Chabahar Free Zone business by mmcsx


									              Chabahar Free Zone

    Chabahar Free Zone business
         (Special edition for Turkey)

      Chabahar Free Zone Organization·

                       Chabahar Free Zone business opportunities

    A-Introduction to Free Trade-Industrial Zone
    Chabahar Free Zone has been established in 1992 according to 1ran's law on the
    establishment and administration of free trade zones. Public controlled Chab*ar Free
    zone Organization is in charge of administering of the zone which is exercising on
    investment attraction in many fields including transit and transportat:lon, :tourism,
    industries, education and infrastructures to develop a 14000 hectares free zone.

)   B-Geographical position
    Chabahar Free· Trade Industrial Zone is situated in 60 degrees and 3 7 minutes east
    longitude and 25 degrees 17 minutes nonh latirude in tbe south eastern proivince of
    Sistan va Baluchistan in coastal city of Chabahar on the shore of Oman Gulf.

    C-About Chabahar Port
    Chabahar as the most important port in the south east of Iran is situ.ated on t.lte :shore of
    Oman Gulf. And it is the only port that has direct access to open seas (Indian Oqean and
    Arabian Sea).Chabahar's strategic location placed it in ·great importance i for the
                                  .                                                     I

    development of trade and transit .closeness of the port to the land locked coun¢es such
    as Afghanistan and Central Asia will change it into a major transit and logist:i~ hub for
    both Iranian and aforementioned land locked region .government of Islamic r~ublic of
    Iran has planned some major development projects such as port develop~ent and
    railway construction that will enable Chabahar to change rap!dly after corrtpletion.
    North-south transit and east-west transit development are major goals that are being
    followed by projected plans.

    D-Chabahar weather
    Chabahar is located in an arid region v.rith hot and humid summer, mild winter and vezy
    little Arumal precipitation. In summer monsoon winds from Indian subcontinent affect
    Chabahar and in winter Mediterranean currents bring bought scattered rain falls.
       Chabahar Ftee Zone Organization

                                    Average seasonal weather of Chabahar.
    Weather indicators                                              Qul'u'ltity
    Average daily temperature(C)                                    26.1
    Averagemaximum temperature( C)                                  30.1
    Average minimumtem~r'ature( c }                                 22.2
    Maximum absol~t~ tei"T)Perat~o~re( C)                           47
    Minimum ;1bsolute. tetnpeta~ure( C)                             7
    Averige claily terl'lp¢rat.U:re of the warrnest m!)l'lth( c )   31.4
    Average daily teJr!perature of thl! coolest    mQnth/ C )       19.8
    Aver<ige relative moisture                                      72%
    Average rainy days in a year                                    11).3 days
    Average windy day$ in a year                                    4.3 (jays
    Average windy and dusty days in a yeat                          29.4 days

    E~Chabahar         free zone regulation

    Similar to other Iranian free zones, Chabahar free zone also enjoys independent sets of
    regulation and action codes that have. been passed in parliament .for more information
    please visit at:

    F- Infrastructures and FaCilities

       •     Water

           Chabahat free zone's water is being provided by desalination plants. One private
           desalination plant located in Tiss village with in free trade area and another public
           plant with large capacity is in Chabahar-Konarak road on the sea shore .River dams
           are other major resource of securing water for human and industrial purposes. In
           early 1990's government built a dam on Bahukalat River in Pishin (about lOOkm
           north east of Chabahar) and pipelined water to Chabahar that is in operation
           .another dam completed on Kaju River in zirdan and its water will be connected .to
           Chabahar in near future.

           Until today about 65.5km water rustribution network and 12.5 water pipeline has
           been established in. Chabahar free zone and there plans to develop it in next years

       •     Sewage treatment
           There are about. 45 km sewage treatment network and free zone organization has
           other development plan. in hand.

                                .    ;   ..
~    Chabahar Free Zone Organization

     •      Power
         Chabahar Free Zone is connected to national power network with enough capacity
         to suppon many indusnies. A 315 Mega watt power plant is built in Chabahar and
         there is another power plant with same capacity in Iranshahr that can secure energy
         for many activities. Chabahar free zone organization has built 178Km of power
         transmittal network and planned for development of current network.

