Emergence of free trade zones in Iran dates back to 1979
when the Persian Gulf-based Kish Island was declared as a free zone. Other areas namely Qeshm Island and Port
Chabahar followed suit in an endeavor to prepare grounds for increasing
production and export of industrial goods and tapping the world markets based on free competition
principles.
In 1993 the law on free zones' administration was ratified further paving the way for production and industrial activities.
However, not all the zones were dubbed as the 'free trade zones'. Consequently, those areas that enjoyed individual
advantages due to their geographical situation and infrastructure, were referred to as 'special economic zones'.
Iran houses special economic zones that carry their unique merit in their names. These include Pars Special
Economic/Energy Zone, Petrochemical Special Economic Zone (Petzone), Mines & Metals Special Economic Zone,
Electronic Special Economic Zone.
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Free trade zones and special economic zones are different in terms of facilities, rules and regulations.
Guarantee of foreign investment by the government, tax holidays, capital repatriation, visa facilities, inexpensive
lands, transport and transit advantages, storage facilities, convenient
access to developing markets in the region, recreational means and tourist attractions among others
were advantages of free trade and special economic zones to encourage investment and joint ventures by potential
partners from around the world.
The move was largely driven by the country's five-year socioeconomic development plans that demanded less state
control over the economy, faster pace of privatization, attraction of private and foreign investment, creation of
employment opportunities, and above all, finding alternatives for oil revenues by laying the basis for industrial production
and standardization of products. Afterwards, New laws were approved allowing the establishment of foreign banks and
foreign and private insurance companies in the free/special economic zones.
Investment opportunities now created in 19 special economic zones and 3 free trade zones
are attractive to industrialists, contractors, bankers, insurance companies ,
e-business sector, hoteliers, shipping and transport companies, airlines and other firms engaged in investment
activities.
Another notable development was a measure taken by the Ministry of Petroleum to localize production of vital
equipments to keep the country's extensive oil, gas and petrochemical
industries going. Known formerly as K A L A NAFT, the procurement arm of National Iranian Oil Company
(NIOC) used to purchase huge amounts of parts and equipment required by the oil and gas sector. The new policy
is now revealed in renaming KALA NAFT as “Manufacturing Support & Procurement MSP KALA”. As a result, a mere
purchase of parts and equipment will no longer be an option. Foreign suppliers will be needed to collaborate with MSP
KALA to bring in the know-how required for domestically manufacturing the required equipment. On the other hand,
basing such manufacturing activities in Iran will be the start of
a new approach toward the huge markets in oil-producing countries neighboring Iran, given the fact that
equipment needed by Iran are required by regional countries as well.
Given the importance of the subject,
the third day of the event is entirely dedicated to manufacturing of oil & gas
industries' parts and equipment, marketing and relevant issues discussed by Iranian authorities and international
companies.
Encouraged by the accomplishment of the First
International Conference on Investment Opportunities in Iran's Free
Zones (IIFZ) held in December 1999 Kish Island, and also aiming to introduce the outstanding concepts of “Special
Economic Zones” and “Manufacturing Support & Procurement for Oil,
Gas & Petrochemical Industries”, IICIC decided to hold the second round of IIFZ in October 2001.
A noteworthy development in organizing the Second IIFZ is
the way the conference directs, or in fact entertains, its audience. This year's
conference will offer presentations and speeches on general economic policies only in the
mornings. After lunch, attendees will have a couple of hours for networking and also enjoying recreational facilities
provided on site. Later in the afternoon, interactive sessions and roundtables will be held for the attendees and
participants to engage in a constructive and fruitful Q&A. This is a
unique opportunity especially for foreign participants to speak face to face with authorities and
officials in charge of affairs in the country .
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