Setting Up an Agency in Iran

A representative of a foreign company is an individual or a legal entity that performs some parts of a foreign company in Iran. Therefore, the representative (agent) of a foreign company shall be a natural person or legal entity who, by signing an agency contract, carries out a certain part of the duties of the foreign company it represents in Iran. The representative is considered separated from the foreign company and liable for all activities that the representative renders in Iran on behalf of the foreign company. In fact, both the representative and the foreign company may be held responsible for the actions that the representative implements under the agency contract. Any clause in the agency contract providing otherwise is invalid and the foreign company will also be held accountable for the conduct and actions of its representative in Iran

Foreign companies that are recognized and admitted as legal companies in their countries of origin i.e. have been formed on the basis of the laws and regulations of those countries and are legal entities, will be able to register its representative offices (agency) in Iran. Therefore, registration of foreign companies in Iran will be carried out on the basis of reciprocal treatment and authorization of Iranian companies to be registered in those countries.

The scope of authority of the representative is more limited than the branch of a foreign company. A branch of a foreign company enjoys more authority in Iran because it can involve itself in every field of activity of the foreign company, while a representative can only undertake the activities stated in the agency contract.

There are two features associated with setting up a representative office in Iran:

1-The representative could be a natural person or a legal entity that act in its own name and responsibility; 2- Representation of foreign companies in Iran is granted based on the contract between the representative and the foreign company. This agency contract can be exclusive or non-exclusive.

Moreover, the agency of the foreign company in Iran must be managed by one or more than one natural person residing in Iran.

Furthermore, in accordance with the relevant law and regulation, the Representatives of a foreign company in Iran must report their activities in Iran together with their audited financial statements, within four months after the expiry of the fiscal year, to the government authorities concerned in Iran.

The Activities Permitted to Be Carried Out by a Representative in Iran:

It must be noted that the representative of a foreign company in Iran is only allowed to conduct the following activities:

• Offering after-sales services of foreign products/services;
• Operating contracts signed between Iranians and foreign companies;
• Conducting investigations and providing the pre-requisites for foreign investment in Iran;
• Cooperating with Iranian technical/engineering companies to do projects in other countries.
• Increasing none-petroleum exports of Iran;
• Rendering technical/engineering services and transfer of technology;
• Engaging in activities that have been authorized by legally competent authorities in Iran such as rendering services in transportation, insurance/ inspection of goods, banking, marketing and etc.

Required Documents and Procedures for Registration an Agency in Iran:

• Legalized and certified agency agreement;
• Identification documents of the applicant including:

A) In cases where a natural person shall act as the representative of a foreign company, a copy of ID and residential address;

B) In cases where a legal person shall act as the representative: Articles of Association establishment notice and the latest change  notice.

• The address of the place of residence of the representative and the address of the office of the representative.
• Documents certifying experience of the applicant in areas of the representative agreement;
• Legalized and certified Articles of Association of the foreign company, establishment announcement, and latest change;
• A report of the activities of the foreign company containing the followings:

-Information regarding the activity of the foreign company;

-reasons and requirements explaining why an agency is required in Iran;

– Legalized and certified the latest financial report of the foreign company;

• A letter of authorization of the principal representative(s) of the foreign company.

-Information regarding the activity of the foreign company;

-reasons and requirements explaining why an agency is required in Iran;

– Legalized and certified the latest financial report of the foreign company;

• A letter of authorization of the principal representative(s) of the foreign company.

All the above-mentioned documents prepared in the foreign country shall be confirmed by that country’s relevant authorities (such as Company Registration Bureau), Ministry of Foreign Affairs and Embassy or Representative of the Islamic Republic of Iran in that country. After being officially translated into Persian and certified in Iran, the original and translation thereto shall be submitted to the Company Registration Bureau.

Bayan Emrooz Law Firm renders services to foreign and Iranian natural and legal persons in all corporate law, including registration of a company, branch and representative office. Having an experienced and specialized legal staff, Bayan Emrooz is ready to provide the needed legal services in respect to Setting up an Agency in Iran.