Employer Of Record in Iran

We make it easy and painless to expand your business into Iran. Forget about dealing with local regulations, confusing tax laws and international payroll management. We take care of all that so you don't have to.

Accelerate your growth into Iran
Compliantly and hassle-free

At Serviap Global we handle all employee onboarding, payroll, compliance, risk, mitigation and benefits, so you can focus on what matters most – your business.

How we can help you expand in Iran

As your EOR in Iran we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary. 

Your candidate is hired by a PEO in Iran provider in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. Shortly after, your new employee will be working for you, just like any other member of your team.

Expand to Iran with Serviap Global

Through our PEO and EOR services, you can hire qualified talent in your industry without the trouble of opening your own legal entity. 

In just a few days, you can easily and safely build a presence in Iran being sure that your staff will be hired in compliance with labor and tax regulations.

Table of Contents

Quick Facts

Currency:
Iranian Rial (IRR)

Capital:
Tehran

Payroll Cycle:
Monthly

Language(s):
Persian

Iran Country Facts

Visitors to Iran say it’s one of the most welcoming countries you could experience. Historically, it was very hard for foreign businesses to make inroads in Iran. That is changing and as such they have an improved ranking on the ease of doing business scale, according to the World Bank.Research shows most Iranians hold a positive attitude about the American people but not about the U.S. government. Many Iranians move to Europe, Canada and the U.S. to pursue higher education and good career opportunities, so there are personal connections between these peoples.

The Economy

Iran’s economy is mixed. The oil and gas industry remain key drivers of the economy and many such enterprises are state owned. Followed by agriculture and services sectors. There’s a noticeable state presence in manufacturing and financial services in Iran. Wages remain very low for Iranian workers. Social Security insurance is required for most employees and it generally falls to the employer to pay.It is also very difficult to fire or otherwise terminate an employee in Iran. Breaking any portion of the labor code is punishable with a fine or even imprisonment.

The Importance of Small and Medium-sized Companies

SMEs in the Islamic Republic of Iran outnumber large companies by a wide margin and also employ more people than the big corporations. Ali Yazdani, CEO of Iran Small Industries and Industrial Parks Organization (ISIPO) says small businesses’ contribution to the industry sector stands at 94%, but amounts of investment dedicated to the sector are not proportionate to the sector’s share of the economy in general.

Population Characteristics

Iranians speak Persian (or Farsi) originally related to Sanskrit and ancient Greek.About 53% of Iranians speak English with some proficiency. Many signs in the country are bilingual – including the English translation. Literacy rates stay around the 85% mark.The infrastructure in Iran runs smoothly, and people are well educated.

Economic Opportunities

The World Bank ranks Iran as an upper-middle income economy. The country is business friendly, but many know that foreign investors must be ready to meet the very strict rules and regulations of the country. The Islamic Republic of Iran’s government is unusual because they base it on religious guidelines. Other governments in the same region adhere to Islam and Sharia Law, but are not completely controlled by it.

Key Sectors of the National EconomyThe key sectors are:

  • Oil- and gas sector
  • Financial services
  • Agriculture•Services sectors
  • Manufacturing

Human Talent
Iran is growing in population, and many people are flocking to urban areas. The United Nations predicts that by 2030 80% of Iranians will live in urban areas. Iran also has many of its citizens living in the US, Canada, and Europe. Relationships continue between the people living in and out of Iran, so a cultural link remains. Like the economy, Iranian business culture is a mix, markedly there are both traditional Islamic inspired values and western norms and customs.

Prominent Cities for Business

Following the 1979 revolution, the Islamic Republic of Iran tried to block out western values and ideas from its population. However, relationships with people outside of Iran, both business and cultural, meant western influences continued to impact Iran’s society.

  • Tehran
    Is the capital of Iran and its largest city. It’s the economic and cultural center of the country. It’s also the anchor for the country’s communication and transport network.
  • Isfahan
    This is home to many historical sites and home to the world’s seventh largest shopping mall, Isfahan city Center.
  • Ahvaz
    Ahvaz has some of Iran’s most important companies located within, they include The National Company for Southern Oilfields which is the largest oil producer in the country, The National Iranian Drilling Company, plus one of the largest producers of crude steel in the country, The Khuzestan Steel Company.
  • Qom
    Qom’s proximity to Tehran has allowed the clerical establishment easy access to monitor the affairs and decisions of the state. Many Grand Ayatollahs possess offices in both Tehran and Qom; many people simply commute between the two cities

Technological Ecosystem

Iran’s oil sector is tying in with technology moving forward.Tehran’s Oil Tech Park, which is affiliated with the Oil Ministry, has signed four collaboration agreements with domestic technology entities to use their smart solutions in the oil sector. Iran’s knowledge-based and creative ecosystem has a high capacity to make inroads in export markets.Export interactions should shift from government to government, to business with business.

