resources besides Turkey last year.
According to the statistics by London-based Rockstone Real Estate, homes Iranian buy in London are worth £1-30 million.
The fast-growing cryptocurreny Bitcoin and other digital currencies were also attractive to Iranian investors last year.
According to Pour-Ebrahimi, they have invested more than $2.5 billion in Bitcoins so far.
Iranian economist, Ali Rahmani, said when the stakes of investment in a country is too high, investors tend to shift to overseas markets.
“Foreign countries are in constant competition to absorb investments and Iranians’ resources are one of their targets. They offer special incentives like visa and employment to investors because such promotional strategies are appealing to Iranians,” he said.
“That should be a cause for concern for top officials. They need to improve business environment and safety of investment in the country.”
With the urge to invest abroad comes fraudulent practices on the part of those who seek to take advantage of the current state of affairs.
For instance, there have been many reports of imposters claiming to be real estate brokers promising Iranians residence in neighboring countries in return for buying homes.