What is a free zone?
What is a free zone? According to international definitions, a free zone is a protected port and non-port area that is excluded from some of the current regulations of the respective country and enjoys benefits such as tax exemptions, forgiveness of profits and customs duties, no unnecessary foreign exchange, administrative and Cumbersome regulations, as well as facilitating and expediting export and import processes, help to develop the mainland by attracting foreign investment and transferring technology.
In the United Nations (UNIDO) definition of free zones, it is considered as a “stimulus” to encourage industrial exports. The new concept of free zones – known as the export processing free zone – also refers to a special industrial zone outside the customs border, whose products are export-oriented. The philosophy of this term can be considered in changing the import strategy to the export development strategy.
Special industrial trade zones can also be defined as follows: “To a specific geographical area in which customs laws of the country’s customs area are not enforced, and in order to facilitate the import and export of goods and support the country’s domestic industry and technology “New issues in regional production and development that are created at the customs bases and border points of the country are called special commercial-industrial zones.”
The difference between special economic zones and free trade
Some of the most important differences between free and special zones can be summarized as follows:
Tax exemption for ?? There are years in free zones and in special economic zones tax rebates are in accordance with domestic regulations.
Retail sale of goods in special economic zones is possible only for foreign nationals. However, in free zones, retail is possible for foreign and domestic citizens.
Visa requirements for foreign nationals in special zones are based on domestic regulations, but in free zones visas are issued at entry borders.
Labor and social insurance regulations in the employment of foreign nationals in free zones are subject to special regulations of the regions, but in special economic zones are subject to domestic regulations.
What is the main advantage of special economic zones?
– Customs exemption up to the value added value and payment of customs duties in excess of the value added of foreign parts in products
– Import of production line machinery and office tools and furniture without customs duties
– Compliance with the labor law of free trade and industrial zones in special zones
– Issuance of construction permit and completion of work for free
– No time limit for abandoning goods in the special area. You will also find other benefits by studying the laws and regulations of the area.
Law on the Establishment and Administration of Special Economic Zones of the Islamic Republic of Iran
Part One – Purpose
Part II – Definitions and generalities
Part 3 – Regulations on import and export of goods
Part IV – Investment and Registration Regulations
Part Five – Miscellaneous Rules
Law on the Establishment and Administration of Special Economic Zones of the Islamic Republic of Iran
Part 1 – The purpose of returning to the list
a matter ? – In order to support economic activities and establish international trade relations and mobility in the regional economy and production and processing of goods, technology transfer, non-oil exports, creating productive employment and attracting and encouraging domestic and foreign investment, re-export, foreign transit (Transit) and Transfer of Goods (Transit) The government is allowed to create areas called special economic zones in cities that have the talent and capacity to achieve these goals.
Note? – In special economic zones that have been created for certain activities, the determination of geographical area, comprehensive and physical plan, type and limits of authorized activity of each of them will be in accordance with this law and upon the proposal of the Secretariat and approval of the Cabinet.
Note? – The creation of new special economic zones will be with the approval of the Islamic Consultative Assembly.
Part 2 – Definitions and generalities of returning to the list
a matter ? – In this law, the following words are used instead of detailed names or phrases related to:
Country: Country of the Islamic Republic of Iran.
Customs: Customs of the Islamic Republic of Iran.
Area: Special Economic Zone.
Organization: The organization of each special economic zone.
Secretariat: Secretariat of the High Council of Free Zones.
a matter ? In implementing this law, the Council of Ministers also has the following responsibilities:
A- Determining or changing the responsible organization of the region, both governmental and non-governmental.
B- Monitoring the activities of the regions within the framework of their programs and goals.
Note? – The Council of Ministers can, if necessary, establish a government organization to manage the special zone. The statutes of these organizations will be approved by the Council of Ministers upon the proposal of the Secretariat.
Note? – The appointment of the responsible organization of the region from among the non-governmental legal entities is subject to the acquisition (or official transfer of the relevant government agencies) and the occupation of the lands located within the special zone by the non-governmental legal entities, before issuing the Cabinet permit. The rule for changing the organization in charge of the region in such a case is subject to a contract that is concluded between the secretariat and the organization in compliance with this law.
a matter ? – The organization can, in accordance with the regulations approved by the Council of Ministers, in addition to the services provided by the executive bodies in return for providing public infrastructure and engineering services and transportation facilities, warehousing, unloading, loading, cultural health, communications, education And receive funds. Natural and legal persons who are active in the region in the production of goods and services, are exempt from paying any usual duties in the country for operating in the region.
a matter ? – The activities of the regional organization are only within the limits of the activities that are allowed according to this law.
a matter ? – The annual budget of each region managed by the government organization will be prepared within the framework of policy-making and observance of government programs and will be approved in accordance with the provisions of the relevant statute.
a matter ? – Issuance of licenses for economic, civil, construction, cultural, educational and service activities in accordance with government policies and regulations and within the framework of a comprehensive and physical plan approved by each region is at the disposal of the responsible organization of that region.
Note – In cases of violation of the policies and regulations mentioned above, the relevant agencies shall notify the responsible organization of the region and the organization is obliged to eliminate the violation.
