Land in Iran | LegaMart

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QuestionOct 5, 2020 - 12:34

Land in Iran

We are a foreign company which has invested in a power plant in Iran. In our case, lenders will want to take security against our land. What is being asked is whether or not a foreign lender can register security against our land assets or not (in Iran)?

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Oct 5, 2020 - 14:27

Generally speaking, foreigners cannot own land in Iran but there is no restriction on taking land as the security. Foreign bank cannot ask take the ownership of the land but it can ask for the sale of the land through an auction procedure in the case of default and non-refunding the loan.

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Oct 6, 2020 - 12:32

Regardless that, based on Iranian rules and regulations, foreign people included of individual and legal persons, cannot title Iranian land and immovable properties, so that there is not availability of pledge for foreign banks, unless registering an Iranian company in accordance with Iranian company law, we have two different types of land in Iranian legal systems of ownership for land in Iranian legal system as below: a. Ordinary title which depends on non-official deeds: if the land does not pass the formal land registration process, and also does not have the official registration number or maybe whole land has only one official registration number, terminologically called land has a “mother deed” and doesn’t have any registration partition record, however, the deed will be protected by Iranian law, if it conducts based on law. b. Official deeds: the lands which are preformed registration process, therefor from registration land and document office issued deeds for them, transferring this land will be done by the parties in notary publics. These deeds have no risk. Accordingly, Consider that the project of your case, consist of a kind of national type and contract party of our case is power ministry on behalf of the government. Therefore, there is no choice for buyer to choose land for preforming the project, inevitably, it is construct nearby powerhouse. So that, this land which introduce by the MREC, has not official deeds. So, they will purchase by non-official deeds. Due to the usage of these lands are for agriculture, for preforming the project, you should change the usage of the land from governmental authorities and get some license such as: environment license, establishment license, operation license and etc. It is clear that, after having these necessary license, preforming and operation, the condition for partition deeds will be ready for having particular partition deeds.

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