EghtesadOnline: A total of $37.2 million worth of foreign direct investments were made in Iran’s special economic zones during the last Iranian year (March 2019-20), up by a whopping 1,760% compared with the previous year.
Based on the latest figures released by the Economy Ministry, domestic investments made in rials over the period stood at 89.84 trillion rials ($329 million) to register a 173% year-on-year rise.
Domestic investments in dollar over the period amounted to $4.9 billion, registering a 65% increase compared with the year before.
The Economy Ministry’s figures show that a total of $13.5 billion worth of commodities were exported from the Iranian special economic zones during the year under review, which indicate a 20% YOY decline.
The report attributes the fall to financial and banking sanctions imposed on Iran.
Imports of mainly raw production materials and industrial equipment into these zones over the same period saw a 38% YOY decrease to stand at $2.86 billion.
In the last Iranian year, 599 industrial units in Iranian SEZs created jobs for 205,650 people. The figures show a respective rise of 3% and 18% compared with the preceding year.
There are currently 30 special economic zones in Iran.
Business and trade laws in a special economic zone are different from those across the country. SEZs aim to increase trade balance, employment, investment, job creation and effective administration.
To encourage companies to set up business in the zone, financial incentives are offered. These policies typically encompass investing, taxation, trading, quotas, customs and labor regulations.
Additionally, companies may be offered tax holidays and later lower taxes.
The creation of special economic zones by the host country may be motivated by the desire to attract foreign direct investment.
Companies can produce and trade goods at a lower price in a special economic zone, which help them become globally competitive.