The investment outlook in Iran, especially after implementation of JCPOA, has been broadened and brightened. The figures and statistics of FDI – incoming FDI in the recent two years show an increasing trend in incoming FDI into Iran .
The robust business & investment opportunities of the Iranian economy as well as the competitive and the comparative advantages in Iranian economy have prepared a promising ground for investment in several sectors and areas.
The FDI statistics based on the statements and the publications of Iran Investment and Technical Assistance Organization, The Iranian organization responsible for approving and regulating FDI to Iran show that almost 8 billion USD of FDI has been approved and entered into Iranian economy in the year 2016. The interim figures for the year 2017 show also a further increase in FDI applications as well as the approvals made by Iran Investment and Technical Assistance Organization. Assuming all major parameters and factors to be stable, I can say that we should witness and expect a further increase in FDI for the year 2018.
The Iranian economy has several areas and sectors which can offer lucrative investment opportunities. To name some of them I can categorize them into 5 major fields.
The 1st category is those industries which are based on Iranian natural resources, namely: oil, gas and minerals .Iran stands on top of the world in terms of accumulated fossil fuels reserves i.e. oil and gas together. Moreover, in terms of other minerals Iran is ranked among the top 10 countries of the world. So,
doing business and investment in oil, gas and mineral-related industries and services have a great prospect.
The 2nd category includes industries which relate to Iranian geopolitical location. Iran sits on the crossroad of Asia to Europe and south-north corridors. Most of the corridors and main cargo and passenger transition routes, from east to west cross Iran and that has made Iran on of the shortest connecting routes for cargo and passenger. So, doing investment in logistics and transport-related industries in all means, air, sea, rail and road, as well as ports, seaports, airports, have a great economic outlook.
The 3rd category is based on the Iranian geographical and climatic advantages. Iran is a country with various climates on a single day throughout the year. The diversity of Iranian nature and climate along with its ancient civilization of four thousand years and the numerous historic monuments and cultural sites has created an excellent combination for all sorts of tourism including cultural tourism, ecotourism, religious tourism etc. Moreover such climatic diversity has given the ground for investment in agriculture and mechanization of agriculture as well as agro-industries.
The 4th category is based on human resources .Iran is among the top 3 countries in terms of the absolute number of engineering students and graduates; and per capita Iran stands on top of the world.
Iran has a pool of young, educated and talented youth which gives the country a distinctive capacity to absorb investments based on the merits and the skills of its human resources.
As a proof, we are witnessing a start-up boom in Iran in the recent years and Iranian start-ups have so far absorbed good amounts of FDI. In a nutshell all those industries which major asset is human resources, like IT or knowledge-based fields, could expect a good growth prospect in Iran.
The 5th category is those industries which are based on Iran’s consumers as well as those of its neighboring countries. Iran has a population of almost 80 million people and considering its immediate neighbors the Iranian regional market goes beyond 400 million people. Most of this population is among the middle class consumers.
So a market of 400 million people is a lucrative market for doing investment in manufacturing and production of FMCG products and other consumers’ items.
Beside these major potentials and categories of doing investment in Iran, There is also a major threat or obstacle for further growth of Iranian economy and that is the scarcity of Iranian water resources. No doubt we should manage this threat urgently. Considering water deficit as an actual threat, it is at the same time an opportunity for those investors and companies which can provide technologies for water treatment, water productivity, waste water recycling etc. So, even out of this an opportunity may emerge for timely investors.
Iran’s potentials are not quite known to foreigners, because of disconnection of Iranian economy from the world during the period of sanctions. Fortunately potential investors have the chance now to visit Iran and eyewitness its diverse capacities. Therefore my first recommendation to all investors is to come and visit Iran and to see the opportunities in business and doing with and investment in Iran closely. In this way they can definitely judge better the gap between the reality and the pictures through the lens of the media .We need to have more communication with the other economies and with their investors to inform them of the potentials that the Iranian economy has.
Iran Chamber of Commerce, Industries, Mines and Agriculture, as the highest and the most comprehensive organization of the Iranian private sector, has started to play a role in absorbing FDI into the economy, especially in order to encourage the Iranian private sector to find their foreign counterparts and form joint ventures for direct investment in Iranian economy. For this purpose, it is about 2 years that we have established some committees and workgroups for studying the obstacles of making investment in Iran as well as documenting investment opportunities in various fields. Our chambers have started to showcase those investment opportunities in various events, whenever they deploy business trade missions to our country. Beside that we are studying and soon we are going to set up some overseas offices and branches for having more direct contacts with potential foreign investors or corporates and individuals who want to do business in Iran. I hope that we, as the representative of the private sector can create a bridge between the Iranian private sector and the private sectors of the other countries so that the both sides could introduce their potentials to one another and join hands to synergize and proper.