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Iran PEO & Employer of Record

Expand your organization into Iran, with or without a Iranian entity

The Islamic Republic of Iran, located in Western Asia, is a large and regionally important country. While it is generally classified as a developing country, it has large oil and natural reserves make it an important economic power in the world. For many organizations, Iran can present an attractive target for foreign expansion, partly due to its future potential, but also as a gateway to other parts of Asia and the Middle East.

If your organization is considering a move to Iran, it is important to understand that it can be a particularly challenging place to set up and run a business. The country has a complex set of laws, uses a distinct language (Persian), and is strongly influenced by religion, making it a unique place to do business. Administrative hurdles and long delays can happen, so we recommend enlisting help from experts who understand the local customs, culture, and laws.

At Horizons, we offer full support to organizations planning an expansion into Iran. Our tailored professional employer organization (Iran PEO), employer of record, and payroll outsourcing services can offer everything you need to expand your business into Iran, whether or not you have already established an Iranian entity.

With a dedicated in-house recruitment team, we can also source, recruit, and onboard your local workforce, as well as handle any ongoing HR and compliance work. Our experienced team will provide everything you need to expand into Iran as efficiently as possible and can potentially save you thousands in expansion costs.

How can Horizons help you expand in Iran?

Horizons enables your business to expand its operations into Iran, without the need to set up a legal subsidiary.

Rapid Market Entry

Horizons will enable you to source, hire, and onboard professionals across Iran in as little as 48 hours.

Cost-Effective Expansion

Our Iran PEO solution can help you benefit from cost savings of up to 85%, without the need to establish an Iranian entity.

Payroll Outsourcing

Accurate, on-time salary and payroll processing, individual income tax declaration, expense management, statutory benefits administration, and social benefits contribution.

Employee Onboarding

Utilize the relevant provision for all types of Iranian labor contracts, whether a fixed-term or open-ended contract.

Onsite Legal & HR Team

In-country legal guidance through employee acquisition, contract renewals and termination, benefits distribution, and HR compliance; as well as local tax, law, and financial expertise.

Ensure Full Compliance

We ensure that employment contracts are fully compliant and adhere to Iran labor laws and best practices.

Employment & Labor Laws in Iran

📝 Employment contracts in Iran

Employers in Iran need to provide a formal contract of employment for all employees. To be valid, these contracts must contain various details of the employment agreement, such as working hours, compensation, duration of employment, and so on. Compensation should be referenced in the local currency, Iranian rial, and the contract should be written in Persian.

By partnering with our Iran PEO, Horizons’ team of local experts can provide assistance for drafting strong employment contracts that are compliant with local regulations. 

⏰ Working hours in Iran

The standard working week in Iran is 44 hours, from Saturday to Wednesday. When employees work beyond this, they must consent first and are usually entitled to overtime pay at 140% of normal rates.

📅 Public holidays in Iran

Iran has one of the most generous public holiday schedules in the world, but it is also more complex than most countries. There are around 22 holidays celebrated nationally, but there are also a number of unofficial days which are liable to change annually, and the exact list is not necessarily fixed. The standard holidays include days such as the Birth of Muhammad, Islamic Republic Day, Nowruz (Persian New Year), the Anniversary of the Islamic Revolution, and several more.

Employees in Iran are entitled to overtime pay if they work on a public holiday.

As an employer in Iran, it is important to understand the situation in your area of operation and what days your employees expect to be given as leave.

The following list covers the main commonly celebrated public holidays in Iran:

06 Jan
Funeral of Qasem Soleimani
29 Jan
Martyrdom Of Hazrat Fatimah
11 Feb
Islamic Revolution Day
08 Mar
Imam Ali’s Birthday
19 Mar
Oil Nationalization Day
20-22 Mar
Nowruz Holiday
22 Mar
The Prohet’s Ascension
23 Mar
Nowruz Holiday
31 Mar
Islamic Republic Day
01 Apr
Nature Day
09 Apr
Imam Mahdi’s Birthday
14 May
Martyrdom of Imam Ali
24 May
Eid e-Fitr
25 May
The Day after Eid-e-Fitr
03 Jun
Demise of Imam Khomeini
04 Jun
Khordad National Uprising
17 Jun
Martyrdom of Imam Sadeq
31 Jul
08 Aug
28 Aug
Tasoua Hosseini
29 Aug
08 Oct
16 Oct
Death of Prophet Muhammed / Martyrdom of Imam Hassan
17 Oct
Martyrdom of Imam Reza
26 Oct
Martyrdom of Imam Hassan Asgari
29 Oct
Birthday of Muhammad and Imam Sadegh

🏖 Iran vacation leave

Employees in Iran are entitled to four weeks of holiday leave per year, or five weeks if they work in hard physical labor or dangerous situations. Up to nine days can be carried over to the following year.

😷 Iran sick leave

Iran’s social security system may provide cover for employees who are absent due to injury or sickness. As an employer, you may choose to offer additional sick leave benefits for your employees.

👶 Parental leave in Iran

Female employees are entitled to 90 days of maternity leave. They should be able to receive compensation from the country’s social security system during this time, but the exact amount is determined by the Social Security Act. The position of the employee on maternity leave must also be protected while she is absent.

💰 Terminations and severance in Iran

Termination terms should be laid out in an employee’s contract of employment. There are strict requirements for dismissals, and employers generally need to have a justifiable reason to terminate any employment contract or may risk legal action.

Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time. Horizons’ Iran PEO can mitigate risk for foreign companies and provide guidance through this process.  

🏦 Taxation in Iran

Both employees and employers (in the private sector) in Iran must contribute a percentage of salaries to the Social Security Organization, which covers things like pension, maternity leave, and other benefits. Employers must contribute 23%, while employees must contribute 7%.

Income is taxed progressively, ranging from 0% to 20% depending on earnings. 

💸 Individual income tax

Iran has a national healthcare system, which provides basic healthcare and subsidized medicines. However, many wealthier Iranians choose to pay for private healthcare, which is generally available in larger cities. As an employer, you could choose to provide private health insurance as part of your employee benefits packages. 

🏥 Health insurance

Standard health and pension insurance is provided through the national system, although supplementary health insurance can be provided to the employees. 

💳 Iran compensations & benefits

Compensation laws in Iran

The minimum wage in Iran, as of 2020 Persian New Year, is fixed at 15,168,820 rials per month. 

Benefit management in Iran

Many employees in Iran choose to offer their employees benefits packages, including things such as pension contributions, company cars, extra vacation leave, and private health insurance. However, setting up a benefits system in Iran can be difficult if you are not familiar with the country’s complicated labor laws, language, and administrative customs.

Horizons can help you bypass this element of your expansion by offering customized our Iran PEO & benefit management outsourcing. Our experts will advise you on the best course of action and take care of your benefit setup and management, helping you focus on the important job of your Iranian expansion.

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