The Ideal Investment Platform For A New And Hungry Market

Earlier this month, Boeing, the American aerospace giant, won a 17 billion dollar contract with Iran. This contact comes after an even more impressive 25 billion dollar deal with Airbus six months ago. Subject to US government approval, these contracts represent over 200 new planes that will replace the rundown national Iranian fleet. Dangerous and dilapidated, the outdated aircraft operated by Iran Air such as the Airbus 300 serves as a reminder of how long economic sanctions have been in place. These sanctions have prevented the country from updating important infrastructure, such as the transportation system.

The sheer magnitude of the deal suggests that Iran has been waiting (and amassing earmarked capital) for quite a while to inject money into the development of their country. What's more is that Iran has not forgot the vast potential of Luxembourg as a financial center and investment platform. Today, the Luxembourg Chamber of Commerce has partnered with the Iranian Embassy in Belgium to host a seminar for businesses and investors about how to access the Iranian market.

Sanctions lifted, opportunities abound

In January 2016, the European Union and the United States took the actions necessary to lift nuclear-related and financial sanctions on Iran. Even if certain human rights-related and terrorism-related sanctions remain in place or authorisations may be required in specific cases, such as the Boeing and Airbus deals, new possibilities to trade with Iranian contractors have been created, and investors are looking at the opportunities offered by this country and its strong demographic dynamics.

With population of more than 78 million, and more than half of the population below 35, Iran boasts a literacy rate above 85%, central geographical positioning in Western Asia and a ranking of 16th largest in the world by area. While in 2004 the EU exports to Iran were reaching the level of almost €12 billion, due to sanctions they dropped by 46% to less than €6.5 billion in 2014.

The 20-year embargo and the absence of international cooperation have brought the Iranian economy to a standstill. In this lift of sanctions, Iran also sees the opportunity to address critical needs in terms of infrastructure, transport, telecommunication, agriculture, and R&D. In this new context, multinationals, institutional investors and alternative investors pondering the possibility of investing in Iran should consider using Luxembourg as a platform to do so...