Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.
Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Iran. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.
|No.||Procedure||Time to Complete||Associated Costs|
|1||Search for a company name; obtain a name reservation letter from the Baghdad Chamber of Commerce||2 days||IQD 500,000|
|2||Hire a lawyer to draft articles of association||1 day||about IQD 1,500,000|
|3||Deposit initial capital at commercial bank and obtain confirmation receipt||2 days||IQD 5,000|
|4||File for registration at the Commercial Registry||14 days||IQD 250,000 - 350,000|
|5||Make company seal||2 days||IQD 20,000|
|6||Obtain registration certificate||1 day||included in procedure 4|
|7||Report to tax authority to establish tax registration||2 days||IQD 450,000|
|8||Legalize accounting books||2 days||USD 150|
|9||Register employees for social security||3 days||IQD 20,000|
|10||Apply for a trade license||30- 60 days||IQD 200,000|