Are foreign companies obliged to register their branch and representative office/s initiating commercial activity in Iran?
According to Articles 3 and 4 of the Registration of Companies Act, approved in 1931, any foreign company that wants to carry out commercial, industrial or financial activities in Iran through a branch office or a representative, must first have already been recognized in its country of origin as a legal entity and then it should be duly registered in Iran. According to Article 4 of the Law of Protection of the Rights of Consumers (ratified in 2009): “all the suppliers whether producers or importers of capital goods including heavy or light vehicles, industrial or agricultural and road construction machinery, home appliances, electrical and electronic products, audio and video equipment and communication devices are bound to have registered agents and authorized repair shops, to supply spare parts and render after sale services”.
The registration shall be done in the related department of the Ministry of Industry, Mines and Commerce.
What are the consequences of non-registration?
In accordance with Article 5 of the Registration of Companies Act, any person engaged in industrial, commercial or financial affairs in Iran, as a representative or a branch manager on behalf of foreign companies who has not applied for registration, shall be liable to payment of a fine in the first instance. If this violation of law persists, then the government shall suspend the activities of the representative or branch manager. It should be noted that foreign goods offered on the Iranian market without having registered their respective agency, are considered contraband.