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Monetary and Banking Regulations



Based on the contents of the executive directive for monetary and banking operations in the free trade-industrial zones, the following regulations shall be effective in the Kish Free Zone:


1-     Banks and institutions are permitted to be registered in Kish Free Zone with Iranian or foreign capital and/or through partnership between Iranian and foreign sources.


2-     Establishment of banks, institutions, branch offices of a bank, and representative offices of the Iranian and foreign institutions in Kish Free Zone shall be subject to KFZOs proposal, issuance of establishment permit by the Central Bank and registration in the Kish Free Zone.


3-     Establishment of the representative offices of Iranian or foreign banks and institutions shall be subject to the agreement of the KFZO, Central Banks confirmation and registration in KFZ.


4-     The capital of banks and institutions can be wholly owned by the Iranian or foreign nationals or a combination of both.


5-     Banking units in KFZ are authorized, depending on the type of permit they have obtained, to engage in overseas banking affairs. External banking units are prohibited to engage in Rial-based transactions and should confine themselves to hard currency transactions.


6-     Establishment of banks or institutions in the region in the form of public or private joint stock with registered stocks shall be permissible in accordance with the regulations stipulated in the amendment bill to the Trade Law of 1968.


7-     Minimum amount of capital invested by the banking units in KFZ is determined as follows:


A: Domestic Banking Units


 Bank: minimum IR35,000,000,000 one hundred percent of which should be deposited   with the Central Bank in cash.

Credit Institutions: minimum IR15,000,000,000 one hundred percent of which should be deposited with the Central Bank in cash.


Foreign Bank branch or Credit Institutions: minimum IR10,000,000,000 one hundred percent of which should be deposited with the Central Bank in cash.


B: Foreign Banks


 Bank: Minimum US$10,000,000

 Foreign Bank Branch or Credit Institution: minimum US$3,000,000 one hundred percent of which should be deposited with the Central Bank.

8-     Establishment of money-changing center in KFZ shall be subject to the proposal by the KFZO, issuance of permit by the Central Bank and issuance of operation license specifically in the form of company with joint liability and the minimum capital to be paid by the foreign exchange unit shall be IR500,000,000.


9-     Transaction of all currencies against the Iranian Rial or other currencies as well as transfer of hard currency in the KFZ by the real and corporate persons are permissible.


10- All Foreign currencies may be freely transferred from outside Iran into KFZ and from there to other free zones of the country, or to outside Iran.  Transfer of foreign currency in any form from the free zone to other  parts of Iran or vice versa shall be subject to foreign exchange regulations.


11- The parity rate of hard currency in the KFZ shall be determined on the basis of free market supply and demand mechanism.


12- The Iranian Rial-based transactions by the banking units in the region shall be subject to interest-free banking operations law. In their hard currency transactions, banks are authorized to pursue international banking practices.


13-               Credit institutions are not authorized to open interest-free current accounts or other accounts in the Iranian Rails or foreign     currency.    


14-        Foreign banking units and units that have obtained foreign exchange transaction permit from the Central Bank are authorized, in accordance with the international banking procedures, to render services to their clients as follows:


-         Establishment of correspondence relations with other banks.

-         Execution of all kinds of money transfers on behalf of self or clients.

-        Execution of all transactions related to purchase and sale of  foreign currencies in cash  on behalf of self or clients.

-         Current account operations (except for the credit institutions).

-         Saving account operations.

-         Holding of various time-limited deposits with varying maturities rate.

-         Obtaining various kinds  of loans and credits.

-       Issuance, buying, selling, underwriting and holding of bonds participating and bonds debenture subject to approval of the Central Bank.

-         Granting various kinds  of loans.

-         Buying, discounting and guaranteeing various kinds of commercial bills.

-         Undertaking  all matters concerning letters of  credit, bills payable, drafts and bills of guarantee.

-         Asset management and provision of investment services for securities on behalf of  clients. 

-         Handling of all deposit services and other managerial affairs.

-         Conducting other authorized banking services and transactions in foreign  currencies.


16- The foreign exchange transactions of banking units in KFZ are not subject to foreign exchange regulations effective in other parts of the country while banking operation fees, rate of exchange and facility profit shall be determined in accordance with supply and demand forces.

17- Banks and credit institutes are obliged to observe and respect regulations related to the proportion of capital adequacy that are advised by the Central Bank with due regard to current international regulations.


Exchange Center


Establishment of exchange center in Kish Free Zone requires K.F.Z.O. approval in addition to the permission of CBI.

Establishment of foreign exchange centers are done exclusively in  the form of general partnerships and the minimum amount of their deposited capital shall be five hundred million (500000000) Rials.



Foreign Exchange Transactions in Kish


Buying and selling of all foreign currencies by Rials and other currencies and performing all types of foreign currency transactions by real and legal entities are authorized and permitted in Kish Free Zone.

Transfer of foreign currencies from abroad into Kish Free Zone and from Kish to other Free Zones or foreign countries are permitted. transfer of foreign currencies in any form to other parts of the country and vice versa are subject to the foreign currency regulations of the mainland. The exchange to rates of foreign currencies as well as the conversion rates of exchange to Rials are determined on the basis of supply and demand of the free market.

All of the banking transactions conducted in Rials by any of the banks in the Zone are subject to the Islamic banking regulations of Iran. However these banks should adhere to international banking norms and regulations in their foreign currency transactions.

Credit institutes are not authorized to open any type of account whether in Rials or foreign currencies which may be drawn on by cheques.

Banks may determine estimated profit of their client's deposits based on their contract with depositors and pay them at designated intervals.

Foreign currency transactions of the banks in Kish Free Zone are not subject to the mainland banking regulations. Fees for banking transactions, exchange rates and interest rates are determined on the basis of supply and demand of the free market. Banks and credit institutes are obligated to observe the ratio of adequate capital determined by CBI and adhere to international banking norms and regulations.

Foreign currency transactions between the banks located on the Island have been conducted since 2003 in accordance with regulations issued by CBI.

Foreign banks and institutes which have obtained the permit to conduct foreign currency transactions from CBI may render services and perform banking transactions on the basis of international banking norms, regulations and standards.






  Copyright By :  Kish Trade Promotion Center  2002