Exporting to Iran

Iran, officially known as the Islamic Republic of Iran, is a country located in Southwest Asia with a population of 83 million and shares borders with Turkey. Due to its rich culture and location next to Turkey, Iran has strong commercial and cultural relations and is a preferred country for exporters. Iran, which cannot meet its needs for technological products in production, mainly imports electronic and industrial products from abroad. We can state that Turkey's advanced industrial technologies have come into play in this context, with many companies exporting products in these sectors. Due to its unstable political situation, Iran is currently a country that Turkish exporters are reluctant to export to. For this reason, let’s closely examine the issues to be considered in Turkey's export to Iran and the general aspects of exporting to Iran.

How to Export to Iran?

Due to restrictions imposed by the Iranian government, attention must be paid to certain restrictions on export products. Because it is an Islamic republic, it is necessary to be aware of the list of products that are not allowed to pass through Iran. In Iran, one of the most populous countries in the world, 85% of the population of 83 million are regular internet users. However, the proportion of e-commerce in this figure is quite low. Shopping on sites like Amazon and eBay, which are widely used worldwide, is prohibited in Iran. Only authorized sites by the Iranian government can be used for shopping. The usage rate of these websites, which are generally used by people living in big cities, is 3% compared to the country’s population, and this figure is expected to increase with the young population turning towards e-commerce.

There are important documents that must be obtained and certain procedures that need to be organized for exporting to Iran. Country-specific situations such as trade registration and Islam-compliant certificates should be carefully considered. Knowing the target market and finding products suitable for the audience is one of the important aspects of exporting. As ODS Consultancy, we assist you in reaching your target market with the experience and success we have gained over years in exports and support you in standing out your company with the right marketing strategies.

What Are the Companies Exporting to Iran?

There are several e-commerce sites that are commonly used and allowed in Iran. These sites can be listed as Digikala, Esam, Technolife Iran, Kalatik, and Divar. While electronic products such as phones and televisions are predominantly sold on these sites, a significant amount of women's clothing, home goods, and some second-hand products are also sold. A considerable amount of business purpose is pursued for the products purchased on these sites. Considering that e-commerce users in the capital city Tehran constitute the majority of all e-commerce users in the country, the likelihood of conducting business on these websites becomes a source of hope for exporters. Recognizing the audience, knowing the banned products, and understanding the general export structure of the country are issues that Turkish businessmen should note. With the right marketing technique, great successes can be achieved in exports to Iran. Along with our export products, which stand out in the industrial, electronic, and tobacco sectors, we have conducted foreign trade at a rate of 8.3% worth 2.3 billion with Iran.

What Documents Are Required to Export to Iran?

● You need to establish a company and have an e-commerce site within your company. If you do not prove to the relevant authorities that you will sell products within a company, you cannot carry out exports.
● You must obtain a valid trade license (Kart-ı Bazargani) from the Iranian Chamber of Industry and Commerce. Products from companies without trade chamber registration are not accepted.
● The Iranian government does not accept sales of your products in US dollars. You can only sell your products in currencies such as Euro and TL.
● Within the scope of micro-export, there is a VAT refund application of up to 18% for products sent to Iran with a postal and express cargo transportation limit of 7,500 Euro and 150 kg. To carry out micro-export, you need to obtain an ETGB (Electronic Commerce Customs Declaration). With this document, you can perform micro-export and facilitate the sale of your products that meet the conditions.
● Iran has mandated a certificate of origin. You must prepare this document proving that the products you sell are produced in the exporting country.
● You are required to register with the Iranian Exporters Union. To register with the Exporters Union, you will need documents such as tax office registration, signature circular, trade registry newspaper, chamber registration certificate, ID card, and membership fee payment.
● You must prepare commercial invoices.
● You must prepare international cargo and transportation documents.
● A bank account must be opened for payments made through Iranian banks.

What Are the Export Taxes to Iran?

Customs tariffs in Iran generally operate at a rate of 25%. There are 1,722 products banned from customs entry, and the export of these products is prohibited largely due to smuggling into the country and evasion of taxation. The general VAT rate under domestic taxes is set at 9%. The corporate tax rate is 25%. With the implementation dated 2020, reductions have been applied to the export tax on ores. A 5% discount is applied to copper ore, bringing it down to 5%, a 15% reduction on chromium ore bringing it down to 10%, an 8% reduction on lead ore bringing it down to 12%, and an 8% tax reduction on zinc ore, resulting in these products being subjected to taxes below the fixed export tax. A VAT reduction of 18% can be obtained for products sent under micro-export.

What Products Are Exported to Iran?

Products from the industrial sector are the most exported to Iran from Turkey. Additionally, significant amounts of ready-made clothing and cultural products are also exported. The distribution of products imported by Iran from Turkey by sector and related figures are as follows:
● Steel = 243.74 (change from 2021 +%247)
● Cement, Glass, Ceramics, and Clay Products = 58.66 (+%0)
● Iron and Non-Ferrous Metals = 251.82 (+%708.4)
● Leather and Leather Products = 4.73 (-%84.3)
● Electrical and Electronic = 285.55 (+%1249)
● Carpet = 0.18 (-%99.6)
● Ready-made Clothing and Textiles = 80.40 (+%128.2)
● Grains, Pulses, Oilseeds, and Products = 585.54 (+%188.2)
● Air Conditioning Industry = 394.81 (+%547.8)
● Chemical Substances and Products = 1,954.92 (+%186)
● Mining Products = 560.46 (+%174.2)
● Machinery and Equipment = 703.98 (+%67.7)
● Fruits and Vegetable Products = 106.56 (+%861.7)
● Furniture, Paper, and Forest Products = 1,768.83 (+%539.7)
● Automotive Industry = 685.39 (+%616.1)
● Aquatic Products and Animal Products = 61.83 (-%94.3)
● Textiles and Raw Materials = 3,079.12 (+%1104)
● Tobacco = 440.58

(Data obtained from TIM as of August 2022, values are based on x1000USD.)

What Is the Trade Volume Between Turkey and Iran?

In July 2022, during a joint press conference with the Iranian President, the President of Turkey stated that the two countries aimed to reach a trade volume of 30 billion dollars. Iran, which is increasingly growing its commercial relations with Turkey, is trying to facilitate entry into new markets for businessmen and exporters by expanding agreements with Turkey. As of 2022, the trade volume between Turkey and Iran has reached 7.5 billion dollars.