Company Registration in Iran for Foreign Investors: PJSC & LLC Guide

Basic formation requirements at a glance

The table below summarizes the practical formation points that foreign investors usually ask about first. These figures and requirements should still be reviewed before filing, because official practice, licences, banking requirements, and the company documents may affect the final setup.

For a foreign investor, these items are not just legal formalities. They affect bank documentation, signing authority, accounting records, capital evidence, shareholder reporting, and future company changes.

Can foreigners register a company in Iran?

Foreign investors can consider registering an Iranian company, but the process should be planned carefully before documents are submitted. The right answer depends on the business activity, ownership structure, licensing requirements, sector rules, banking practicalities, and the investor's own sanctions and compliance obligations outside Iran.

For many foreign investors, the practical question is not only whether a company can be registered. The more important question is which structure will make future accounting, tax, VAT, payroll, social security, banking, and shareholder reporting easier to manage.

Before starting, investors should clarify

• The exact business activity and whether a special licence or approval is required.
• Whether the shareholders will be individuals, foreign legal entities, or a mix of both.
• Who will act as directors, managing director, and authorized signatories.
• Whether the company will hire employees in Iran and need payroll and social security setup.
• How capital injections, payments, and shareholder funding will be documented.

Private joint stock company vs. limited liability company

This guide focuses only on the two structures most relevant for many foreign investors: the private joint stock company, commonly referred to as Sherkat Sahami Khass, and the limited liability company, commonly referred to as Sherkat ba Masouliyat Mahdoud.

The final choice should be reviewed with legal and registration advisors. Daneshgaran can help investors understand the accounting, tax, payroll, VAT, and reporting consequences of each structure.

Step-by-step company registration process in Iran

The exact process may vary depending on the company type, shareholders, business activity, documents, and official review. However, a practical registration plan for a foreign investor usually includes the following steps.

1. Define the business activity

The company's activity should be clear, realistic, and consistent with the business plan. A broad or unclear activity description may create issues during registration, licensing, banking, tax registration, or later operational review.

2. Choose the company type

Decide whether the company should be registered as a private joint stock company or a limited liability company. This decision affects ownership, governance, capital documentation, transfer rules, and future reporting.

3. Identify shareholders, directors, and signatories

Foreign investors should decide who will be shareholders or partners, who will manage the company, who will sign on behalf of the company, and how authority will be documented in the company records.

4. Prepare incorporation documents

Incorporation documents usually include the Articles of Association or company agreement, shareholder or partner information, director and signatory information, registered address, activity description, capital details, and meeting minutes or resolutions where applicable.

5. Prepare foreign shareholder documents and translations

If shareholders or directors are foreign individuals or foreign legal entities, identity documents, corporate records, powers of attorney, board resolutions, and official translations may be required. Depending on the country and document type, legalization or consular certification may also be needed.

6. Reserve and approve the company name

The proposed company name should be checked and approved through the registration process. Investors should avoid names that are confusing, unavailable, too similar to existing names, or inconsistent with the activity or official naming rules.

7. Submit the registration application

The application and required documents are submitted through the company registration workflow. The information in the application should match the signed documents, shareholder information, registered address, capital details, and signing authority documents.

8. Complete capital and publication requirements

For a private joint stock company, the capital subscription and payment documentation should be prepared according to the applicable rules. After approval, the formation notice should be published as required, including in the Official Gazette and the designated newspaper where applicable.

9. Set up tax, accounting, and statutory records

Once the company is registered, the financial setup should begin immediately. This includes tax file coordination, accounting system setup, statutory records, bookkeeping procedures, invoice controls, bank documentation, and management reporting templates.

10. Plan payroll, VAT, and ongoing compliance

If the company hires employees, payroll and social security processes should be established before the first salary cycle. If the company issues invoices or purchases locally, VAT and electronic invoicing readiness should also be reviewed early.

Required documents for foreign shareholders

Required documents depend on whether the foreign shareholder is an individual or a legal entity, the country of origin, the company type, and the registration authority's review. The list below is a practical planning checklist, not a substitute for legal advice.

Common document categories

• Passport or identity documents for foreign individual shareholders, directors, and signatories.
• Corporate documents for foreign legal entity shareholders, such as certificate of incorporation and constitutional documents.
• Board or shareholder resolutions authorizing the investment or appointment of a representative.
• Power of attorney where a local representative or advisor signs or files documents on behalf of the investor.
• Official translations of foreign documents where required.
• Registered address information in Iran.
• Capital amount, ownership percentage, and contribution details.
• Articles of Association, company agreement, minutes, and signatory authority documents.

Foreign documents may need formal translation, legalization, or consular certification depending on the country, document type, and official review requirements. Investors should confirm the document pathway before starting to avoid delays.

Private joint stock company in Iran

A private joint stock company is often considered when foreign investors want a more formal corporate structure. It is generally more suitable where ownership is represented by shares, governance needs to be more structured, or future changes in ownership, financing, tenders, or reporting are expected.