Facilities for Foreign Investment

The Foreign Investment Promotion and Protection Act (FIPPA) aims to encourage foreign investors to bring their capital to Iran’s business market. FIPPA offers incentives and vehicles for foreign investors. Those investors must apply for the FIPPA license. A FIPPA license is the most valuable permit that the Iranian law grants to the foreign investors in Iran.

Business Culture in Iran

The Iranians are a proud people

  • English Speakers
    Business meetings and discussions are increasingly conducted in English, but for some negotiations, it is necessary to hire an interpreter.
  • Sincerely Polite
    Iranian culture is characterized by politeness, which from the outside might seem superficial. Politeness is, however, imperative for creating a good dialogue and building trust.

Iran Gastronomy: regional and traditional cuisines

Chelow kebab comprises fragrant, saffron-spiced rice, grilled tomatoes, and kebab, which one can prepare with minced or sliced meat. The serving of chelow kebab is a unique experience: they serve rice and tomatoes first, followed by meat, while the final touch is a dollop of butter that is placed on the top of saffron rice.

Khoresh is a universal term which refers to a huge group of flavorful and versatile Iranian stews. Meat versions often incorporate poultry, lamb, or beef, but many use fish, vegetables, and lentils as the key ingredients.

Kuku ingredients may vary, but it’s basically a thick egg omelet. Typically pan-fried, these dishes are predominantly vegetarian, although some varieties occasionally include meat. 

Naan berenji are light and crunchy Iranian cookies made with rice flour. Rose water or cardamom are used to flavor the cookies, then they’re decorated with poppy seeds, pistachios, or barberries.

General Highlights

Year2022

 

Country

Iran

Islamic Republic of Iran

CapitalTehran
Num. States / Province31 provinces
Principal CitiesTehran, Isfahan, Ahvaz and Qom
LanguagePersian
Local Currency

Iranian rial (you’ll also find currency called

toman)

Major ReligionZoroastrian, Jewish and Christian
Date Formatyyyy/mm/dd
Thousands Separator Format99,999,999.99
Country Dial Code+98

 

Time Zone

Iran Standard Time ( IRST)

Iran uses a UTC offset UTC+03:30

Population84 million
Border CountriesAfghanistan, Pakistan, Iraq and Turkey
Continental surface1,648,000 km2
Fiscal YearMarch 21 – March 20
VAT %9%
Minimum Wage611,809 rials/day (approximately $14.50 USD)
Taxpayer Identification Number Name in the countryITIN
Current PresidentEbrahim Raisi

What you need to know about employing personal in Iran

Laws and Agencies that regulate labor relationships

LawsBrief Description
Labour Code of 20 November 1990The Labor Code governs both public and private sectors.

 

Iran Labor Law

Ministry of Labour and Social Affairs

Islamic Labour Councils

 

 

 

Iranian Tax Code

The Tax Code of Iran has five different chapters as follows:

•       Taxable Persons;

•       Property Taxes;

•       Income Tax;

•       Miscellaneous Provisions;

•       Tax Assessment Organization;

 

 

 

 

 

 

 

Workers’ Welfare Services

Sec. 147. The Government shall provide health and medical services for workers and farmers covered by this Code and their families.

Sec. 148. Employers whose workplaces are subject to this Code shall insure their workers under the Social Security Act.

Sec. 149. Employers shall, whenever necessary, cooperate with housing cooperatives if they exist and, if not, cooperate directly with homeless workers in order to provide them with suitable private housing.

Furthermore, according to law, employers of large workplaces and enterprises must build housing facilities in the workplace’s vicinity or in other suitable places.

The total amount of SSO fees in Iran is 30% of the salary of the employees. The employers shall pay 23% of this amount and 7% is the contribution of the employees which is deducted from their salaries and paid to the SSO directly by the employers.

