Iran: Legal and Business Environment
An Interview with Mr. Umit Herguner
Iran and P5+1 (USA, China, France, Russia, UK and Germany) signed a historic deal on July 14th in the form of Joint Comprehensive Plan for Action (JCPOA). The agreement aims to make Tehran’s nuclear program more transparent, in exchange of gradually lifting certain sanctions imposed by the United States, United Nations and European Union.
Umit Herguner traveled to Iran with a group of partners in early September 2015 and held a series of meetings with the representatives of legal and business communities. In this interview, Mr. Herguner shares his observations and insight about what the future holds for Iran in terms of business opportunities and legal environment, as well as Turkey’s role in guiding businesses in this new territory.
What are your impressions about the daily life in Iran?
One of the most striking things we have noticed in Tehran is the role of women in social and business life. They appear to be not only taking an active role in the daily life, but also in the business life, as we have witnessed in the meetings we have held.
However, the long-standing sanctions have clearly made a negative impact on everyday economy. There are a lot of things that need to be improved. We have also got the impression that income distribution and social equality will be one of the main issues on the agenda of Iranian policy makers, because the sanctions regime apparently led to the accumulation of wealth in the hands of few. Various political players influence the private sector. There seems to be a constant jockeying of power within the Iranian regime, with significant consequences on business.
Have you noticed any outcome of the nuclear deal signed between Iran and western powers?
The idea that the nuclear agreement would lead to the gradual lifting of sanctions has apparently created a great deal of excitement in international business. All the law firms we have met told us that requests from international firms have rapidly increased over the past two months.
How do you see the legal environment in Iran?
Obviously, their legal system is primarily based on Islamic principles. Law firms are rather small-sized, and it is forbidden for international law firms to enter Iran. But there could be cooperation between them. However, it should be noted that the legal environment is currently not in a position to guide international investors, in case they rush into the Iranian market following the lifting of sanctions. While Iran provides a lot of business opportunities, first comers will be in need of qualified legal service. This will be the main challenge of businessmen and lawyers.