Real Estate in Iran

 

Is it possible for a foreigner to purchase an immovable property in Iran?

The above question, is the most frequent inquiry that I have received from my non-Iranian friends.

Real Estate in Iran Law

Real Estate in Iran Law

To answer this question, we have to refer to the Regulations on Acquisition of Real Property by Foreign Nationals (1948).

According to Article 1 of the above Regulations, a foreigner who is willing to have a real property for residence, business or industrial purposes, shall submit his/her request in the form of a declaration letter to the local Real Estate Registry Office.

The declaration letter, should have the following information:

  1. Personal, professional and family information of the applicant;
  2. Entrance date to Iran, duration of residence and locations of residence;
  3. The reason of ownership by specifying whether it is for residence, business or industrial activities;
  4. The detailed information of the appointed property;
  5. The clean criminal record;
  6. Permanent residence permit.

Important Note:  

The foreign applicant must undertake in the declaration request to transfer the property to a third person within a duration of six months since leaving Iran permanently. Otherwise, the authorities will sell the property in an auction and give back the sale price to the owner.

 

Foreign legal entities who are willing to have a property in Iran

For the foreign companies who are willing to purchase a property for their business in Iran, the process is almost similar. The companies should provide the Registry Office with the following documents:

  1. The information of the legal entity;
  2. The information of the appointed property;
  3. Certain amount of money as deposit to guarantee the implementation of the transfer after leaving the country.

 

Permission of the Ministry of Foreign Affairs

The application, after having reviewed and confirmed by the registry Office, should be sent to the Ministry of Foreign Affairs. The Ministry will make the final decision regarding the acceptance or refusal of the application.

 

What is the practical solution for a foreigner who wants to buy a real estate in Iran without having the difficulties of the permission?

It goes without saying that the above process for achievement of the permission for purchasing an immovable property in Iran is complicated. Moreover, the risk of rejection by the authorities exist more and less.

So, what is the solution?

There are two different solutions for a foreigner who wants to buy a property in Iran without completion of the process of permission:

  • It is possible to purchase an immovable property through a non-official agreement drafted by the real agencies. You should now that according to the Iranian law, the immovable property should be transferred through official agreement signed before the Notary Public Offices.

 

Therefore, any agreement signed in the form of non-official transaction, doesn’t change the real owner of the property, whose name is mentioned in the official deed.

 

As you can see, the risk of purchasing a property through a non-official agreement is high.

 

  • The second option is to incorporate an Iranian company. According to the Iranian law, it is possible for a foreigner to incorporate a company in Iran with 100% of its shares being owned by him. Therefore, it is a shortcut for a foreigner to register an Iranian firm and then purchase a real estate under the name of this company as the purchaser.

Comparing the above two options, we may conclude that the second option is more unfailing and trustable.