 

 

Social Security

Employers must pay for the social security fees of their employees. Welfare and social security of the employees –

Employers are obliged to insure their employees in accordance with the provisions of Iran Social Security Act.

Key Tax and Labor Authorities

Iranian National Tax AdministrationThis handles the tax in Iran.

 

The Supreme Labor Council

 

This oversees much of the laws governing the workplace.

Labor Contracts

 

 

 

 

 

Iran Labor Law

An employment contract shall specify the following information:

•       (a) The type of work or occupation in which the worker will be engaged or the duties that he must discharge;

•       (b) The basic salary or wage and any supplements thereto;

•       (c)  Working hours, holidays and leave;

•       (d) The workplace;

•       (e) The date of signing of the contract;

•       (f) The duration of the contract, if it is for a fixed term;

•       (g) Any other matters required by custom and common practice in relation to the job and the locality concerned.

Contracts

Employment Agreement

Employment agreements must be in writing. An oral agreement is only allowed when the work will last only one month or less.
The International Labor OrganizationIran is a member.
Work Hours44 hours/week but only 4 hours on Thursday.

Payroll

Minimum Wage611,809 rials/day (approximately $14.50 USD)
OvertimeOvertime should be calculated at 40% of the hourly wage of an employee, at a minimum.
Annual BonusNot mandated
Occupational risk insuranceNot mandated
Vacations or PTO

Employees have the right to approximately 22 days of paid days off for

official state holidays plus Fridays

Employees also have the right to a one month leave per year or 2.5 days per month.

Leaves of Absence

Employees have the right to paid absences for the following things:

•       Annual paid leave – For workers employed in difficult or hazardous jobs, leave is five weeks. Using this leave shall, if possible, be in two stages and at the end of each six months work.

•       Every worker has the right to use only one month as a paid leave along with an unpaid leave in order to perform his duty for the obligatory hajj during his entire time at work.

•       Marriage. – 3 days

•       The death of a spouse, father, mother, or child – 3 days

•       Pregnancy and maternal leave:

Female workers will get 90 days all together. They must use 45 days of leave after birth. For the birth of twins, 14 days will be added to the duration of the leave.

Employers Contribution or Labor Cost

Annual Taxable Income

Over this amountNot over this amountTax % on Excess
 4,090 EUR17%
4,090 EUR28,600 EUR10%
28,600 and above 20%

Corporate Tax Rates

Taxable Gross IncomeTax Rate
Flat rate25%

Disability 

For a disabled employee, the employer must pay 30 days salary for every year that they served the company. If the disability of the worker is due to work conditions, then the employer owes 60 days of salary for every year of the employee’s service to the company.

Public Holidays

DateHoliday Name
7 JanuaryMartyrdom of Hazrat Fatemah
11 FebruaryAnniversary of the Islamic Revolution
15 FebruaryBirthday of Imam Ali
1 MarchMabaath
18 MarchBirthday of Imam Mahdi
20 MarchOil Nationalization Day
21 – 24 MarchNovruz Holiday
1 AprilIslamic Republic Day
2 AprilSizdah Bedar
23 AprilMartyrdom of Imam Ali
2 MayEid al-Fitr
26 MayMartyrdom of Imam Sadeq
4 JuneDemise of Imam Khomeini
5 JuneKhordad National Uprising
10 JulyEid al-Adha
18 JulyEid al-Ghadir
7 AugustTassoua
8 AugustAshura
17 SeptemberArbaeen
25 September

Death of Prophet Muhammed & Martyrdom of Imam

Hasan

27 SeptemberMartyrdom of Imam Reza
5 OctoberMartyrdom of Imam Hassan Asgari
13 OctoberBirthday of Imam Sadeq and Prophet Muhammad
27 DecemberMartyrdom of Hazrat Fatemah

Termination

Rules for termination of an employment contract

Type of TerminationBrief Description
Justified Dismissal

To be justifiable, a dismissal must meet all mandatory conditions of Article

27 of the Iran Labor Law

Unjustified DismissalUnjustified Dismissal

Voluntary Resignation

When one ends an employment contract in writing, there are requirements about where copies of it must go. The first copy goes to the Labour Office, the second is for the employee’s records, the third by the employer and the last to the Islamic Labor Council

When a worker’s contract ends, they can ask the employer to provide a work certificate. This spells out how long employment lasted, start and end dates and the type of work the employee did for the employer.

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