Iran Risk Snapshot

There are serious legal, political, financial, and reputational risks associated with doing business in Iran. Iran consistently ranks at or near the bottom of key measurements produced by leading think tanks, NGOs and UN agencies indicative of a positive business environment. The following graph aggregates 27 such indices for Iran, showing the percentile rank for each index:
 

Financial
Legal
Socio-Political
100%
90
80
70
60
50
40
30
20
10
0
30%
Iran
Financial Market Development
Financial Market Development
Iran is characterized by poor infrastructure, poor financing, unfavorable investment laws, and lack of transparency. The variables that influence ease of business connote severe banking and money laundering risk, sanctions risk, insurance risk, reputational risk, IRGC front company risk, and hacking and cybersecurity risk.
100
Forbes ranks Iran 100 out of 153 countries in its 2018 list of Best Countries to do Business.
160
The World Bank ranks Iran 128 out of 190 countries for Ease of Doing Business, ranking 173 for starting a business, 121 for trading across borders, 131 for resolving insolvency, and 173 for protecting minority investors in its Doing Business 2019 report.
98
The World Economic Forum ranks Iran 89 out of 140 countries in its 2018 Global Competitiveness Index, with rankings as low as 134 for products market efficiency, 136 for labor market efficiency, and 98 for financial market development.
37%
Iran
Global Competitiveness
Global Competitiveness
Iran is characterized by poor infrastructure, poor financing, unfavorable investment laws, and lack of transparency. The variables that influence ease of business connote severe banking and money laundering risk, sanctions risk, insurance risk, reputational risk, IRGC front company risk, and hacking and cybersecurity risk.
100
Forbes ranks Iran 100 out of 153 countries in its 2018 list of Best Countries to do Business.
124
The World Bank ranks Iran 128 out of 190 countries for Ease of Doing Business, ranking 173 for starting a business, 121 for trading across borders, 131 for resolving insolvency, and 173 for protecting minority investors in its Doing Business 2019 report.
89
The World Economic Forum ranks Iran 89 out of 140 countries in its 2018 Global Competitiveness Index, with rankings as low as 134 for products market efficiency, 136 for labor market efficiency, and 98 for financial market development.
4%
Iran
Products Market Efficiency
Products Market Efficiency
Iran is characterized by poor infrastructure, poor financing, unfavorable investment laws, and lack of transparency. The variables that influence ease of business connote severe banking and money laundering risk, sanctions risk, insurance risk, reputational risk, IRGC front company risk, and hacking and cybersecurity risk.
100
Forbes ranks Iran 100 out of 153 countries in its 2018 list of Best Countries to do Business.
124
The World Bank ranks Iran 128 out of 190 countries for Ease of Doing Business, ranking 173 for starting a business, 121 for trading across borders, 131 for resolving insolvency, and 173 for protecting minority investors in its Doing Business 2019 report.
134
The World Economic Forum ranks Iran 89 out of 140 countries in its 2018 Global Competitiveness Index, with rankings as low as 134 for products market efficiency, 136 for labor market efficiency, and 98 for financial market development.
3%
Iran
Labor Market Efficiency
Labor Market Efficiency
Iran is characterized by poor infrastructure, poor financing, unfavorable investment laws, and lack of transparency. The variables that influence ease of business connote severe banking and money laundering risk, sanctions risk, insurance risk, reputational risk, IRGC front company risk, and hacking and cybersecurity risk.
100
Forbes ranks Iran 100 out of 153 countries in its 2018 list of Best Countries to do Business.
124
The World Bank ranks Iran 128 out of 190 countries for Ease of Doing Business, ranking 173 for starting a business, 121 for trading across borders, 131 for resolving insolvency, and 173 for protecting minority investors in its Doing Business 2019 report.
136
The World Economic Forum ranks Iran 89 out of 140 countries in its 2018 Global Competitiveness Index, with rankings as low as 134 for products market efficiency, 136 for labor market efficiency, and 98 for financial market development.