Part 3 – Rules for entering and exporting goods Back to the list
a matter ? – Trade exchanges with foreign countries or with other special economic zones and free trade and industrial zones after registration in customs are exempt from customs duties, commercial profits and all import and export duties under any heading and are subject to restrictions and prohibitions. Import and export regulations are not subject to legal and sharia restrictions and prohibitions, and trade exchanges of regions with other parts of the country, with the exception of the above-mentioned regions, are subject to export and import regulations.
Note? – Goods that are transported to regions from other parts of the country for use and consumption are among the cases of internal transportation in the country. But their export from the regions abroad is subject to the law of export and import regulations approved? /? / ???? is .
Note? – Export goods whose export formalities (both banking and administrative) have been completed after entering the export zone are considered final.
Note? – Raw materials and foreign parts imported to the regions that are imported into the country for processing, conversion, completion or repair are subject to temporary import regulations after processing, conversion or completion or repair for use in the region without preparing an export declaration and license or Minimum customs formalities are returned to the areas and settled.
a matter ? – The entry of goods as passengers in any amount from the region to other parts of the country is prohibited.
Article ?? – Importers of goods to the regions can transfer all or part of their goods to others in exchange for a separate warehouse receipt that will be issued by the regional organization. In this case, the holder of the separate warehouse receipt will be considered the owner of the goods.
Note: The management of each region is allowed to issue a certificate of origin for the goods leaving the region with the approval of the Iranian Customs, upon the request of the applicant. The country’s banks are obliged to accept the certificate subject to this note.
a matter ?? – Goods produced or processed in the region when entering other parts of the country in the amount of total value added and the value of domestic raw materials and domestic parts used in it are allowed and domestic production and will be exempt from import duties.
Note? – The method of determining added value will be determined in the executive regulations of this law.
Note? – Raw materials and foreign parts used in produced or processed goods are subject to payment of import duties, are allowed and are considered as raw materials and internal parts. Commercial profit included in the car import rights and its spare parts in compliance with Article (??) of the Law regulating part of the government’s financial regulations approved ?? / ?? / ???? is .
Article ?? – The Customs of the Islamic Republic of Iran is obliged to accept the request of the owners of goods for transit of goods and direct transportation from other points of entry to the regions, and to provide the necessary facilities for this purpose.
a matter ?? – The deadline for stopping the goods imported to the region is at the discretion of the regional management. Criteria for stopping goods in places and areas of the region are determined and applied by the organization.
Part IV – Investment Rules and Return Registration
a matter ?? – How to accept and enter and leave foreign capital and profits from it to the region and how and the amount of foreign participation in the activities of each region according to the law on encouraging and supporting foreign investment approved ?? / ?? / ???? will be done .
a matter ?? – The State Property and Deeds Registration Organization is obliged to take the following actions at the request of the Regional Organization and in accordance with the regulations approved by the Council of Ministers:
A- Registration of companies or representative branches of companies that intend to operate in the region, waiving the amount of participation of their domestic or foreign shares, as well as registration of material and intellectual property in the region.
B- Separation of real estate located in the region with the opinion of the regional organization and issuance of relevant ownership documents in accordance with the current laws of the country.
Part Five – Miscellaneous Rules Return to List
Article ?? – Matters related to manpower employment and labor relations, insurance and social security in the region will be based on the approved and current regulations in the free trade-industrial zones.
a matter ?? – Any acquired rights of natural and legal persons are valid before the creation of the region and their continuation of activities will be allowed within the framework of the comprehensive plan of the region.
a matter ?? Ministries, organizations, institutions and government and government-affiliated companies in the field of legal duties, the necessary services such as electricity, water, telecommunications, fuel and other services within the possibilities and at the current approved rates in the same geographical area to areas Will provide.
Article ?? – The existing areas are subject to this law and the organizations in charge of special economic zones that have been established until the date of enactment of this law are obliged to comply with this law within one year (from the date of enactment of this law) to continue their activities.
Article ?? – The scope of special economic zones is not part of the customs territory of the Islamic Republic of Iran and the customs is obliged to establish them at their entry and exit points in order to apply the regulations related to export and import in accordance with the provisions of Article (?) Of this law.
a matter ?? – Activities within each region, with the exception of the cases mentioned in this law, are subject to other laws and regulations of the Islamic Republic of Iran.
Article ?? – The responsible government organization can transfer the innovations and lands belonging to it in the region based on the expert price.
Note – The transfer of lands subject to this article by natural or legal persons exploiting it, subject to land use, shall be subject to the submission of a certificate of completion issued by the organization of each region.
Article ?? – From the date of enactment of this law in areas where the responsible organization is government or affiliated with the government, all rights and powers and legal duties of the Ministry of Jihad Agriculture and Forests and Rangelands Organization in land and natural resources of each region are the responsibility of the responsible organization That is the area.
a matter ?? – The administration of government affairs in accordance with the relevant laws is the responsibility of the government.
Article ?? – The executive regulations of this law will be approved by the Cabinet upon the proposal of the Ministries of Economic Affairs, Finance and Commerce, the Management and Planning Organization of the country and the Secretariat of the Supreme Council of Free Zones.
There are currently 30 special economic zones in the country.