SYDNEY, March 10, 2016 /PRNewswire/ -- Following the lifting of economic sanctions, Iran launched a 2025 strategic economic plan aimed at doubling its USD 415 billion economy. To achieve this mission in the next decade, the Iranian Government has to ease the current climate of economic recession, reduce unemployment and become the largest exporter and the largest economy in the region. Iran has to diversify from its dependence on oil & gas, enhance manufacturing in non-oil sectors, develop a knowledge-based sustainable economy, and attract investments to the tune of USD1.5 trillion. This emphasis on manufacturing growth has opened avenues for Australian companies and investors to participate in Iran's economic momentum as providers of technology, finance and manufacturing process enhancement support.
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Ali Mirmohammad, Senior Consultant and Business Development Manager – MENASA, Iran, Frost & Sullivan, said, "Iran needs to increase its annual GDP growth to over 8% in the next two years. Focusing on developing the entire value chain in the mining and petrochemical industries is a priority area to form a good foundation for diversification. Efforts to make the country globally competitive are directed towards creating a favourable business climate for companies to enter and invest in developing its core focus sectors. These investments spanning industry verticals offer huge opportunities for technology providers, engineering and service providers as well as investors."
Australia's Foreign Minister, Ms Julie Bishop will be meeting the Iranian Foreign Minister, Dr. Mohammad Javad Zarif, next week in Canberra to facilitate negotiations regarding failed Iranian asylum seekers. Ms Bishop has also stated that a resolution in this area will further economic ties as Australia looks to engage with Iran in a number of ways to advantage Australian businesses. In a demonstration of its commitment and ambition to achieve economic progress in line with their 2015 plan, the Iranian Foreign Minister is travelling with a large economic delegation to offer specific opportunities in metals and minerals, healthcare, infrastructure engineering, as well as agricultural businesses.
"Following the announcement on the Joint Comprehensive Plan of Action (JCPOA) agreements between Iran and 5+1, the Australian government had gradually started economic negotiations with the Iranian government in certain sectors, though were less swift to move in on this lucrative market than Europe was. While Australia currently contributes less than 0.4% of the USD 52-55 billion Iranian import market, it has potential to boost its contribution in the industries of mining, agriculture, medical and medicines, meat, as well as engineering and services. The Iranian Government is keen on attracting foreign investment through BOO, BOT and/or PPP modes and is encouraging joint ventures with local partners primarily in infrastructure, downstream segments of oil & gas, mining and petrochemical projects," added Mirmohammad.
Frost & Sullivan research indicates the following upcoming opportunities in each area -
Investment in Iran also provides strategic access to Europe, Africa, Russia and CIS countries. While instability in Iran's current business environment poses some business risk, availability of manufacturing infrastructure, skilled labour, access to over 400 million consumers and importantly low cost of products offer immense opportunities for Australian investors to invest or enter joint ventures with local Iranian partners, targeting not only the local Iranian market, but prospectively increasing market share through access into African, European, Russian, GCC and CIS countries.
Russia has already allocated over USD 40 billion to develop required infrastructure to ease export from Iran, and plans to cut import duties for Iranian companies; a move that would benefit Australian companies in JV's with Iranian companies exporting to Russia.
Other incentives that the Iranian Government has extended to foreign investors in Iran include 80% exemption of income for 4 Years in manufacturing investments, 100% of income for 10 years in less developed areas (all investment activities), 100% of Income for 20 years in free economic zones (all activities), 100% of income for no limited time in agricultural business, 50% on tourism income for no limited time and 100% on income derived from exportation for no limited time. Additionally, foreign investors that build factories in Iran and export 30% of their products will benefit from a 50% tax break in addition to other incentives.
Frost & Sullivan Perspective on Iran's Macroeconomy and Opportunities across Industries for Global Companies – A Goldmine of Opportunities was undertaken by the Innovation and Knowledge Center (IKC), which is the fundamental intelligence hub of Frost & Sullivan's consulting and strategy consulting business in the Middle East, North Africa, and South Asia. It consolidates all forms of analysis including technical, application-related, economic, financial, and market under a single umbrella. In addition to creating comparative studies for countries such as the attractiveness index, the economic research arm of IKC has a portfolio of products, which can aid a market player to understand the impact of various macroeconomic forces and make the best of them in a business environment. Some of these enablers are country profiles, multi-country comparative studies, PESTLE analysis, and impact analysis of global economic and political developments, investment trackers, and economic pulse monitors.
To know more about Frost & Sullivan Perspective on Iran's Macroeconomy and Opportunities across Industries for Global Companies – A Goldmine of Opportunities or to hear how Frost & Sullivan can assist Australian companies keen on understanding and tapping opportunities in Iran, please email [email protected]
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