Buy Property by Foreigners in Iran (2024)

Many of the foreign nationals tend to buy property in Iran for several reasons. Iranian law is generally complex and, of course, strict in this regard.

An overview of the regulations related to buy property in Iran

According to Article 160 of the Civil Code, foreign nationals can enjoy all the rights of Iranian nationals, excluding some exceptional cases. Therefore, the general principle in Iranian law is that any foreigner can enjoy all civil rights, except in cases where the law provides for a specific exception.

Article 160 of the Civil Code states that foreign nationals can enjoy all civil rights in Iran excluding the following cases:

1. In case of rights that the Iranian law has explicitly restricted to Iranian citizens or in cases where foreign nationals are explicitly deprived of them;
2. In case of rights of the personal status which the laws of the State of the foreign national has not accepted them;
3. In case of special rights that have been established solely from the point of view of Iranian society.

The ownership of real estate for foreigners

One of the cases in which various laws have restrictions on foreign nationals is the issue of acquisition and transfer of ownership of real estate for these persons. According to regulations related to the acquisition of real estate by foreign nationals ratified in 16/3/1310 (7^th June 1931), no alien is allowed to enjoy ownership of agricultural land in any amount.

Moreover, according to the Article 2 of Foreign Investment Promotion and Protection Act (FIPPA) approved in 1380 (2001), the ownership of any type of land in any amount on the pretense of foreign investment is not allowed within the framework of law. Also, Note 2 of Article 24 of the Law on the Administration of Free Trade-Industrial Zones of the Islamic Republic of Iran (LAFTIZ) states that leasing land to foreign nationals is legal but selling it is strictly prohibited.

Real estate cases which Iranian nationals are not allowed to buy or own

In addition to foreign nationals, Iranian nationals are also prohibited from owning and buying real estate in the following cases:

1. Iranian women who acquire foreign citizenship by marriage do not have the right to own real estate if it leads to foreign economic domination;
2. Iranian citizens who have renounced their citizenship according to Article 2 of the Civil Code of Iran;
3. Any Iranian citizen who has obtained foreign citizenship after 1280 solar year (1901 Anno Domini) without observing the legal regulations.

Article 8 of the Civil Code of Iran states that “real estate acquired through provisions by foreign nationals in Iran will be subject to Iranian law in all respects”.

Some exceptions for buying property by foreign nationals in Iran

Given that the legislature has restricted the possibility of the ownership of the immovables by foreign nationals, only in the following cases foreign nationals can possess real estate:

• Foreign nationals can have the right of acquisition through the treaties ratified by governments. For example, according to the agreement between Iran and Germany, which was agreed upon in 1307 (1928), German citizens can acquire real estate only for residence, occupation or industry.
• The regulation of the acquisition of property by foreign nationals approved in 1328 solar year (1949) is the most important legal source for the acquisition and buy of property by foreign nationals.

Despite the ruling of the General Assembly of the Court of Administrative Justice, stating that the granting of any special privileges including the ownership of immovable property in the geographical territory of Iran to foreign nationals is subject to the explicit ruling of the legislature, the ownership of property by foreign nationals is currently done in accordance with this law.

In the declaration that the applicant submits to the Registration Office (in the locale of the property), the meaning of ownership must be clearly stated; if the applicant’s family members own another property in Iran, it must be stated explicitly in the declaration, too.

According to Article 1 of the Acquisition of Immovable Property by the Aliens Law adopted in 1328 (1949), foreign natural persons have the right for ownership as foreign nationals in Iran, but it is limited to the purchase of property for their place of residence, industry or business.

Practical ways for buying property in Iran

Despite the strictures that Iran law practices in this field, there are currently certain practical methods, some with high risks and some completely safe, for buying property in Iran:

1. Buy a property through an informal bill of sale

In this method, which is encouraged by real estate companies, the official document of the property is in the name of an Iranian. After that, the Iranian can sell the property to a foreigner in the form of an ordinary, not a formal, bill of sale. This method seems very convenient and easy at first, but it will cause you a lot of problems. It should be noted that according to Iranian laws, the official owner of an immovable property is only the person who has the official documents in his own name. Hence, when you buy a property with an unofficial document from an Iranian, the law still considers that person to be the official owner of the property. This is risky and can cause many problems for you; for example, the Iranian can sell the property at any time without your permission on his/her own decision. We strictly recommend our clients to refrain from such transactions.

2. Buy a property in the name of an Iranian company

Currently, under the Iranian law, a foreigner can own 100% of the shares of an Iranian company. In fact, in Iran, unlike some other countries like Dubai, there is no need to have a native in the company for this process. On the other hand, an Iranian company can gain the ownership of any number of real estate on its own will. So, the best option for you at this time is to register an Iranian company and then buy real estate under the name of that company.

The issue of buying property in Iran is a sensitive issue and needs specialized advice. So, contact our specialists for a safe sale and buy property in Iran. Here, you can find quick answer to any question that you in this regard at Iran Best Lawyer.