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CONTEXT AND TRENDS
It's hard to talk about Iran without mentioning trade sanctions restricting the sale of its main exports, oil and gas. Imposed by the US in an attempt to force Iran to cancel its nuclear programme, the sanctions have had the desired effect of crippling the economy without achieving the real goal as Iran has refused to bow to US demands....

CONTEXT AND TRENDS

It's hard to talk about Iran without mentioning trade sanctions restricting the sale of its main exports, oil and gas. Imposed by the US in an attempt to force Iran to cancel its nuclear programme, the sanctions have had the desired effect of crippling the economy without achieving the real goal as Iran has refused to bow to US demands. Invariably, this impacts business and has culminated in foreign clients pulling out of the country. "We have four oil companies which have either divested or are in the process of divesting," says one partner. Businesses, which manufacture parts for the energy industry, are also cancelling contracts with the government. "It looks likes crunch time for both sides. The West knows Iran is not Iraq. It's not a country, which can be so easily overrun and subsequently controlled. Also, the Iranian's economically are in a particularly tight spot. All these contracts being cancelled must be biting. You have power plants for which you need spare parts and you can't get them so you have to close them down or find another supplier which in the current climate is very difficult."

Despite the uncertainly, lawyers note that there is still activity in the non-contentious sectors like food and drink and with the mandates for clients exiting Iran, one firm reports a "record year". Conversely, it is also considering contingency plans. "There are very few lawyers in Iran to provide this service. I don't think we'll ever get to the point where we're doing absolutely nothing but we might get to the point when the amount of work we do may not justify the expenses we have," remarks one.

On the legislative side, a draft of the new commercial code is desperately needed according to lawyers. "The corporate side of it was written in 1969. You have these archaic rules which you don't have in any other jurisdiction it really needs an update," notes one lawyer. "At the moment, if you want to register companies its not a one stop shop, you literally go in, you have to go from one official to another. You literally have to see 10 people and this increases the scope for corruption – the more people that interact with the public, the more chances there are for people to ask for something extra." A provisions allowing for single shareholder companies is another notable omission from the current law.