9%
Iran
Starting a Business
Starting a Business
Iran is characterized by poor infrastructure, poor financing, unfavorable investment laws, and lack of transparency. The variables that influence ease of business connote severe banking and money laundering risk, sanctions risk, insurance risk, reputational risk, IRGC front company risk, and hacking and cybersecurity risk.
100
Forbes ranks Iran 100 out of 153 countries in its 2018 list of Best Countries to do Business.
173
The World Bank ranks Iran 128 out of 190 countries for Ease of Doing Business, ranking 173 for starting a business, 121 for trading across borders, 131 for resolving insolvency, and 173 for protecting minority investors in its Doing Business 2019 report.
100
The World Economic Forum ranks Iran 89 out of 140 countries in its 2018 Global Competitiveness Index, with rankings as low as 134 for products market efficiency, 136 for labor market efficiency, and 98 for financial market development.
36%
Iran
Trading Across Borders
Trading Across Borders
Iran is characterized by poor infrastructure, poor financing, unfavorable investment laws, and lack of transparency. The variables that influence ease of business connote severe banking and money laundering risk, sanctions risk, insurance risk, reputational risk, IRGC front company risk, and hacking and cybersecurity risk.
100
Forbes ranks Iran 100 out of 153 countries in its 2018 list of Best Countries to do Business.
121
The World Bank ranks Iran 128 out of 190 countries for Ease of Doing Business, ranking 173 for starting a business, 121 for trading across borders, 131 for resolving insolvency, and 173 for protecting minority investors in its Doing Business 2019 report.
130
The World Economic Forum ranks Iran 89 out of 140 countries in its 2018 Global Competitiveness Index, with rankings as low as 134 for products market efficiency, 136 for labor market efficiency, and 98 for financial market development.
35%
Iran
Best Countries for Business
Best Countries for Business
Iran is characterized by poor infrastructure, poor financing, unfavorable investment laws, and lack of transparency. The variables that influence ease of business connote severe banking and money laundering risk, sanctions risk, insurance risk, reputational risk, IRGC front company risk, and hacking and cybersecurity risk.
100
Forbes ranks Iran 100 out of 153 countries in its 2018 list of Best Countries to do Business.
124
The World Bank ranks Iran 128 out of 190 countries for Ease of Doing Business, ranking 173 for starting a business, 121 for trading across borders, 131 for resolving insolvency, and 173 for protecting minority investors in its Doing Business 2019 report.
69
The World Economic Forum ranks Iran 89 out of 140 countries in its 2018 Global Competitiveness Index, with rankings as low as 134 for products market efficiency, 136 for labor market efficiency, and 98 for financial market development.
33%
Iran
Ease of Doing Business
Ease of Doing Business
Iran is characterized by poor infrastructure, poor financing, unfavorable investment laws, and lack of transparency. The variables that influence ease of business connote severe banking and money laundering risk, sanctions risk, insurance risk, reputational risk, IRGC front company risk, and hacking and cybersecurity risk.
100
Forbes ranks Iran 100 out of 153 countries in its 2018 list of Best Countries to do Business.
128
The World Bank ranks Iran 128 out of 190 countries for Ease of Doing Business, ranking 173 for starting a business, 121 for trading across borders, 131 for resolving insolvency, and 173 for protecting minority investors in its Doing Business 2019 report.
69
The World Economic Forum ranks Iran 89 out of 140 countries in its 2018 Global Competitiveness Index, with rankings as low as 134 for products market efficiency, 136 for labor market efficiency, and 98 for financial market development.
100%
90
80
70
60
50
40
30
20
10
0
9%
Iran
Protecting Minority Investors
Protecting Minority Investors
Iran is characterized by poor infrastructure, poor financing, unfavorable investment laws, and lack of transparency. The variables that influence ease of business connote severe banking and money laundering risk, sanctions risk, insurance risk, reputational risk, IRGC front company risk, and hacking and cybersecurity risk.
