Subject to the satisfaction of the conditions set therein, the foreign investor developing a renewable energy project may enjoy certain protections provided under the Foreign Investment Promotion and Protection Act (“FIPPA”) which is the main legislation for the protection of foreign investments. In accordance with FIPPA, foreign investors are defined as non-Iranian natural and/or legal persons or Iranians using capital with foreign origin, who have obtained the FIPPA investment license.
Issuance of the investment license is subject to fulfillment of the requirement that the foreign investment should contribute to economic growth, upgrade technology, enhance the quality of products, and contribute to an increase in employment, opportunities and exports.
Foreign investments fulfilling the criteria set out in the FIPPA are guaranteed the same rights, protections and facilities as those available to local investments. Protection against expropriation or nationalization is guaranteed, unless in the “public interest”, by means of a due legal process, in a non-discriminatory manner and in exchange for payment of appropriate compensation on the basis of real value of the investment immediately before the expropriation decision is taken.
The profit derived from the foreign investment can be transferred abroad after deduction of taxes, dues and statutory reserves and upon the approval of the Foreign Investment Board and confirmation of the Minister of Economic Affairs and Finance. Furthermore, the issue of entry visas, residence and work permits for foreign personnel is facilitated by the FIPPA.
Any disputes arising between the Government and foreign investors in relation to their mutual obligations under FIPPA are subject to the jurisdiction of Iranian courts, unless another dispute resolution mechanism is available through a bilateral investment treaty with the relevant government of the home jurisdiction of the foreign investor.