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:
Date | Description | 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 | Eid-e-Qorban |
08 Aug | Eid-e-Ghadir |
28 Aug | Tasoua Hosseini |
29 Aug | Ashoura |
08 Oct | Arbaeen |
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.
Request a Proposal
Horizons will help you expand your business into Iran faster
At Horizons, we specialize in providing tailored employer of record, Iran PEO, and payroll outsourcing services to give businesses everything they need to begin trading in Iran as efficiently as possible. Our experts will ensure that you are ready to start trading and hiring in Iran in as little as 48 hours, and could save you more than 80% in expenditure, whether or not you’ve already registered a legal entity in the country.
We will handle all your expenses, payroll setup and management, benefits, and legal compliance in Iran, as well as any HR work. And as the only global PEO with an in-house recruitment team, we can also find, recruit, and onboard your local employees, providing our Iranian subsidiary to act as employer of record for your hires so you don’t need to establish an Iranian entity.
Talk to our Iran expansion experts today to learn how Horizons can simplify and fast-track your Iran expansion.