100
Forbes ranks Iran 100 out of 153 countries in its 2018 list of Best Countries to do Business.
173
The World Bank ranks Iran 128 out of 190 countries for Ease of Doing Business, ranking 173 for starting a business, 121 for trading across borders, 131 for resolving insolvency, and 173 for protecting minority investors in its Doing Business 2019 report.
10%
Iran
Regulatory Quality
Regulatory Quality
Iran is characterized by poor governance rankings, which represent poor regulation, lack of voice and accountability, and low political stability. In Iran, this creates high degrees of IRGC front company risk, country risk, terror risk, banking and AML risk, kidnap and arrest risk, insurance risk, and possibilities of violation of the JCPOA. The World Bank consistently ranks Iran with a negative governance score across all variables measured. The ranking system is -2.5 to 2.5 with higher values indicating better governance.
-1.20
Regulatory Quality: The World Bank ranks Iran -1.20, or in the 10th percentile, in its 2017 Governance Indicators for regulatory quality. As the World Bank describes, regulatory quality captures perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development.
-1.39
Voice and Accountability: The World Bank ranks Iran -1.39, or in the 11th percentile, in its 2016 Governance Indicators for voice and accountability. As the World Bank describes, voice and accountability captures perceptions of the extent to which a country's citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association, and a free media.
-0.74
Political Stability: The World Bank ranks Iran -.74, or in the 20th percentile, in its 2016 Governance Indicators for political stability and the absence of violence/ terrorism. As the World Bank describes, Political Stability and Absence of Violence/Terrorism measures perceptions of the likelihood of political instability and/or politically motivated violence, including terrorism.
16%
Iran
Resolving Insolvency
Resolving Insolvency
Iran is characterized by poor infrastructure, poor financing, unfavorable investment laws, and lack of transparency. The variables that influence ease of business connote severe banking and money laundering risk, sanctions risk, insurance risk, reputational risk, IRGC front company risk, and hacking and cybersecurity risk.
100
Forbes ranks Iran 100 out of 153 countries in its 2018 list of Best Countries to do Business.
131
The World Bank ranks Iran 128 out of 190 countries for Ease of Doing Business, ranking 173 for starting a business, 121 for trading across borders, 131 for resolving insolvency, and 173 for protecting minority investors in its Doing Business 2019 report.
128
The World Economic Forum ranks Iran 89 out of 140 countries in its 2018 Global Competitiveness Index, with rankings as low as 134 for products market efficiency, 136 for labor market efficiency, and 98 for financial market development.
22%
Iran
Intellectual Property
Intellectual Property
Iran is characterized by poor protections for intellectual property rights. The low degree of protection for intellectual property rights presents a significant risk to international companies as they are highly vulnerable to Iranian misappropriation of trademarks, patents, industrial designs, and trade secrets.
98
Property Rights Alliance ranks Iran 98 out of 125 in its 2018 Protection of Intellectual Property Rights sub-index, ranking countries commitments to the protection of intellectual property rights. The International Property Rights Index also shows Iran ranks 91 out of 125 for Patent Protection.
26%
Iran
Rule of Law
Rule of Law
Iran is characterized by low rule of law, which entails corruption, lack of constraints on government power, and low protection of civil liberties. These realities put companies at severe risk for dealing with the Islamic Revolutionary Guard Corps, banking, money laundering and terrorist financing risk, kidnap and arrest risk, and reputational risk.
80
The World Justice Project ranks Iran 80 out of 113 countries for overall Rule of Law with rankings as low as 111 for fundamental rights and 102 for open government in its 2017/2018 Rule of Law Index.
-0.68
The World Bank ranks Iran -.68, or in its 26th percentile, for Rule of Law in its 2017 Governance Indicators.
