Around a fortnight after the majority of economic sanctions imposed on Iran by the US and the EU were lifted, CMS has become the first sizeable international firm to open a branch in Iran.
Two partners from CMS’ German branch, CMS Hasche Sigle, have relocated to Tehran. Corporate lawyer, Jürgen Frodermann, who focusses on private equity, M&A and restructuring, and energy specialist Shaghayegh Smousavi will lead the firm’s nascent practice.
The firm has said in a statement they will be supported by a team which will include Iranian lawyers but did not elucidate any further.
The UK based outfit, which officially launched in Tehran yesterday, cannot claim to be the first foreign firm to enter the country. CMS was beaten to this accolade by Devon outfit Everys’, which acquired a small local firm last year to give it presence in the country.
Commenting on the development, CMS executive chairman, Cornelius Brandi, said Iran’s demographics, logistics and resources made it an attractive choice for the firm. “This is a large country with a very well-educated and young population, which is open for travel and well-connected internationally,” he said. “We see many opportunities, especially in energy, technology and automotive.”
CMS has already been active on a significant transaction in Iran this year. Last month the firm advised Iran Khodro Diesel, a subsidiary of the largest vehicle manufacturer in the Middle East, in negotiating a joint-venture agreement with Daimler to produce Mercedes Benz trucks locally.
Ever since the prospect of lifting sanctions on Iran began to look realistic last year, the arrival of foreign firms has been anticipated. Last summer, local lawyers confirmed there were international firms expressing an interest in cooperation of some sort. Clydes, Eversheds, Pinsent Masons and Stephenson Harwood are among those that have been reportedly considering moving into Iran.
One clear benefit of the country in comparison to a number of other jurisdictions in the Middle East are the limited restrictions on the practice of foreign lawyers in Iran. As CMS has demonstrated, international firms are entitled to establish independently removing the issue of finding a suitable local firm to partner with.
CMS has an extensive international network, but is relatively small and young in the Middle East, with Tehran only its third base in a region it has only had a presence in for around three years. The firm launched its first regional outpost in Dubai in 2012, adding its second in 2014 in Oman.