Located in the heart of Middle East, big consumer market of 80 million people and being a resource-rich country with strategic geographical connection to Gulf area, East-Asia, Russia and Europe, makes Iran a favorable trading destination. GDP of Iran is around $400bn, which makes it the second largest, economy in the Middle East and 29th globally. Iran is land of great world heritages as Persepolis, Naqsh-e Jahan square and other tremendous historical/touristic attractions. In addition to natural resources, it has a young (50% under 35) and educated population with 5 million enrolled university students – of which 60 % are women – and 800 000 skilled graduates every year.
As of being in economical/political sanctions for many years, Iran has been attempting to persevere independently and expand domestic production. However, in order to return to the global market, especially Europe, the infrastructures and technologies need to be reconditioned in many fields. These improvements could be a unique opportunity especially for European firms to either invest or resume business collaborations. Simultaneously, upgrading of the structures, easing of the sanctions and releasing of Iranian frozen assets is expected to amplify the economy and decline the inflation rate in coming years.
There are various opportunities for financiers such as oil & gas, transportation, petrochemicals, tourism, mining and power generation. Also, there are requirements for building expertise and updating technologies of many industries like welding, aviation, railways, ICT and banking. Additionally, as country has majorly hot climate and is going towards water crisis, there is a huge demand for water resource management and usage of solar energy. Construction sector in Iran also needs to be modernized. There are lots of projects for improving or building expressways, railways, ports, airports, logistic warehouses and hospitals. Hotel construction especially under license of reputed international hotel chains, adds value also to Iran’s tourism industry.
Since there are still conflicts between U.S. and Iran, other countries could be pioneers of re-establishing the business relations. As Iran has been in closer economic ties with Europe, particularly Germany, Italy and France, they could take advantage of their previous relations for leading the future markets in Iran. Many companies in Scandinavia have also showed interest in Iranian market. NICC (Norwegian Iranian Chamber of Commerce) has been opened in 2016 to ease business communications. Sweden also intends to build a trade office in Iran to facilitate business relations.
The Finland-Iran relations have been also showing a significant rise, majorly after the Ms Lenita Toivakka and her accompanying big delegation visit to Tehran in December 2015. Afterwards, there have been some intercultural communications like ‘Four seasons in Finland’ photo exhibition in Tehran organized by Finland’s embassy and unveiling the first Finnish translation of Shahnameh, the world’s longest epic poem written around 1000 years ago by a celebrated Iranian poet, Ferdowsi. Last but not least, Iran’s foreign minister, Mr. Javad Zarif visits Finland in May 2016, with a big business delegation mainly in banking, health, ICT and mining sectors.
Likewise every other business, there are also risks and uncertainties for entering to Iran market and money-transfer difficulties seems to make it more challenging. In addition to the existent prevailing competitors, inflation rate, ownership issues and mediocre relations between Iran and U.S. might influence the quality of business communications. However, with respect to the fact of existing trades between Iran and rest of the world particularly Europe, there are solutions to the mentioned risks such as collaborating with local partners/advisors, making finance through financial institutions or LC payment.
Iran is in the brain-drain top list with approximately annual migration of 150 000 skilled workers and academic elites. Approximately 4 million Iranian immigrants live abroad, mainly in North America and European union and majority of them are university graduates and/or skilled immigrants. This could be taking in to consideration by international companies intending to have business relations with Iran. Since the business culture is majorly based on local networks, skilled Iranian graduates living in the target countries could empower and ease business communications.
Here in East Consulting, we have already started to build our ties with Iranian companies and utilize our services with local knowhow and a professional network inside Iran. We aim to act as a gateway for Finnish companies, investors and organizations that are indeterminate of how to establish their businesses in Iran. Conversely, Iranian firms concerned in expanding their businesses to Europe and more specifically to Scandinavia could benefit from our services. Our team wishes to minimize the risks and provides you with the excellent services based on local expertise. Welcome to Iran!