4%
Iran
AML
Anti-Money Laundering and Terrorist Financing
Iran is characterized by a lack of proper due diligence and controls, which puts international firms immediately at risk for banking and money laundering risk, sanctions risk, and terrorist financing risk. Further, the overarching implications about insecurity in the banking sector create difficulty in financing business ventures.
High Risk
The Financial Action Task Force designates Iran as a High-risk and non-cooperative jurisdiction.
1
The Basel Institute on Governance ranks Iran last (1 out of 146 countries) in its 2017 Basel Anti-Money Laundering (AML) Index, indicating that Iran is the world's most vulnerable country to money laundering and terrorist financing. The Institute examines countries AML and Countering the Financing of Terrorism (CFT) standards as well as other risk factors, including corruption, financial standards, political disclosure and rule of law.
18%
Iran
Corruption
Corruption
Iran is characterized by a high degree of corruption, which creates significant risk for loss of assets and financial dealings with perpetrators of criminal activity. In the Iranian context, where a significant amount of corruption is the economic aggrandizement of the Islamic Revolutionary Guard Corps, there is significant risk of doing business with the Islamic Revolutionary Guard Corps, banking and money laundering risk, sanctions risk, and terrorist financing risk.
130
Transparency International ranks Iran 130 out of 180 on its 2017 Corruption Perceptions Index.
100%
90
80
70
60
50
40
30
20
10
0
15%
Iran
Political Rights
Political Rights
Iran is characterized by a lack of political rights and civil liberties, which connotes a poor business environment for firms seeking partnership and profit. Key risks based on the lack of freedom in Iran are kidnap and arrest risk, hacking and cybersecurity risk, insurance risk, terror risk, country and corruption risk, and reputational risk.
6
Freedom House ranks Iran 18 out of 100 for its aggregate freedom score, with 100 being the most free, and a score of 6 out of 7 for political rights and civil liberties, with 7 being the least free on its Freedom in the World 2018 by Aggregate Score.
156
The Heritage Foundation ranks Iran as mostly unfree ranking it 156 out of 186 countries on its 2018 Index of Economic Freedom.
15%
Iran
Civil Liberties
Civil Liberties
Iran is characterized by a lack of political rights and civil liberties, which connotes a poor business environment for firms seeking partnership and profit. Key risks based on the lack of freedom in Iran are kidnap and arrest risk, hacking and cybersecurity risk, insurance risk, terror risk, country and corruption risk, and reputational risk.
6
Freedom House ranks Iran 18 out of 100 for its aggregate freedom score, with 100 being the most free, and a score of 6 out of 7 for political rights and civil liberties, with 7 being the least free on its Freedom in the World 2018 by Aggregate Score.
156
The Heritage Foundation ranks Iran as mostly unfree ranking it 156 out of 186 countries on its 2018 Index of Economic Freedom.
3%
Iran
Gender Gap
Gender Gap
Iran is characterized by a significant gender gap, which can translate into long term implications for instability, subpar growth, and manifest in the short term as a significant reputational risk for companies. The lack of parity between international and Iranian standards and opportunities for women could cause significant reputational cost. It is also a signifier of international law and treaties violation given the disregard for international standards.
140
The World Economic Forum ranks Iran 140 out of 144 countries on its 2017 Gender Gap Index.
28%
Iran
Minority Group Protection
Minority Group Protection
Iran is characterized by flagrant human rights violations, which are demonstrated by the minority group protection index, restrictions on religion, and LGBT criminalization. Disregard for human rights signifies low regard for toleration, rule of law, or democratic principles. This connotes severe risk for international firms when it comes to kidnap and arrest risk, terror risk, violations of international law and treaties as well as the ensuing reputational risk associated with doing business with human rights violators.
20
Minority Group Protection: Minority Rights Group International ranks Iran as 20 out of 70 countries in its 2018 People's Under Threat index.
