The July 2015 nuclear deal between Iran and world powers is a bright spot for investors at a time of slow global growth. Iran has agreed to restrict its nuclear programme in return for relief from sanctions. This agreement is expected to come into effect mid-2016 (“Implementation Day”). In the near term, this will open the door for European companies to a resource-rich country hungry for Western goods. Yet, continued sanctions and a complex domestic landscape suggest Iran will remain a difficult and risky place to do business.
- Although European companies will be mostly free to engage with Iran after Implementation Day, residual sanctions in the US will complicate matters.
- Companies able to undertake market entry studies before sanctions removal will be best placed to succeed in Iran.
- Residual sanctions and reputational risks make local partner selection crucial to doing business in Iran.
- Iran will be a difficult place to do business even after implementation.