     •      Energy

         Energy for industries in Chabahar is a subsidi2ed energy that is being supplied by
         National Iranian Oil Products Distribution Company (NIOPDC). Chabahar isn't
         connected to any energy network but there are plan· to Quild a branch pipeline from
         proposed Iran -India gas pipeline .today diesel is the main fuel of industries.

     •      Land

         Government has approved about 14000 hectare of land for Chabahar free zone.
         According to the master plan those lands. is divided into 9 specialized parts for
         different industries from small to nlidsized, light and large activities. About 1000
         hectares is ready and about 500 hectares are under the completion .Chabahar Free
         Zone Organization has constructed 5600 square meters of warehouses for storage of
         different commodities and. building of 21000 sqm of roofed spaces and chilling house
         and 20000sqm open space warehouses is under way. In addition kalantari and
         bah~shtijetties have 22200sqm special warehouse spaces.

           For speeding the building of infrastructures Chabahar Free Zone Organization is
         . seeking cooperation and investment of foreign companies to build readJ-made rental
           industrial estates and factories.

     •      Information and Telecomnumications

         As per importance of commun,ication sector, Chabahar Free Zone Organization
          established an independent telecommunications company that provides phone,·
          mobile and intemet services for industries and individuals in Chabahar Free Zone
          after registration of company, every investor can go to company and request for
          telecommunications services.
        Chabahat' Free Zone Organization

        •        Connections

             Chabahar is connected through Air, Sea and Roads to multimodal transportation. Its
             Konarak Airport bas twice daily flights to the capital Tehran; thrice weekly flights to·
             Zahedan and twice weekly flights to Ma$hhad, Shitaz and Ban~r Abbas.· It has also
             a weekly international flight to Doha and Pul>ai attd a biweekly flight to Mascat.
             Chabahat has two jetties that connect it to international waterways. Iranian
             contractors are developing both jetties to provide port facilities for handling of 6
             million tons of goods a year; this is expected to be completed by 2011. Chabahar is
             connected to national road networks. Chal,>abar-Banda:f Abbas, Chabahar-Iransbahr-
             Kennan, Chabahar~lran.shahr-Zahedan-Mashahd and Chabahar-Ira.nshahr-Zahedan-
             Milak(in Afghanistan border) are four main routes connecting Chabahar to national
             and international roadS.
              Government is pursuing a multibillion dollar railways project which was named
              "Iran's eastern corridor" by President Mah:rnud Ahtnadinejad. · It will connect
              Chabahar port to Central Asia, Afghanistan and Central Iran. This project would
              have three branches including cbabahat-iranshahr-~alttaj, Cbabahar·Iranshahre-
              Zahedan-Mashahd and Chabahar-Iransha.h:r~Zaheda:n-Milak.

         •       .Port facilitie$

         1-s)H:cial facilities for handling and transportation of goods

                  The least handling time for ships
                 The lowest warehousing and storage costs and availability of vast spaces
                 The least tariff on ships and oommodities in. fran
                 Capacity for handling of 100 thousand tons ships

    )            Special dis<;ounts and services:

        >         Repayment of land transport cost from Qijtbahar Free Zone to commodity owner's
                 warehouses in Iran
        >        Exemption from TIIC cost for the transshipment of goods from Bandar abbas to
                 Chabahar Free zone
        >        Exemption from THC cost in Chabahar if commodities ~port to Chabahar Free ~one
        >        Three month of exemption from warehousing costs
        '>       Issuing certificate of origins confinned by Iranian customs .
        }'       Issuance of different warehoUsing receipts confirmed by Iran tan customs

             •    All of above mentioned discounts render to commodities with custcm tax higher tban
              19% of ClF value

        )o-       Modem handling services and equipments

         .       ~           Chabahar Free Zone Organization

                                 •         Jetties and warehouses

                           }:>             Jetties

                 I       Name                                  Type                     No of posts.   Length{M}        Depth(M)          Capacity
                 J   Shahid 8aheshti                       General cargo                    3            150                 9.S          25000
                 I                                              oil                          1           150                 8-9           40000
                 !                                         General cargo                     1            286       16(after dredging )   100000 I
                 ; Shahld Kalantarl                  Traditional general cargo               4.           120               1.5-4         50-5000
                 i                             General cargo with con<:rete shipboard        1            186               12.5           45000

