Step 1. Providing the documents of the mother company including the registration documents of the company and documents approving its activity [Federal Tax Service registration certificate, the gazette (if applicable),  Certified Card of the company, etc] and the audited Financial Statement of the company for the last year/season (based on the structure of the economy).

Step 1.2 Official / Notary translation of all the documents to Farsi.

Step 2. Receiving an Iranian Identification Number for the mother company [issued by the Organization for investment Economic and Technical Assistance Of Iran]

Step 3. Grant of Power of Attorney (POA) to the representative for registration of the branch and other related activities. Every action which the agent shall do on behalf of the mother company must be mentioned in the Power of Attorney (POA) text. The Grant of POA can be done in a Notary office in Iran but some of Iran Consulates also provide the service.

Step 4. Official registration of the branch in Iran in various Iranian organizations including National Office for Registration of Companies & Brands, Ministry of Trade and Industry, Iran Chamber of Commerce, etc. In this step, the exact description of the duties and powers of the representative must be officially declared.

Note: Establishing a new entity as the branch (not authorizing a current entity as the representative) requires nominating an office and opening a bank account.

Finally, The establishment of the branch or representation will be announced in the National gazette and afterwards, it will have a legal aspect.

Despite the financial sanctions against Iran by the United States, there are still various methods to transfer money to Iran and avoid being sanctioned. Naturally, each method has its own pros and cons, benefits, costs and risks and selecting the method suitable for each transaction is dependent on the specific conditions of the transaction. Anyway, we hope the following instruction helps you decide your optimal method. 

Let’s classify the demand for payment to 2 classes:

1. One-time (or rarely) and/or small-amount payments:

1.1 The most traditional and untraceable method: Pay by Cash.

United States Dollar and Euros are almost acceptable by everyone in Iran. Moreover, entering cash to Iran is not subject to limitations.

Officiality: There are official procedures in Iran to receive money in cash -even for formal transactions- so it completely depends on your side whether to take cash payment into an official account.

Risks: The risks are limited to risks of using cash all around the world (theft , etc). 

1.2 The most modern and fastest method: Use crypto-infrastructure.

Although there are extremely various options including Bitcoin, our suggestion is USDT (United States Dollar Tether) because of its fixed value (always 1 $) which eases calculations.

The procedure is as easy as opening a wallet in a crypto-exchange and charging it, entering the wallet address of the receiver and the amount, confirming and it’s done in a few minutes.

Officiality: Although the wallet address can be mentioned in the contract, it is rarely known as an official payment method.

Risks: Although crypto-wallets do not have official owner names but due to characteristics of blockchain technology it is not so hard to track transactions so do not use this method for large, reputative transactions if you want to avoid future risks. Although there are some coins that claim full anonymity, we can not approve or deny these claims.

1. Regular and/or big-amount payments:

2.1 The most classic method: Bank system Transfers.

Due to the financial sanctions and FATF restrictions, Iran’s banking system is disconnected from SWIFT. However, if you want to transfer money to Iran from Russia, there are some banking solutions. The most common method is using Mir Business Bank, a Russian bank fully owned by Bank Melli Iran. Mir Business Bank -which has active branches in Moscow, Astrakhan and Kazan- is connected to some Iranian banks and can transfer the money to the destination bank account, although many Iranian businesses working with Russia, have a bank account in  Mir Business bank. 

The main problem with this method, which causes Iranian businesses to be reluctant about- is that the exchange rate by which Mir Business bank exchanges other currencies (specifically Rubles) to IRR (I.R. Rials) is influenced by Iran Central Bank official rate and much lower than free market rates. This way, the Iranian exporter must declare higher prices in USD or Rubles for its goods and services so that the IRR amount it receives is equivalent to the real value.

2.2 Finally, the most common method: Pay to a trustee bank account in a third country.

Almost all Iranian businesses have proxy companies and/or trustee agents in Turkey and/or UAE who receive and pay on-behalf of them.

In the conventional situation, it would seem odd to trade with one company and pay into another individual or company’s bank account but under a sanction situation, it’s the most ordinary method.

Officiality: In the case your internal control rules obligate you to pay into the bank account necessarily owned by the counterparty, you shall need to sign the contract with the proxy company instead of the main counterparty.

Risks: This procedure carries various risks, but all risks will be borne by the recipient of the payment.

Disclaimer: Please consult with a legal expert to ensure compliance with current regulations and avoid potential risks.

Wage tax in Iran is subject to a Tiered Tax system, low levels of wage are tax free and higher wages are subject to higher tax rates. The thresholds (in IRR) update each year. The tax rate for the final step (approximately more than 700 USD per month) is 30%.

The normal VAT rate for goods and services is 10% but some products are exceptions and follow different rates. The VAT rate for all Agricultural products (including cereals, fruits, spices)  and inputs (including livestock feed, fertilizers, pesticides & seeds); main foods (including wheat, rice, meat, oil, milk, cheese & yogurt); Drugs and medical goods; and military equipment is 0%.

The seller of goods and services is obliged to receive VAT from the buyer. At the end of each season, any active business agent is obliged to pay the received VAT amount (for sold goods or services) minus paid VAT amount (for purchased goods or services) to the Tax Office. 

All active business agents (both Legal entities e.g. Companies; and individuals) must submit their annual financial performance reports including their profit and loss statements to the Tax Office.  The net profit of the company (revenues minus accepted operating and non-operating expenses) is subject to income tax.  

Income tax rate for businesses is 25%, except for some sectors including agricultural activities for which the rate is 0% (only for operational incomes).

Terms: Accounting standards in Iran are almost similar to international standards but the literature/language (of accounts, reports, etc) is completely Farsi.

Schedule: Any company can specify its own “financial year” while establishing but for almost all Iranian companies the financial year is the Iranian year which starts on March 20th.

Reporting system: The reporting system is electronic but keeping the accounts on papers is still obligatory. 

Costs: The cost of accounting services may vary based on the size of the company and its turnover, complexity of the activity, etc. The monthly costs for normal activities are between 500 to 1000 USD. Consider paying the same amount (equivalent to wage of a month) at the end of the financial year for closing the accounts and providing the comprehensive statements. Note: the costs of Official Financial Audit are not included and are relative to the amount of activity.