TEHRAN- The establishment of free trade zones (FTZs) in Iran dates back to the Iranian calendar year 1368 (March 1989 - March 1990) following the fall in the country’s oil income in the preceding year which prompted the government to promote non-oil exports.

The first two free trade zones of Iran were established in the south of the country. The first one was Kish Free Trade Zone established in 1368 on Kish Island in the Persian Gulf and the second one was Qeshm Free Trade Zone established the year after on Qeshm Island in the Strait of Hormuz.

Some five other free trade zones have been also established in the country since then, including Chabahar in southeastern Sistan-Baluchestan Province, Arvand in southwestern Khuzestan Province, Anzali in northern Gilan Province, Aras in East-Azarbaijan Province and Maku in West-Azarbaijan Province, both in the northwest of the country.

As the free trade and special economic zones have great potential to accelerate economic development, the development of existing free trade and special economic zones and the establishment of new zones has become one of the major economic approaches of the Iranian government, and the government is determined to attract investment to these zones.

In last August, Secretary of Iran’s Free Zones High Council Hojatollah Abdolmaleki, said the growth of investment-making has doubled in the country’s free trade and special economic zones during the current government’s incumbency.

The official said that the implementation of development projects has also doubled.

In an interview conducted by the Tehran Times in last June, Abdolmaleki said: “In the past, the amount of foreign investment made in the zones was very limited and the reason was that the investment opportunities and capacities in these areas were not well introduced. This [Iranian calendar] year (began on March 21, 2023), we started a program that, thank God, is working very well, and that is preparing investment packages and introducing them to domestic and foreign investors.”

These packages are in fact a preliminary feasibility study plan that shows the profitability of that plan, the amount of capital required, the required raw materials, technical and technological issues, consumer and market, which is actually the feasibility studies of that project and it shows whether the project is profitable or not, he added

“We gave the title of “Safe haven for Investment” to Iran's free trade and special economic zones because, first of all, the cost of production in these areas is very low, the cost of land, the cost of manpower, the cost of energy and the cost of access to raw materials are very low, and there is appropriate infrastructure in these areas, and they mostly have good access to global markets, in addition to domestic markets. And in these areas, very special discounts and exemptions are offered as well”, the secretary of Iran’s Free Zones High Council further highlighted.

“Profitability in these areas is very high and our goal with these packages is to make the work of the investor easy”, he underlined.

As announced by Abdolmaleki, Iran unveiled 850 foreign investment packages in the 23rd China International Fair for Investment & Trade (CIFIT), which was held in last September.

As reported, the country presented packages ready for investment in its 48 free trade and special economic zones during the mentioned fair.

The secretary of Iran’s Free Zones High Council, who traveled to China to participate in the mentioned event, said at the time that 850 foreign investment packages worth 15 billion euros were ready for the investment of foreign partners, which were presented in that exhibition.

In early December 2023, the official announced that 1,000 investment packages worth nine quadrillion rials (about €20 billion) have been prepared to be offered to investors in the country’s free trade and special economic zones.

Speaking to the press on the sidelines of the Second Eurasian Economic Union (EAEU) Exclusive Exhibition on December 5, Abdolmaleki said: “The preparation of investment projects to introduce the country’s free and special economic zones to international economic operators and investors was put on the agenda since the beginning of the current [Iranian calendar] year.”

“Investment projects are considered as a tool to introduce the opportunities and advantages of investment in the country’s free and special economic zones to the economic operators. The preliminary studies of each of these projects have been done, the infrastructure has been provided and the necessary licenses have been issued,” he explained.

According to the official, the mentioned investment packages had been unveiled in four stages since the beginning of the current Iranian calendar year, the last of which worth 2.5 quadrillion rials (about $5.0 billion) was presented in the EAEU exclusive exhibition.

The secretary of the Free Zones High Council emphasized that these zones are considered as poles of the economic progress, adding: “Free and special economic zones are frontiers of the country's international economy and more than a third of the country’s non-oil exports was done from these zones.

At the same time, the official outlined 10 new strategies to increase investment and export in the country’s free trade and special economic zones.

Abdolmaleki made the remarks in a meeting with the deputy heads of the country’s free zones on the sidelines of the second EAEU Exclusive exhibition.

He stated that the mentioned strategies mainly focus on a network of cooperation among the investment and economic departments of the country’s free zones.

“Joint marketing between the free zones in the fields of income, investment, logistics, and export is the main purpose of the said network,” he explained.

Implementing a comprehensive plan for developing logistics and re-export from free zones by using the capacities of combined transport and transit among free zones is another part of the mentioned strategies, the official said.

“The third strategy is the use of the capacity of international organizations and agreements such as the Eurasian Economic Union. Shanghai, BRICS, ECO, etc.,” he added.

The official stated that identifying the advantages and distinctive features of free zones and introducing them to each other to benefit from the relative advantages of each zone in the network structure is another part of the mentioned coordinated strategies.

“The fifth strategy is to use the passenger goods model to maximize the income of free zone organizations and the sixth strategy, is to attend exhibitions and domestic and international business events to introduce the investment opportunities of free zones in line with the continuation of the path taken this year,” Abdolmaleki said.

The seventh strategy would be to determine a supply chain of goods among free zones in such a way that goods are exchanged, sold, or supplied in a cooperative network, the official said, adding: “using China's One Belt One Road plan with a focus on free zones, determining a comprehensive tourism network of free and special zones to outline the common interests and goals are the eighth and ninth parts of this program; and monetary, banking, and financial cooperation in the form of drawing up a cooperation style sheet to finance construction projects and investment is the tenth strategy.”