                                           Warehouses with in Chabahar Free Zone(in Square Meters)
                                                 Container yard- D               Roofed Warehouses                         hangars
                                                      36000                             15000                               1800

                           );-             Warehouse in Shahid Baheshti and Shahid Kalantari jetties(in Square Meters)

                                                           Roofed spaces                                           37000
                                                             Open yards                                            400000

                          G-Chabahar Free Zone Economic Sectors
                                         Economic of Chab.ahar Free zone is formed of 6 major sectoral activities, including:
         J   \
                                         commerce, industries, infrastructures and urban development, tourism, transport
                                         and transit and education. Details about sectors comes bellow

                                     •      Commercial sector

                                         This. sector is formed of commercial complexes with ready rental offices and rentaJ
                                         shops for establishing companies, wholesale and retail shops of different
                                         commodities including cosmetics, home appliances, mobile phone, personal gadgets
                                         and ... , Everyone including foreign commercial SMBs can establish trading activities
                                         within Chabahar Free zone, this opportunity gives small, medium and even large
                                         companies a chance to showcase and sell their products to large number of daily
                                          visitors from Chabahar Free Zone.
    Chabahar Free Zone Organization

    "     Industrial Sector

        This sector is currently formed of small and rnidsized industrial activities including
        tea packing, flour making, vegetable oil extracting, foam making, sugar cubes, shark
        fin drying and packing, engine oil refining, motorcycle assembly, rebuilding different
        machines such as photocopies, boat engines, electricity wares such as outlets
        and ... according to the master plan door is also open for large industrial activities
        such as petrochemical units, large fishery processing units, large food processing
        unirs such as dates processing and ...

    •     Infrasttnctures and 11I'ban development

         InfrastructUre is main part of every economy and Chabahar Free Zone is not
        exceptional, with understanding this facts during past years Chabahar Free Zone
        organization developed infrastructures including urban, industrial and commercial
        infrastructures but because of the needs in Chabahar visionary investors can find
        golden opportunities in infrastructures sector in Chabahar Free zone {seek
        opportunities in investment opportUnity sector of this paper)

    •      Tourism
        Chabahar Free Zone is a major visiting place for Iranian tourists and in holidays
        especially Newrooz, Chabahar is one of the most crowded cities in Iran. So that
        tourism sector in Chabahar is being developed and there are many opportunities
        beyond this development including building of ·hotels, entertainment units
        (according to Iranian moral standards), food providing restaurants and cafe

        For the future because of intemational presence ill Chabahar there will be more
)       other business opportunities in Chabahar tourism sector.

    •      Transit and transport

        Transit and transport is the major sector of Chabahar Free Zone and major focus of
        Free Zone Organization for building a soaring economic in region. Special and
        strategic location of Chabahar Free zone on the shore of Oman Gulf and near the
        international wat~~ys and its closeness to newly independed land locked states in
        Central Asia and Afghanistan allow Chabahar Free Zone to develop a main logistics
        center in region. Investment in this sector is highly requested and large projects are
        in wait of investment such as Chabahar-Zahedan-Mashhad railway, Chabahar
         international airport, research, advisory and building a logistics park (ppp model) in
         Chabahar free zone.
.   ~     Chabahar Fn:e Zone Organization

           •         Education

                   Education is a part of every developmental activity, so that in 2002 Chabahax Free
                   Zone organization established an education arm which named a$ international
                   university of Chabahar that is partnered with universities in Iran and abroad and
                   offering education in many commercial and technical fields .In the current year
                   Chabahar Free Zone changed its policy to build an academic city which allows every
                   university to open branch in Chabahll(. This will open an opportunity for foreign
                   universities to build their own branches in Chabahar.
                                                 .  .                       .   "

                   Iran is education t:hirsty country and annually thousai}(is of Iranians are migrating to
)                  foreign countries for education, foreign credible universities can gain more benefit if ·
                   they open branch in Iran.

