C A N O U N Kanzlei Übersetzungsbüro

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1 The Law Concerning the Permission to Register Branches and Representative Offices of Foreign Corporations Official Gazette No , dated ( ) Letter No. Gh- 1592, dated ( ) Article 1 - Foreign corporations which have legal existence in their country of incorporation may register their branches and representative offices, in accordance with applicable laws and regulations of Iran, for purposes determined by the Islamic Republic of Iran, provided their country allows reciprocity. Note: The implementing regulations of this law shall be approved by the Council Of Ministers pursuant to the recommendation of the Ministry of Economic Affairs and Finance and coordination with other relevant authorities. Approved by the Council of Guardians 28/8/1376 CANOUN

2 By- law of the Law for Allowing the Registration of a Branch or Representative of Foreign Companies The By-law was issued in the form of a decree by the Iranian Council of Ministers under number H-19776t/M/ dated 3 May CANOUN The Council of Ministers, in the course of a meeting held on March 31, 1999 ( ) pursuant to a proposal by the Ministry of Economy and Finance and in compliance with the Note appended to the Single Article of the Law ratified in 1997 authorizing registration of branches of representative offices of foreign companies (in Iran), approved the Executive Bylaws of the said Law as follows: Article 1: Foreign companies which are recognized as legal companies in the country where they have been registered, may, on the provision of the reciprocal conduct of their home country, register their branch or representative office for launching activities in Iran, in the following areas, according to this by-law and other related laws and regulations: 1- Offering after-sale services for the goods or services of the foreign company. 2- Carrying out the executive operations of the contracts concluded between Iranian persons and foreign companies. 3- Studying and laying grounds for the foreign company's investment in Iran. 3- Cooperation with Iranian technical and engineering companies for undertaking activities in third countries. 4- Increasing the non-oil exports of the Islamic Republic of Iran. 5- Offering technical and engineering services and transfer of know-how and technology. 6- Engaging in activities permitted by the governmental agencies which are legally authorized to issue such permits, in areas such as offering services in the fields of transportation, insurance and surveying, banking, marketing, etc. Article 2:

3 The branch office of a foreign company is the subordinate local unit of the principal company which carries out the objectives and functions of the principal company in that location. The activity of the branch in the location shall be conducted under the name and responsibility of the principal company. CANOUN Article 3: Foreign companies applying for registration of their branch in Iran should submit the following information and documents together with their written application to the Office for Registration of Companies and Industrial Property. 1- Articles of association of the company, establishment notice and the last changes registered with the related authorities. 2- Last confirmed financial report of the company. 3- Justification report including information relating to the activities of the company and explanations of the reasons and necessity of registration of the branch in Iran, determination of the type and scope of powers and location of the activity of the branch, estimation of the required Iranian and foreign manpower, and the manner of securing the sums in Rials and foreign exchange needed for running the affairs of the branch. Article 4: Representative (agent) of the foreign company, is the natural or juridical person who is charged, according to the representation (agency) contract, with carrying out a certain part of the object and functions of the principal company. The representative of the foreign company shall be responsible with respect to the activities carried out in the location under the agency granted by the principal company. Article 5: The natural persons of Iranian nationality or juridical persons applying for registration of the representation of the foreign company in Iran, should submit the following Farsi translations and original documents and information together with their

4 written application to the Office for Registration of Companies and Industrial Property: CANOUN 1- A certified copy of the contract subject of Article 4 of this by-law. 2- Identification documents of the applicant person: birth certificate card and address of the legal domicile for natural persons. Articles of association and establishment notice and the last changes registered with the related authorities. 3- Presentation of the background of the person applying for registration of representation in the spheres of activity foreseen in the representation contract. 4- Articles of association of the principal company, establishment notice and the last changes registered with the related authorities. 5- A report on the activities of the principal company and explanation of the reasons and necessity of assuming representation. 6- Last confirmed financial report of the principal foreign company. 7- Introduction letter of the related ministry. Article 6: The persons, whose activity permit is canceled by the competent authorities, are bound to adopt measures for winding up and liquidation of the branch or representative office within the time limit set by the Office for Registration of Companies and Industrial Property. Note- The (branch or representative of) companies whose activity permit is not extended, shall have a grace period of 6 months to take measures for dissolution and liquidation. Article 7: The branches of the foreign companies which have been registered for activity in Iran, are bound to render the annual report of the principal company including the financial reports audited by the independent auditors in their home country, to the related governmental organization every year.

5 Article 8: All the natural and juridical persons subject to this by-law, are obliged to send the related governmental organizations a report of the activities of the branch or representative in Iran, together with their audited financial statements within 4 months after the end of the fiscal year. As long as the by-law of Note (4) of the Law Concerning Using the Specialized and Professional Services of Competent Accountants as Official Accountants, approved in 1994, is not ratified, the aforesaid auditing shall be done by the Auditing Organization and auditing institutes which are recognized by the related governmental organization and their partners are natural persons approved by the Supervision Department of the Auditing Organization. Article 9: The branch or representative office registered in accordance with this by-law should be managed by one or a number of natural persons residing in Iran. CANOUN Article 10: In order for foreign companies to enjoy the privileges of this bylaw and for continuation of their activity, the foreign companies which have been active in Iran through their branch office or representative up to the time of this by-law going into force, are obliged to render the information and documents subject of Articles 3 and 5 of this by-law to the related governmental organizations and bring their operations into conformity with the by-law.

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