Singapore, Iran Sign Investment Treaty

Following its landmark agreement with the international community regarding halting its nuclear weapons development programs, Iran has exploded onto the world stage. In what is the most recent in a series of new economic treaties and alliances, Iran and Singapore have signed an investment treaty designed to support Singapore companies that seek to invest in a market that, until recently, was embargoed from the outside world. 

Following its landmark agreement with the international community regarding halting its nuclear weapons development programs, Iran has exploded onto the world stage. In what is the most recent in a series of new economic treaties and alliances, Iran and Singapore have signed an investment treaty designed to support Singapore companies that seek to invest in a market that, until recently, was embargoed from the outside world. 

Several weeks ago, Iran and Japan entered into an investment guarantee designed to provide many of the same protections and incentives as the Singapore Treaty. The Singapore Treaty will provide the legal framework necessary to protect investors and to promote investments between the two nations. Singapore is the second country to sign such an agreement with Iran following the lifting of the UN sanctions against the Middle Eastern country last month.

According to The Straits Times, Singapore’s Minister for Trade and Industry, S. Iswaran, signed the Agreement on Reciprocal Promotion and Protection of Investments on Monday, February 29, 2016. Also known as a bilateral investment treaty, the treaty was also executed by Iswaran’s counterpart in Iran, Iran’s Minister of Finance and Economic Affairs, Ali Tayebnia.  

As Iswaran said following the announcement of the treaty signing, “We look forward to strengthening bilateral economic ties with our businesses collaborating on opportunities of mutual interest in Iran and other markets.”

Iswaran’s comments came while he was visiting Tehran for a three-day visit. Iswaran’s trip was designed to explore new business and investment opportunities as well as finalize the details of this trade agreement. Of course, it is no coincidence that Iswaran’s trip coincided with the Singapore Business Federation (SBF)’s one-week mission to the capital city of Iran. In addition to meeting with Minister of Finance and Economic Affairs, Ali Tayebnia, Iswaran also met with the Minister of Industries and Business, Mohammad Reza Nematzadeh.

With this bilateral investment treaty in place, Singapore investments will be treated by Iran just as favorably as any other investments, regardless of whether they were foreign or locally made. It also allows businesses to transfer capital and returns between the two nations without being caught up in an endless supply of red tape.

Singapore investors will have the option to resolve investment disputes through international arbitration.

Singapore companies have expressed renewed interest in re-establishing ties with the oil-rich Iran. “Singapore companies are known for our quality, reliability, and the service we deliver…but competition is greater than before and others are running very fast,” said Teo Siong Seng, SBF chairman and leader of the business mission. “We could start in a smaller way, but we should start to see some activities going forward from here.”