Key points to consider

• Capital is divided into shares.
• The liability of shareholders is generally limited to the par value of their shares.
• A private joint stock company should have at least 3 shareholders.
• Minimum capital is commonly stated as IRR 1,000,000 at formation.
• At least 35% of the cash capital is paid at incorporation, while the remaining subscribed amount is committed by the shareholders.
• At least 3 board members are generally used in practice, and the company should appoint a Managing Director, Chairman of the Board, and Vice-Chairman of the Board.
• The Chairman and Managing Director may be the same person only with the required shareholder approval.
• Board, managing director, statutory inspector, meeting minutes, and shareholder decision processes should be managed carefully.
• Legal notices and changes may require official registration and publication.

From a finance perspective, a private joint stock company usually needs disciplined recordkeeping from the beginning: shareholding records, capital payments, board resolutions, bank documentation, statutory records, accounting entries, and reporting packages for shareholders.

Limited liability company in Iran

A limited liability company may be considered when investors want a simpler ownership and management structure. It can be practical for smaller operations, service businesses, or closely held ownership structures, but the transfer of interests and partner approvals should be reviewed carefully.

Key points to consider

• Capital is not divided into shares.
• Participants' interests are usually transferred through a more restricted process than share transfers.
• The company should have at least 2 partners.
• The capital is agreed by the partners and documented; in practice, many LLCs are formed with a nominal capital such as IRR 1,000,000, subject to activity, licence, banking, and registration review.
• The company agreement and management authority should be drafted clearly.
• Partner decisions, signing authority, registered address, activity, and capital information should be accurately documented.
• Any future change in partners, managers, address, or activity may require registration and publication steps.

From a compliance perspective, a limited liability company still needs a proper accounting setup, bank reconciliation, tax registration coordination, expense documentation, invoice controls, and management reporting. Simpler legal structure does not mean lighter tax and accounting discipline.

What happens after company registration?

Many foreign investors focus heavily on incorporation and underestimate the work that comes immediately after registration. From a financial and compliance perspective, the post-registration phase is where the company becomes operational.

Post-registration compliance checklist

• Tax file setup and coordination with the relevant tax office.
• Accounting system setup and chart of accounts design.
• Statutory books and recordkeeping procedures.
• Bank account documentation and shareholder funding evidence.
• VAT and electronic invoicing readiness where applicable.
• Payroll and social security setup before hiring employees.
• Monthly bookkeeping, bank reconciliation, AR/AP tracking, and expense documentation.
• Management reporting in English for foreign shareholders or head office.

This is also the right time to define how local Iranian records will be connected to group-level reporting. For foreign shareholders, a monthly closing package can reduce confusion and make local compliance easier to supervise from outside Iran.

Common mistakes foreign investors should avoid

The most expensive problems often start with small decisions made during registration or immediately after it. A company can be legally registered but still have weak accounting, poor documentation, unclear authority, or unreliable reporting.

Common issues we see

• Choosing the wrong structure: selecting PJSC or LLC without considering future financing, ownership changes, governance, or reporting.
• Unclear business activity: using an activity description that does not match the real operation or licence requirements.
• Poor shareholder funding documentation: capital injections and shareholder advances are not documented clearly.
• Late tax and accounting setup: no accounting system, chart of accounts, or tax file coordination after registration.
• Ignoring payroll before hiring: employees are hired before payroll tax, social security, and accounting workflows are ready.
• No English reporting: foreign shareholders cannot understand monthly activity, cash movements, tax status, or local compliance issues.

How to reduce risk

• Choose the company type after reviewing both legal and financial consequences.
• Create a registration-to-compliance timeline before filing documents.
• Keep a digital evidence folder for registration documents, capital, bank payments, tax, payroll, and contracts.
• Start monthly bookkeeping and reconciliation from the first transaction.
• Prepare English management reports for shareholders or head office from the beginning.

How Daneshgaran can support foreign investors

Daneshgaran Mohaseb Iranian supports foreign investors around and after the company registration process by helping design the financial, accounting, tax, VAT, payroll, and reporting setup needed to operate in Iran.

We can coordinate with legal and registration advisors where needed, while focusing on the areas that directly affect finance and compliance: accounting setup, tax registration coordination, bookkeeping, payroll, VAT readiness, statutory records, reconciliations, and English management reporting.

Our support can include

• Pre-registration financial and compliance planning.
• Review of PJSC vs. LLC implications from an accounting and reporting perspective.
• Accounting setup and chart of accounts design after registration.
• Tax file and VAT readiness coordination.
• Payroll and social security setup if the company hires employees.
• Monthly bookkeeping, bank reconciliation, and management reporting.
• Preparation of schedules and supporting documents for shareholders, directors, auditors, or management review.

If your company is planning to enter Iran, the best time to design the accounting and compliance process is before the first transaction is recorded.

FAQ

Planning to register a company in Iran?

Before starting the registration process, it is important to understand the accounting, tax, payroll, VAT, statutory records, and reporting obligations that come after incorporation. We can help foreign investors design a practical post-registration compliance setup for doing business in Iran.

Contact us to discuss your company setup.