The Lebanese private sector is ready to tap the Iranian market once sanctions are lifted in early 2016, according to the timeline set by international negotiators. Two Lebanese economic delegations visited Iran last month, representing the private and public sectors, to explore investment opportunities. The official delegations headed by the Ministry of Finance included five senior officials from the ministry and chairmen of economic bodies. It also included expatriates from Africa and other countries. The delegation included 30 businesspeople from different sectors.
Iranian companies are looking to benefit from Lebanese experience in management, creativity, and know-how in regional and international markets, said participants in the delegations. Iran is heading towards privatization. "Industrialists have opportunities to acquire some of the factories that will be privatized, such as metal, cement, and advanced technology factories," said Wajih Bizri, Chairman of the local chapter of the International Chamber of Commerce and member of the delegation to Iran. Iranians have many free economic zones on all borders. Locals will have opportunities to establish their companies in these tax-free zones. The infrastructure still requires more development. Bizri said that there is a need for roads, water treatment and wastewater projects. "Entrepreneurs from all countries are flooding to Iran. Locals should be aggressive to exploit this opportunity, without relying on the Government," said Bizri.
There is a shortage of restaurants and hotels in Iran and this gap will increase after opening its markets. "This scarcity is opening prospects to local entrepreneurs to invest in the Country's tourism, hospitality, and franchise sectors, said Charles Arbid, Chairman of Lebanese Franchise Association and member of the delegation to Iran. Iranians showed their interest in Lebanese cuisine and hospitality management. "Customers consider Lebanon a significant trademark. We can exploit this opportunity to export our own concepts and franchises," said Arbid. Iranians also showed interest in helping them establish their own franchise association to ease the entrance into international trademarks. Arbid said: "We revealed our readiness to transform our knowhow and expertise."
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The delegations also discovered several opportunities in the services sector, mainly in insurance. "Iranians are waiting for the issuance of the decision to remove the sanctions to partner with reinsurance companies," said Antoine Issa, CEO of the MENA region at Allianz SNA. Issa said that insurance penetration rates are still low in Iran and growth expectations are high. Life and medical insurance are still limited there. Local entrepreneurs can own and develop property in Iran by establishing real estate companics.
Joe Kenaan, Chairman of Sodeco Gestion, said that they have discovered opportunities in the property management sector. "Only specialists can penetrate Iran, because Iranian real estate companies are mature, but they need management expertise, he said. There is opportunity to increase trade between both countries. The trade balance between Lebanon and Iran is still low, imports only reached $50 million and exports $3 million in 2014.
Lebanese entrepreneurs have the capabilities, interest, and readiness to enter Iran, but several obstacles should be overcome first," said Arbid. Customs fees imposed on goods imported into Iran are high. Several agreements should be signed between Lebanese and Iranian governments to facilitate the entrance of goods to the market. The operational costs, mainly the rental fees in commercial centers and malls in Iran, are very high. "Rental fees are inadequate with the market's activity, so there is need for reconsidering the prices," said Arbid.
The laws that protect the intellectual properties are not yet available in Iran. Arbid said that a Lebanese-Iranian committee will be created representing the private and public sectors to follow up on these issues. Another official delegation represented by the Ministry of Economy and Trade, including entrepreneurs will visit Iran soon to negotiate in overcoming the hindrances.
Lebanon Opportunities Magazine