Since the signing of the Joint Comprehensive Plan of Action (JCPOA) in 2015 by the United States, United Kingdom, Iran, China, Germany, France, Russia and the European Union, international companies are able, and even greatly encouraged, to do business with Iran, even to the point of setting up their home base in the Middle Eastern country.
Iran certainly offers many compelling reasons to do business there, with a revitalized and growing economy and a sophisticated government that plans to turn the country into quite a powerful economic and industrious force. In some ways, Iran can already be considered a developed country, with its surprisingly high education standards, huge stock market, established industries and international orientation that’s only growing as the area’s isolation has now been over for more than a year and a half.
However, Iran’s biggest draw to multinationals is the incredible work force it offers. A work force that can easily be described as “cheap labor”, stemming from a population around 80 million where most are highly educated. Teeming with opportunity, investors and corporate heads can absolutely agree on the positives they see in Iran.
As many temptations as there are to move manufacturing or even your headquarters to Iran, there are definite obstacles that could make life difficult for a company planning a move to the Middle East.
Firstly, and almost expectedly, there are a great number of cultural differences that affect the way we do business. A difference in ethics and cultural practices is evident. Nepotism runs rampant. Timelines move slower and can disrupt normal procedure. It’s extremely difficult to plan any kind of business goals in Iran in coordination with the rest of your company in the U.S.
Secondly, as great as the economy seems, teeming with potential, it’s still in a fragile state. This creates uncertainty around workforce availability, regulatory initiatives that impact business deals and guarantees of government contracts, and makes the country much more vulnerable.
Lastly, it’s extremely challenging to even simply operate in the Iranian business sector. Iran usually ends up towards the bottom when it comes to Ease of Doing Business, Global Competitiveness and Network Readiness. The amount of red tape the government spreads is incredible, regulating almost all activities inside the country. Not to mention the lack of transparency in business dealings. With a web of cross-participation, family consulting and government meddling, it’s easy to get tangled up and confused about who you’re actually associating with.
Garza & Harris, however, have the expertise and experience to navigate these treacherous waters. Our professionals fully understand, not only the Iranian legal context, but also the cultural differences and how they affect business deals. They understand the nature of these companies and the internal hierarchies.
Your goal is to reach senior management of any company you care to do business with, but that’s not always so simple. Garza & Harris professionals have the ability to penetrate the Iranian corporate structure, either directly, or through middlemen which is a common but risky practice. It’s important that they are trustworthy and knowledgeable, and can open doors to long-term relationships with Iranian heads of industry.
A move for your company is no easy task, especially in a country like Iran, but you can be confident to receive the absolute best advice and consultation from our experts.