Doing Business in Iran

Iran’s tumultuous political history has meant that despite the country’s wealth of resources, it has been relatively isolated from the global economy.

International business partnerships with Iran have been tentative at best and are generally limited to the energy sector. Unfortunately, negative images and stereotypes of Iranian society have clouded the great warmth and hospitality of the Iranian people.

The country's business infrastructure and processes may not be on par with those of the Western world, but the Iranian economy offers plenty of potential for discerning expat entrepreneurs.

Those wishing to do business in Iran must endeavour to understand the people, culture, etiquette and their approach to business. It’s only by operating with a degree of cultural sensitivity that international businesspeople will be able to enhance their business experiences in Iran.

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Fast facts

Business hours

Saturday to Thursday, 9am to 5pm. Thursday is typically a half day when businesses close at noon. 

Business language

Farsi, also known as Persian, is the official language of Iran. English is spoken in most business circles and higher levels of government, but it's still advisable to arrange an interpreter.

Dress

Business dress should be smart and conservative. Suits are standard, but wearing a tie is not common. Women should dress conservatively. They should be particularly careful about covering up their arms, legs and hair in public.

Gifts

Gifts are not necessary for business proceedings. If invited to a colleague's home, flowers or chocolates are a great option. Do not give gifts that contain alcohol or pork.

Gender equality

While the number of women in business in Iran is increasing steadily, the country still has a long way to go in terms of achieving equality. Iran still has a very traditional view of gender roles, which impacts how women are treated in business. Women rarely occupy the most senior positions. 

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Business culture in Iran

Personal relationships and networking

Success in Iranian business circles is often defined by who you know rather than what you know. Taking the time to get to know one’s colleagues and business associates is vital to getting ahead in business.

Business in Iran is personal, and many companies are family owned. Having a solid network of friends in Iran is important, and one shouldn’t be afraid to ask for favours. That said, expats should also be prepared to go the extra mile for colleagues in the future. Reciprocal support is an integral part of doing business in Iran.

Meeting and greeting

Business associates typically greet one another with a formal handshake. Men must wait for a woman to extend her hand before making any gesture. If she doesn’t extend her hand, a simple nod of the head and a smile will suffice.

It is best to keep things formal when doing business in Iran. Once a relationship has been established and counterparts begin to address expats using their first name, it is acceptable to do likewise. Men are addressed with the title ‘agha’ followed by their surname. Women will be addressed using the title ‘khanoom’.

In Iran, the most common greeting is ‘salaam’ when meeting someone. Upon leaving a meeting, Iranians will generally say ‘khoda hafez’ which translates as ‘may God preserve you’.

Business etiquette

For new arrivals, business procedures in Iran may seem erratic. Those doing business in Iran should endeavour to make appointments four to six weeks in advance. They should also confirm appointments by telephone and in writing. Before arriving at a meeting, it is a good idea to call the day before to ensure that it is still going ahead.

Punctuality is rare in Iran, but expats should still arrive on time to create a good impression.

Doing business with government officials will test one’s patience, and expats should prepare to be kept waiting. Administration and bureaucracy in Iran are sometimes chaotic and this will often cause delays. Always be courteous and avoid showing outward signs of frustration when kept waiting.

At the beginning of a business meeting, small talk is exchanged. Asking after a colleague’s health and family is expected. It’s best to wait for the Iranian business associate to begin talking about business.

Business negotiations

Getting to know Iranian colleagues on a personal level is critical. Initial business meetings will focus solely on becoming familiar with one another rather than discussing business matters. Formal proceedings only begin once relations have been established.

Haggling is a common element of Iranian business culture. So, expect long negotiations to take place. Decision-making can be slow, and it is likely that expats will have to meet with several people before a final decision is made. Iranians will gather opinions from their associates before they trust new business partners.

Implementing decisions can be just as slow in Iran. It often requires manoeuvring through the slow-moving Iranian bureaucracy. Applying pressure in a non-confrontational manner may speed things up. The best method is often to ask a favour from an influential colleague wherever possible.

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Setting up a business in Iran

There are numerous stages and bureaucratic hurdles that expats contend with when setting up a business in Iran. These include obtaining criminal record clearances, registering for VAT, officially registering the company’s name, paying stamp duty and enrolling employees in the social security programme.

Expats should note that they should anticipate long waits for most of the necessary documentation. They should seek advice from Iranian business associates and fellow expats who have previously been through the process.