Visiting Iran is an absolute pleasure. Persian (and really all Middle Eastern) hospitality is deeply rooted in the culture and the people are curious about foreigners. Getting in is relatively easy, compared to many of its neighbours and neighbours’ neighbours. Most nationalities can either enter visa free or apply for visa upon arrival. The big exceptions are Israeli and US passport holders. The latter is not allowed to enter the country and US persons must be a part of a tour group if not a diplomatic mission.
I found myself in Iran a couple of weeks ago, flying into Tehran from Amman, Jordan. The purpose of the visit was to visit friends and oversee the installation of new equipment in a Tehran data center. However, I had been tasked with opening a bank account for a client, if possible.
If possible.
Those were the keywords.
In theory, Iran should be attractive to all sorts of shady people, tax evaders, money launderers, and other clandestine types. My client is a non-Middle Eastern who is trying to tap into the regional market with a new product sold online. The reason for opening a bank account in Iran would be to facilitate accepting payments from Iran’s increasingly wealthy and tech-savvy population.
Due to international sanctions, it is very difficult to receive payments from Iran. In fact, it may be illegal to even attempt to send money to or receive money from Iran in certain countries.
Meeting the Bank
Under a scorching sun, I met with a friend at a café near the Vali-e Asr square. We had made arrangements with the bank in advance and my friend was there to introduce me to the bank.
As it turned out, however, an introducer was not necessary. It helped with navigating the hitherto unknown Iranian banking sector, though.
The bank staff was very friendly throughout the process. Some of the documents I had with me where in English and some in Arabic. The bank was willing to accept them provided I pay for the translation to Farsi. The fee was very modest.
Bank accounts and a merchant account were opened before the translations were done after the bank manager quickly read through the documents.
Using an Iranian Bank Account
Banking in Iran needs to be done extremely carefully. We set up a cash-flow structure that in no way would interfere with embargoes and sanctions against Iran, ensuring that the funds from Iran either stayed in Iran or left the country through permissive means.
Internet banking is a few years behind the internet banking of banks in jurisdictions with a more modern banking system. It’s rudimentary but it works.
Since neither Visa nor MasterCard operate in Iran, you are left with a confusing mix of domestic debit cards, all of which are useless outside of Iran.
Since October 2012, SWIFT has disconnected Iranian banks. Wire transfers in and out of the country would have to pass through other channels.
Conclusion
This was more of a learning experience. I cannot recommend banking in Iran unless you are doing business in Iran.
Hi Streber,
Hope you are well.
Since then, SWIFT has now been connected to Iran again and banks are able to transfer in and out money (i assume). But what about the sanctions from other countries? Is there any limit of the amount of money you can transfer OUT from Iran?
Please reply. Would love you forever!
Regards
Oh one more thing. What documents did you have to bring for opening an account? Sounded really smooth there. A notarized passport, bank ref etc? Does the passport have to carry a VISA stamp?
Thanks in advance.
I had brought all the usual documents and even had some translated to Farsi. Passport copies, corporate documents, references, bank statements, business plans, invoices/transactions history. Not sure if I had to show it all to every single bank.
I expect it’s a bit different now when the banks have to carefully guard their highly-scrutinized correspondent accounts, so I expect things to be a bit tighter now. While they might not ask for any unreasonable documents (except maybe multiple references), they may insist on having close economic ties to Iran or regional Iran-friendly nations.
Hi,
I’m not involved in the day to day with using these bank accounts that were opened. From what I’m told, wiring funds to and from Europe is now possible via SWIFT but it’s not as easy as with other countries. The recipient bank and correspondent bank will practically always want to see an invoice and perform some form of due diligence.
Many banks are still working on adjusting to all the new features of the SWIFT network. There is a lot of manual work being done, even after over a year.
Thank you so much for your solid answers as always. Hahaha. I want to hug you one day. Goddamn you are awesome (not sucking up, just me being honest).
Sounds lovely. LAST questions regarding this matter>
1) You dont happen to have any experiences with Iraq? If yes, how was the process etc?
2) Can the top banks be trusted over there these days…?
3) Any idea if UAE banks are keen to open bank accounts for either Iran or Iraq companies?
Thanks in advance.
1. A visit to Iraq is in the Maybe pile for this year. My old experiences are not applicable anymore.
2. I’m told it’s possible but people generally don’t leave funds there that they can store elsewhere (foreign currencies).
3. Based on what I’ve seen, I wouldn’t use the word keen… It’s possible but both jurisdiction pose significant risk problems. You’ll need to demonstrate that have a legitimate reason for banking in the area (i.e. actually trading there) as well as show an understanding of the risks of trading in these countries, especially Iraq, and how you mitigate them.
today I was was with a client in Mashreq Bank and he had to sign, that he is not dealing with Iran or Iranian companies. So I guess, there is a very little chance to open account in UAE for Iranian company. Similarity goes for Iraq company, do not know any bank which would open it
I have a company involved in trading grain. Many clients are from Iran, and it is a real burden to receive money from them. Considering the fact that agricultural products are excluded from sanctions, no bank is keen to work with.
Any suggestions to me, how I can handle this? Any bank recommendation which might be willing to work with my clients?
Very great posts!