        H-Investment incentives. and oppqrtunities
               •     Special advantages

         >            Strategic geographical positio:z:t, close to the international waters
         ).-          The single commetciallrani~ port out oftl,\e Str~it ofHormoz
         >            Connectingpoint.ofL"all's Easter,Q. (:orrldor to·the sea
         >            Closest port to Central Asia ~Afghanistan markets
         > · Easy access to fossil energy reso\irces ·
         > Access to water, Power and.
         > Easy access to construction tnatetihls and cheap spaces
         ~            Low wage$ and abundant. work force        .
         }            Access to the different kinds of mineral resources in eastern Iran
         >            Multimodal connection to arr, roads and seaports
         ?            Long-tetm land leasing facilities     ·
               •      Regulative facilities and p:ri'rileges

                      100% foreign oWnership ·               .                          .      .
                      Guaranteeing of foreign investments against nationalization and conftscatmn
                      1000/o capital and profit repatriation
                      100% ina:nne and corporate tax exemption for 20 years
                      duty e"em.ption for importing of raw materials and machineries for manufacturing units
                      and construction purposes          _
                      Exemption of exporting Free Zone-made goods to foreign markets from general BXIM
                      regulations                                                 .
                       Duty exemption of expotting Free Zone~made goods to mainland to the extent of value
                      added caused 'by utilization of domestic productiou factors
                       Every company can secure 10% of its workforce from abroad
                       Flexible labor regulations                           .        .          _       .
                       Unloading, loading, transit alid Transshipment of merchandises abroad ts permttted and
                       it is Free from all kinds of taXes and duties, only warehousing and local charges shall be
   Chabahar Free Zone Organization

);-           Retail sales allowed
J>            Insurance and ba:riking opeyation allowed
}>            S~-month extendable residential visa
)>            Visa issuing facili~es at airport by foreign ministry representative ·
J>            Invitation for visa by Chabahar Free Zone organization is available

       •      Investment opportun:lties

)>            Establishment of specialized commodity markets
>             Establishment of ICT service providing centers
)>            Establishment of investment and marketing consultancy scrvi~;e~
>             Establishment of fisheries and related industries
>             Establishment of packaging and related ind,ustries for r-export
);-           Establishment of agri-products processing units
>             Establishment of assembling industries
>             Establishment of accommodation and leisure centexs
).:-          EStablish:Jnent of trade exhibitions
>             Establishment of air, sea and land, transport companies
>             Establishment of ready- built industrial estates ·
>             Establishment ofready·built and standardized warehouses and manufacturing halls
};-           Establishment ofready-bui)t factories for rental
»-            Establishment of rental cltilled storage units
)>            Establishment of vegetable oil storage
>             Establishment of meat processing park
>             Establishment of health city
):>           Establishment of academic city
>             Establishment of entertairunent and accommodation units
~             Establishment oftransportand tranSit networks to/from Central Asia and Afghanistan
):>           Providing of logistics services      ·
~             Providing of insurance and banking operation
~             Providing oftechnical.and engineering services               .
>             Building of rental residential complexes for foreign investors and workers
>             Building of rental residential complexes for geneyaJ use.

       H- Know-how of investment in Chabahar Free Zone( for foreigners)
       "'     Investment licenses:

            Every individual who want to invest in Chabahar Free Zone should obtain an
            investment license from Free Zone authority. There are 5 types of investment
            licenses available, including: transport and transit, service, trade (commercial),
            industrial and tourism.

       •      General procedures for starting an inve~tment activity in Chabahar Free Zone:

            1-Rendering a request for investment to the investment division of Organization

            2-Rendering a feasibility report for proposed investment to the investment division
        Chabahar Free Zone Organization·

         3-Announcing ways of procuring raw material and machinery (for industrial
         activities) to invest

         4- Land lease or leasing of manufacturing and warehousing spaces and
         administrative offices (every investor can lease from both public owner (Free Zone
         authority-investment division and urban divisions) and private owners)

         5-Rendering a request for selection of company name (it includes filling a simple
         fonn and rendering it to company.registration office)

