How to Prepare Documentation for a Joint Venture in Iran: A Practical Guide for International Partners

A joint venture (JV) is only as strong as its paperwork. The documents prove who the partners are, record what each one is contributing, set out who controls what, and give the venture a legal footing that can be registered and enforced. Iranian practice adds extra layers: Persian-language filings, Official Gazette publication, possible foreign-investment licensing and a sanctions environment that can decide whether a deal is possible at all.

Most joint ventures take one of two forms. In a corporate JV, the partners set up a new company and hold shares in it. In a contractual JV, the partners sign an agreement, often starting with a memorandum of understanding (MoU), and cooperate on a project without creating a new legal entity. This guide explains how to prepare the documentation for each. It is general information, not legal advice.

1. Choose the form before you draft

Both forms need the same families of documents, but the weight of each family changes.

Write a short structure memo first. It should say which form you are using, who the parties are, what each contributes, what the venture will do, and which approvals you expect. Every later document should be consistent with it.

If instead one partner is buying shares in an existing company, that is closer to an acquisition than a JV, and it needs the additional due diligence and warranty protection described in section 4.

2. Prepare partner documents

Each partner should provide evidence of identity, existence and authority. For an Iranian partner, ask for:

• The Persian legal name, registration number and National ID
• Incorporation and change notices from the Official Gazette, especially the notice of who may sign for the company
• The articles of association and any board or shareholder approval for the JV
• Licences relevant to the proposed activity
• A list of owners, directors and affiliates for sanctions and integrity screening

For a foreign partner, prepare a certificate of incorporation or equivalent, evidence of directors and signing authority, a board resolution approving the JV, and any power of attorney for the person who will sign or act in Iran. Documents issued abroad typically need notarisation, legalisation through the appropriate consular route and a certified Persian translation. Check the current requirements with your Iranian counsel before documents are produced, because the wrong format can cause delay.

Our guide How Due Diligence Works in Iran explains the checks on an Iranian counterparty in more detail.

3. Sign the preliminary documents

Before sharing sensitive material, agree a confidentiality agreement. Once the commercial points are settled, record them in a term sheet or MoU. Decide expressly which clauses bind the parties, such as confidentiality, exclusivity, costs and governing law, and which are only statements of intention.

In a contractual JV, the MoU is sometimes the only document the partners sign. If so, it should not be treated as a loose letter of intent. Draft it as the JV agreement, with clear obligations, contributions, decision rules and exit terms, or state that a full agreement will follow and say which parts bind in the meantime.

At this stage, build a data-room index: a list of every document requested, who provides it, when it was received and whether it has been reviewed. It will also serve as your record if disputes arise later.

4. Adapt due diligence to the form

Corporate JV

The focus is on the partners: their authority, capacity, licences, track record and ability to fund their contributions. If a partner contributes assets, know-how or licences rather than cash, document ownership, valuation and any restrictions, and check that these can lawfully be transferred to the new company.

Contractual JV

The partners remain separate, so each partner's own financial strength and compliance record matters even more. Add project-level checks: who holds the licences and permits, who owns the equipment, sites and intellectual property used in the project, which contracts will be signed with customers and suppliers, who employs staff, and who will be responsible for tax and regulatory filings on the project.

If a partner buys into an existing company

Treat this as an acquisition. Gather the Gazette history, articles, board and shareholder minutes, financial statements, tax records, material contracts, loans and guarantees, property and asset titles, employee and social-security obligations, litigation, licences and related-party dealings. Ask for written confirmation of what is missing, so gaps are recorded rather than assumed, and expect to need stronger warranties and indemnities.

In every case, keep the screening records for sanctions, ownership and reputation. Public records show what has been declared, not everything that matters, so supplement them with documents and written statements from the partners.

5. Plan the approvals and foreign-investment position

Iran's Foreign Investment Promotion and Protection Act (FIPPA) of 2002 is the main framework for foreign investment. Foreign investment is administered through the Organization for Investment, Economic and Technical Assistance of Iran (OIETAI), and only investments licensed under FIPPA qualify for its protections and privileges. FIPPA has been described as setting no minimum or maximum foreign shareholding, and a FIPPA licence typically records the amount of foreign investment, the foreign and Iranian partners, the type and area of investment and the way capital will be transferred. A venture can also proceed without a FIPPA licence, but it is then governed by ordinary Iranian law and does not receive the foreign-investment protections.

FIPPA recognises both company-based investment and civil partnership arrangements, so a contractual JV may also be capable of being licensed. Ask counsel which route applies to your project, because the application and the documents differ. A corporate JV will normally need the licence process to be finished before or alongside incorporation. Some sectors need separate sector licences or approvals, and some public projects have local-content or consortium requirements.

This is also where sanctions advice belongs. Whether you may enter the JV, fund it, receive profits from it or transfer shares or project interests in it is a separate legal question from whether Iranian law allows it, and the answer may differ for each participant.

