Chabahar Free Zone

 

Introduction of Chabahar

Chabahar city with an area of nearly 17,150 square kilometers and a population of over 200 thousand people is situated in the province of Sistan and Balochistan in the most southern point of the east on the shore of Oman Sea, in the nearest distance with the open waters such as Indian Ocean, it is the only oceanic port of Iran. The position of the bay in this port and also existence of deep waters and natural cuts has created a special space for jetties with great depth and desirable harbor for berthing of large ships so that this port has the capability of transformation into a mega port. In other words, Chabahar is the Iran’s eastern transit gate and it is seen as a strategic region for the development of transit industry. This distinctive feature is not observed in other southern coastal areas of Iran and even in the Persian Gulf states.

Considering all abovementioned facts, it is therefore necessary to look at the special geographic position of southeastern part of Iran, specially the Chabahr port from the view point of national interests in order to boost and reinforce economic communication with neighboring and Central Asia countries in the realm of trade exchanges using natural capacities and the potential provided by the Chabahar Free Trade Zone organization. Doing so, we will endeavor to fulfill remarkable goals including removal of deprivation, economic development, presence in global markets, creation of reproductive jobs, exportation of industrial and provision of general services (as mentioned in article one of “Administration of Free Trade-Industrial Zones of the Islamic Republic of Iran)".

Chabahar’s position along international transit of goods (or shipments)

About 50 percent of global transportation of goods (or shipments) is carried out in the Far East, as declared by the U.N. transportation surveyors. Two transportation corridors pass Iran among three global ones which Chbabahr is the southernmost part of east-west corridor (predicted by the said surveyors).

This journey of goods (or shipments) is started from the beginning of Silk Road in China; it nourishes its economic core, i.e. Canton and joins the south eastern Asian countries. Then arrives India while covering the transportation in its main cities including Calcutta, Nakpoor, Jaipoor, Hasir Abad, Karachi, Ben Ghasem and finally arrives the Chabahar.

From the viewpoints of experts, Chabahar port is the intersection of south- north and east-west corridors around the world. This characteristic is an inevitably considerable privilege of the eastern part of the state.

 

Why Chabahar?

  1. Current Capacities and Infrastructure
  • The only Iranian oceanic port with the required facilities and equipment, mooring capacity to service oceanic vessels and having appropriate hinterland facilities.
  • The shortest way to connect Central Asia and Afghanistan to Free Seas
  • The shortest transit route in the east of Iran
  • Neighborhood with Peace Gas Pipeline (Iran-India)
  • Having vast marine resources and aquaculture facilities
  • Having roads, energy and telecommunications Infrastructure
  1. The main areas of investment
  • Utilizing East-axes Transit Capacity
  • Having (Eastern provinces, Afghanistan, Central Asia) a regional distribution network and a hub for the transit of goods
  • having the re-export capacity for regional countries (Oman, Afghanistan, Pakistan)
  • Access to ocean waters to service oceanic vessels
  • Utilizing the fifth gas pipeline to India
  • taking advantage of the neighboring countries’ desire to invest in the value chain (tea, rice, dried fruits, etc.) And trade development.
  • Utilizing the government's political decision to build an automotive industry
  • Capacity to exploit marine and aquatic resources and local skills in this field
  1. Competitive Advantages in Chabahar Free Zone
  • Discounts on warehousing costs and the use of port facilities for containers that enter the Free Zone by sea.
  • Discount on the cost of warehousing of export goods entering the free zone.
  • Shipping discount for free carrier up to 10% of the CIF value of the merchandise.
  • Discounts on dealerships and after sales services up to 10% of the CIF value of the merchandise.
  • Discount on the cost of opening an LC through one of the banks located in the Free Zone up to 25% of the CIF value of the merchandise
  • Providing convenient facilities for importing commercial goods.
  • Providing facilities for marginal shipping costs
  • The most important oceanic port of Iran with access to land routes.
  • The closest route to Afghanistan and Central Asia for transit goods.
  • Access to air transport facilities through Chabahar Airport
  • Ability to moor large ships in existing docks.
  • Low tariffs compared to similar free zones and access to cold storage of 5 thousand tons and large warehouses.
  • Closeness to international shipbuilding and repair centers
  • Easy access to various minerals in eastern Iran
  • Access to abundant aquatic resources in the Oman Sea and the Indian Ocean because of establishment and development of fisheries industries.
  • Export and import incentives for export-oriented manufacturing industries such as automobile and electronics

 

Advantages of Investing in Chabahar Free Zone

  1. Special advantages of Chabahar Free Zone
  • Strategic geographic location along the international waterways and close to international shipping lines
  • The only commercial oceanic port outside the Strait of Hormuz
  • Eastern Iran Corridor Connection Point (North-West Corridor) to Free Waters and connection of landlocked countries CIS
  • The nearest port to the markets of Central Asia and Afghanistan
  • Easy access to fossil fuels in the Middle East and Central Asia
  • Easy access to construction materials and mines in Sistan and Baluchestan province
  • Easy access to various minerals in eastern Iran
  • The multimodal transport connections by air, land and sea
  • Long-term lease and sale facilities for foreign investors
  • Located in the safest and closest rout to the global markets (the Indian subcontinent)
  • Proximity to the countries with growing population in South Asia
  • Located in the only Iranian oceanic port (Chabahar) with immediate access to the mainland of Iran
  • Proximity to the world's largest energy resources in the Persian Gulf

