Doing Business in Iran: The Do’s and the Don’ts

20170221_113250Extract Tehran Times:

By Rebecca Meijlink – A team at International Research Networks (IRN) organised an excellent Iran Business Symposium on Feb. 21+23, 2017, at the Renaissance Hotel in Amsterdam. The purpose of the conference was to further create a better multilateral understanding and to serve as a platform whereby the global business and investment community could discover the latest developments and opportunities within the newly opened economy of Iran following the implementation of the Joint comprehensive Plan of Action (JCPOA), commonly called the nuclear deal. The forum was also intended to provide an opportunity for open discussion.

Sam Jalaei, Attorney-at-Law, partner Magnusson Law, gave an excellent presentation including an overview of the Do’s and Don’ts

 Thorough preparation will lead to success
 Most obstacles in Iran can be overcome if companies prepare well at home and comply to certain guidelines
 Some foreign companies are better positioned than others (based on perceived product features or loyalty throughout the sanction years)
 3 main rule to facilitate a smooth entry to the Iranian market;

1) Get the basics right
 A good understanding of the country’s history, culture and business landscape is an absolute minimum
 Language is essential; many documents are only available in Persian and some older Iranians do not speak well English or German. Having Persian speakers and advisors in your team will prove invaluable.
 Gaining a good understanding and the build-up trust will take time and effort and through face-2-face meetings (wining and dining) and not through emails and conference calls
 Travel to Iran and expect to be present often and ideally establish an anchor on the ground (”boots on the ground”). The country and all its intricacies demand frequent face-to-face interactions

2) Start at the top
 Aim and go for an entry point in the highest echelons of an organization/company
 May not be easy at first, but it will speed up the overall process (and expect to mirror the level of seniority in terms of attendance)
 When access to senior management is difficult. Local agents are essential to open doors and help with navigate the system – Persian advisors
 Selecting a reliable local agent could be one of the most strategic moves that a company entering Iran makes

3) Position for long term
 A differentiating and long-term positioning is crucial to spark interest for sustainable partnerships
 Building local employment through offices and factories or JV is a very strong commitment
 When doing business in Iran, one key virtue is patience
 Decision-making simply takes time due to the culture and administrative roadblocks
 When meetings are closed with clear next steps, expect the timelines to be fluid

 Be aware…Iranians tend to re-negotiate over and over again (even closed items)
 Absolute essential establishing networks: Relationship-building
 International experience is not always given
 Mostly limited foreign language knowledge – young population speak well English
 Calculate duration of negotiations
 Preferably draft easy and short contracts (LoI or MoU in advance)
 Do your due diligence – know who you are dealing with
 Corruption and bribery – no. 130 out of 168 – A priority of President Rouhani
 Snap-back clauses
 Do not expect same level of excellence and professional approach

Doing Business in Iran – Slide Show Presentation

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