6. Draft the core agreement

The JV agreement is the central document in both forms. In a corporate JV it is usually a shareholders' agreement. In a contractual JV it is a cooperation or JV agreement that has to do the work a company would otherwise do. Either way, it should usually cover:

• Purpose and scope: what the venture will and will not do
• Contributions: cash, assets, services or IP, how in-kind contributions are valued, when they are due and who owns them
• Governance: who makes decisions, which matters need every partner's consent, and how deadlocks are resolved
• Management and signing authority: who runs day-to-day operations and what limits apply
• Funding: how future capital needs are met and what happens if a partner cannot or will not contribute
• Profits, costs and fund transfers: how revenue and costs are shared, how accounts are kept and shared, and how banking and currency restrictions are handled
• Intellectual property and know-how: who owns what, what is licensed and what happens on exit
• Non-compete and confidentiality: the scope, duration and territory
• Warranties and indemnities: what each partner promises about itself and what happens if the promise is wrong
• Conditions precedent: approvals, licences and documents that must exist before the agreement takes effect
• Term, exit and termination: duration, completion, buy-out, deadlock and what happens on breach
• Sanctions and change-of-law provisions: what happens if a partner becomes restricted or the rules change
• Governing law, dispute resolution and language: the venue, the rules and which language version prevails

Extra points for a corporate JV: share transfer restrictions such as lock-ins, pre-emption, tag-along and drag-along rights, appointment of directors, dividend policy and what happens on dissolution.

Extra points for a contractual JV: which partner signs contracts with third parties and how liability is allocated between partners, how project assets and bank accounts are held, who is responsible for employees, permits and tax filings, how disputes with customers are handled and what happens to project assets at the end. Because there is no company, these points are not covered by default corporate rules, so the agreement has to state them. Ask counsel how liability to third parties would be treated for your structure.

Iranian filings are made in Persian, so prepare a Persian version of anything that must be filed or relied on in Iran. Have a qualified translator and local counsel check that the English and Persian versions match, because differences can later become disputes.

7. Prepare the supporting documents for the chosen form

Corporate JV

A shareholders' agreement binds its parties, but the company's own constitution is what the registry and the company's officers follow. Prepare the articles of association, the founders' declarations and the initial board and signing-authority decisions. Ask counsel which of the agreed JV terms need to be written into the articles to be effective against the company, and which can remain in the private agreement.

Contractual JV

Prepare the operating documents that the agreement relies on: management committee rules, authority limits for each partner's representatives, a project budget and cost-sharing schedule, accounting and reporting procedures, a project bank account mandate, and the forms of contract to be signed with customers, suppliers and subcontractors.

8. Prepare the closing file

Prepare a closing checklist that lists every document, signatory, approval and filing, and who is responsible for each. Typical items include:

• The signed JV agreement, with certified translations where needed
• Board and shareholder or management resolutions of every party
• Powers of attorney and proof of signing authority
• Licences and approvals, including any FIPPA licence and sector approvals
• Evidence of capital paid in or assets contributed
• For a corporate JV: articles of association, share register, board appointments and Official Gazette publication of incorporation
• For a contractual JV: the management committee appointments, project bank mandate, insurance and the initial third-party contracts
• Bank mandates, tax registrations and notifications
• Where a partner buys into an existing company: share transfer documents, updated registers and a disclosure letter or schedule

Do not treat signature as completion. In Iran, changes to a company generally take effect against third parties through registration and publication, so completion of a corporate JV should be tied to those steps. For a contractual JV, tie completion to the approvals and conditions in the agreement.

9. Keep the file after completion

After closing, keep a complete set of signed documents, filings, approvals and correspondence. Diary the dates for licence deadlines, capital-transfer deadlines, renewals and review points. If the JV later changes partners, adds capital or ends, this record will be the starting point for the next set of documents.

Common documentation mistakes

• Using an English name or an informal trade name instead of the Persian legal name and National ID
• Not checking who actually has authority to sign for each partner
• Starting commercial negotiations before the sanctions position is clear
• Relying on an MoU that leaves binding and non-binding clauses unclear
• Running a contractual JV without saying who signs, who is liable and who owns project assets
• Valuing in-kind contributions without evidence
• Drafting only in English when a Persian version is needed for filing or enforcement
• Treating the shareholders' agreement as enough without aligning the articles of association
• Paying or contributing capital before approvals and conditions are in place
• Not keeping a record of what was checked, when and by whom

How Iranlook can help you prepare for a joint venture

Iranlook prepares English-language reports on Iranian companies using available company information and local records, including official notices, tax-related sources, trademark records and securities disclosures. A Company Report can help you review a potential partner. An Enhanced Due Diligence Report adds tailored enquiries by our experts, such as checking production capacity with the company, reviewing financial documents or obtaining a financial credit assessment from a source agreed with you.

These reports support your preparation, but they do not replace legal advice, sanctions screening, valuation or the drafting of the JV documents.

Frequently asked questions

Should we form a company or sign a contractual JV?

A company gives the venture its own legal personality and a clear ownership structure, but it needs registration and ongoing corporate compliance. A contractual JV is lighter to set up but depends heavily on the quality of the agreement, particularly on liability, ownership of assets and exit. The right choice depends on the project, the sector, the tax position and the sanctions analysis, so take advice before deciding.

Is an MoU enough to start a joint venture?

Only if it is drafted as a binding agreement with enough detail on contributions, decision-making, liability and exit. Many MoUs are written as statements of intention and leave the hard points open. Be clear about which clauses bind the parties.

Do I need a local partner to enter a joint venture in Iran?

Not necessarily as a matter of foreign-investment law, but commercial, sector or sanctions reasons may make a partner advisable or required for particular projects. Take advice for your sector.

Is a FIPPA licence compulsory?

It is needed to receive the protections and privileges that FIPPA gives to foreign investment. A venture can proceed without one, but then ordinary Iranian law applies and those protections are not available. Whether you can invest at all is a separate sanctions question.

Which documents need to be in Persian?

Anything filed with Iranian authorities and anything you may need to rely on in Iranian courts or offices, in practice. Use a qualified translator and have local counsel confirm the versions match.