         6-Rendering a request for investment :iicense(it includes fillmg a siinple form and
         rendering other necessary documents such as original cqnfirmed selected name
         certificate, copies of identity documents, copies ofleaskg deed and ... )
         7- Obtaining investment license and registering of company or branch respectively in
         investment division and company registration office

         8-0btainig an exploitation pennit from investment division .Cit will be issued directly
         after registration of company for non~industrial activities but for industrial activities
         company should conduct a test production and report it to investment division)
         10-0btaining business card from Chabahar Free Zone chamber of commerce
         11-sarting activity

         12-obatining work permit and 6 month visa residence for foreign workers and

        Chabahar Free Zone Organization

{• All of above mentioned procedure are doable for only about 2 weeks.

        •      Cost table:
                 Cost Name                        Cost Type                             '*Price{IR-Rl31s)/Sqm
              Industrial land                       Industrial                                    8SORials
      Manufacturirlg halls, w<:~rehouses    For All kind of activities       There are 180,120,90an~ 60 sqm w<Jrehouses
                                                                                       and halls with respectively
                                                                               15000, 1ZOOO,l6500,18000Rlals per sqrn
                                                                               Private properties lease are according to
                                                                                        f!Uct!Jating market prices
                 Ready offices              For All kiod of activities           According to fluctuating market prices
                 VIrtual office             For AI) kind ofactivities                         BOO,OOO!Uals
                   Electridty                       Industrial                Iran's average subsidized prices are 206Rials
                                                   Residential                Iran's average subsidized prices are l6SRials
            Water for industrial use                                           Average prices sOQQRials per cubic meters
        sewage treatment tributary                                                    350 Rials per cubic meters
          Investment license per                   Services                                    3500Rials
       square/meter of activity place             Industrial                                   2,000Rials
                                            Tourism and hospitality                            1,500R1als
                                                  Commercial                                   30,000Rlals
                                                  Warehousing                                  7,000Rials
                                                    Transport                                  ~,SOORia!s
                                               Engineering and                                 3,500Rials
                                              contractors offices

 I    Extending of Investment licenses
                                            Banking, Insurance and

      Company and branch registration                                                        3,800,000Rials

  :          Institute registration                                                          1,900,000Rials
  j Registration of changes in company                                                        GOO,OOORials
  ·                 and ...
         Plumbing of book accounts                                                            250,000Rials
            Dissolution of company                                                            250,000Rials
      Commodity taxes for importing to      Different goods excluding                        6% of CIF value
             free zone area                     cars and cigarette
                                                 Raw material for                               Exempted
                                             Productipn machineries                             Exempted
                                             Construction materials                        3%-6% of OF value
                  Telecommunication                   phone              i          1200,000Rials for primary branch
                                                     internet                According to market prices by service providers
                                                     Mobile              l   According to market prices   by service providers
                     .                  .
      • Note: All Pndes are In !raman RiaL
  Chabaha:r Free Zone Organization

Appendix: Business opportunities for Turkish investors in Chabahar free zone
Turkey is the most developed neighboring country of Iran and so that have many
potentials to do with business in Iran. Chabahar Free Zone is one of the key locations
that can provide Turkish business entities with profitable business opportunities. During
past decade Turkish investor presented in Chahahar Free Zone and Turkish brand and
products also have theix market in Chabahar Free Zone. Presence of some major brands
such as BEKO and JESUR are obvious 1 but real business opportunity for Turkish
investor is far beyond this small presence and they should move further .Some of key
business opportunities for Turkish investor are mentioned bellow:
1- Transit of transportation between Asian markets and Turkey through Chabahar by
establishing shipping lines, commodity depot and land transportation
2- Investment in tourism sector specially hotel and restaurants
3- Investment in construction sector specially ready built warehouses, manufacturing
halls and industrial cities for leasing to small investors
4- Meat processing park
5- Dates processing park
6· Gems and jewelry park
7- Fisheries processh"lg park
8- Textile manufacturing and designs
9- Small business machineries supply
10- Establishing Turkish special commodity market

For more information please contact:
Chabahar Free Zone Organization, investment advisory unit, Chabahar Free Zone,
Chabahar, Iran

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