 

  1. Facilities and Legal Advantages
  • Possibility to own %100 of shares of foreign companies
  • Granting Guarantee for foreign investments according to Foreign Investment Promotion And Protection Act
  • The possibility of unlimited investment for both Iranian and foreign citizens and %100 capital and profit repatriation
  • %100 income and corporate tax exemption for 20 years
  • Duty exemption for importing of raw materials and machineries for manufacturing units and construction purposes
  • Exemption of exporting Free Zone-made goods to foreign markets from general BXIM regulations
  • Duty exemption of exporting Free Zone-made goods to mainland to the extent of value added caused by utilization of domestic production factors
  • Possibility to export products produced from foreign raw materials to the amount authorized by the value added commission
  • Ability to use foreign labor force up to %10 of the total workforce in Chabahar Free Zone
  • Flexible labor regulations
  • Unloading, loading, transit and transshipment of merchandisesabroad is permitted and it is free from all kinds of taxes and duties, only warehousing and local charges shall be collected
  • Retail sales allowed
  • Establish private or foreign banks and insurance or their branches
  • Six-month extendable residential visa for foreign investors
  • The possibility of establishing bank and domestic and international insurance or their branches
  • Visa issuance at airport through the representative of Ministry of Foreign Affairs with prior request
  • Possibility to exploit land in projects without paying the land price, long-term lease or participation in projects, as well as the possibility of transferring to companies registered in Iran

 

  1. Port advantages and facilities in Chabahar port and Free Zone
    • Discount on the storage cost for containers that are commercially imported into the free zone
    • Discount on the cost of port facilities for containers that are transported offshore to the free zone
    • Discount on the storage cost of export goods that are imported into the Free Zone
    • Discount on carriage from the origin up to %10 of the CIF value of the goods
    • Discount on agency and after sales services up to %10 of the CIF value of the goods
    • Tax exemption for 10 years from the date of operation for all economic activities
    • Exemption from storage costs in Chabahar for three months for commercial goods
    • Providing value added facilities for importing goods to mainland by Chabahar Free Zone
    • Providing facilities for difference of shipping costs
    • The issuance of certificate of origin approved by the customs authorities of the country
    • Issuance of the negotiable warehouse receipt and the separated warehouse receipt approved by the customs of the country by the organization
    • Not being abandoned of goods in the warehouses of Chabahar Free Zone

 

  1. Future opportunities in Chabahar Port & Chabahar Free Zone
  • Developing Chabahar Free Zone into a major transit hub within the framework of Eastern Axis and Makoran Coastal Development Plans
  • Connection to the national rail network
  • Connection to national grid network and capacity to connect to national gas network (in near future)
  • The possibility of building downstream industries following the emergence of heavy industry including petrochemical, steel, and automotive industries
  • Construction of the international airport
  • Construction of specialized towns (including fisheries, aquaculture, dates, food industries….)
  • Fishery and aquaculture industry hub
  • The possibility of developing the country's only oceanic port with an annual capacity of 8.5 (eight and a half) million and up to higher capacities and the possibility of landing of ships with a capacity of 100 thousand tons
  • The possibility of investing in automotive hub with an export-oriented outlook
  1. The relative advantages and investment opportunities in the Chabahar Free Zone

 

Relative / Competitive Advantages

Investment Opportunities

Cheap labor

User Industries

Closeness to energy resources & its consumer markets in India, China & Pakistan

Energy industries, energy storage & its tranship

Closeness to growing markets in Central Asia &
Afghanistan, Middle East & South Asia

Consumer industries, service support & international transport

Closeness to international shipping lines

Ship Building & Repair

Access to abundant sources of fish in Oman Sea & Indian Ocean

Fisheries industries

Tax, export & import incentives

Export-oriented manufacturing industries such as Assembly of automobiles & electronic equipments

Close access to some agricultural products like palm

Establishment of processing industries for agricultural products

Access to some types of minerals such as limestone & granite in the neighboring areas

Mineral processing industries

Close access to beach & retail shops

Tourism Industry

Infrastructure Requirements

Infrastructure industries

Training Requirements

Establishment of universities & vocational centers

 

Service Requirements

Establishment of service industries like international financial services, professional consulting services

 

 

Legal Incentives

  • Special regulations for the employment of human resources in the free zone and the availability of skilled, productive and cheap human resources.
  • Exporting products abroad without customs and port duties
  • Possibility to export products produced from foreign raw materials to the amount authorized by the value added commission
  • Establish private or foreign banks and insurance or their branches
  • %100 income and corporate tax exemption for 20 years
  • Possibility to exploit land in projects without paying the land price, long-term lease or participation in projects, as well as the possibility of transferring to companies registered in Iran
  • Possibility to own %100 of shares of foreign companies
  • Company registration with 100% foreign ownership
  • Freedom to transfer foreign currency abroad without any restrictions
  • 100% capital and profit repatriation
  • Granting Guarantee for foreign investments according to Foreign Investment Promotion and Protection Act
  • The possibility of establishing bank and domestic and international insurance or their branches
  • Enjoying special regulations on exports, imports and customs
  • No visa requirement and easy issuance of residence and entry permit for foreign visitors

 

Source: www.cfzo.ir