There’s a lot of money to be made doing business with Iran, a country of 78 million people—the second largest population in the Middle East, after Egypt. It has a highly educated population with a lot of pent-up demand. Its $400 billion economy, crippled by sanctions, is poised to surge. And the global business community, minus US companies, is ready to roll.
While the Iran nuclear deal needs to pass the US Congress, none of the six other negotiating partners need such legislative approval. Nations that had complied with international sanctions to force Iran to the negotiating table will lift those sanctions once nuclear inspectors confirm that Iran is complying, which should happen in early 2016.
Not so in the United States. Even with the nuclear deal surviving a congressional vote, US sanctions unrelated to the nuclear program (concerning Iranian human rights abuses and its foreign policy) will still be in place. These laws will continue to bar most American companies from doing business with Iran. They will also prohibit foreign banks or other financial institutions dealing with Iran from operating in America or conducting US dollar transactions. But foreign businesses will find ways to circumvent those restrictions; there is simply too much money to be made.
After all, Iran has the world’s second largest gas reserves after Russia and it is fourth in oil reserves. Iranian officials say they need $185 billion to update the petrochemical sector. The nation is thought to have rich deposits of zinc, copper and gold, and experts say that mining has the potential to become a $60 billion industry, rivaling the country’s oil industry. Iran also desperately needs to upgrade its infrastructure, including the purchase of a new airline fleet of as many as 400 planes.
Anxious to attract foreign investment, the Iranian government is opening its doors. Its foreign investment regulations give foreigners 100% ownership rights and the right to transfer their profits out of the country in foreign currencies. In certain conditions, tax exemptions can rise to as much as 100% of an enterprise’s profits. To quell investor fears of expropriation, the government guarantees compensation for any investments in projects that are nationalized or expropriated.
Picture: United States Department of State [Public domain], via Wikimedia Commons