Very High
The Pew Research Center ranks Iran as 3 of 23 countries in the Very high category when ranking 198 countries and territories in their index of government restrictions on religion. The classifications were Very High, High, Moderate, and Low.
Death Penalty
LGBT Criminalization: The International Lesbian, Gay, Bisexual, Trans and Intersex Association ranks Iran among the very worst countries for treatment of their LGBT citizens on its 2017 map of Sexual Orientation Laws in the World - Criminalisation. Iran is 1 of 8 countries that has sexual orientation laws that impose the death penalty out of the 194 countries surveyed.
2%
Iran
Religious Restrictions
Religious Restrictions
Iran is characterized by flagrant human rights violations, which are demonstrated by the minority group protection index, restrictions on religion, and LGBT criminalization. Disregard for human rights signifies low regard for toleration, rule of law, or democratic principles. This connotes severe risk for international firms when it comes to kidnap and arrest risk, terror risk, violations of international law and treaties as well as the ensuing reputational risk associated with doing business with human rights violators.
19
Minority Group Protection: Minority Rights Group International ranks Iran as 20 out of 70 countries in its 2018 People's Under Threat index.
Very High
The Pew Research Center ranks Iran as 3 of 23 countries in the Very high category when ranking 198 countries and territories in their index of government restrictions on religion. The classifications were Very High, High, Moderate, and Low.
Death Penalty
LGBT Criminalization: The International Lesbian, Gay, Bisexual, Trans and Intersex Association ranks Iran among the very worst countries for treatment of their LGBT citizens on its 2017 map of Sexual Orientation Laws in the World - Criminalisation. Iran is 1 of 8 countries that has sexual orientation laws that impose the death penalty out of the 194 countries surveyed.
13%
Iran
LGBT Criminalization
LGBT Criminalization
Iran is characterized by flagrant human rights violations, which are demonstrated by the minority group protection index, restrictions on religion, and LGBT criminalization. Disregard for human rights signifies low regard for toleration, rule of law, or democratic principles. This connotes severe risk for international firms when it comes to kidnap and arrest risk, terror risk, violations of international law and treaties as well as the ensuing reputational risk associated with doing business with human rights violators.
19
Minority Group Protection: Minority Rights Group International ranks Iran as 20 out of 70 countries in its 2018 People's Under Threat index.
Very High
The Pew Research Center ranks Iran as 3 of 23 countries in the Very high category when ranking 198 countries and territories in their index of government restrictions on religion. The classifications were Very High, High, Moderate, and Low.
Death Penalty
LGBT Criminalization: The International Lesbian, Gay, Bisexual, Trans and Intersex Association ranks Iran among the very worst countries for treatment of their LGBT citizens on its 2017 map of Sexual Orientation Laws in the World - Criminalisation. Iran is 1 of 8 countries that has sexual orientation laws that impose the death penalty out of the 194 countries surveyed.
12%
Iran
Voice and Accountability
Voice and Accountability
Iran is characterized by poor governance rankings, which represent poor regulation, lack of voice and accountability, and low political stability. In Iran, this creates high degrees of IRGC front company risk, country risk, terror risk, banking and AML risk, kidnap and arrest risk, insurance risk, and possibilities of violation of the JCPOA. The World Bank consistently ranks Iran with a negative governance score across all variables measured. The ranking system is -2.5 to 2.5 with higher values indicating better governance.
-1.20
Regulatory Quality: The World Bank ranks Iran -1.20, or in the 10th percentile, in its 2017 Governance Indicators for regulatory quality. As the World Bank describes, regulatory quality captures perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development.
-1.30
Voice and Accountability: The World Bank ranks Iran -1.30, or in the 12th percentile, in its 2017 Governance Indicators for voice and accountability. As the World Bank describes, voice and accountability captures perceptions of the extent to which a country's citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association, and a free media.
-0.93
Political Stability: The World Bank ranks Iran -.93, or in the 15th percentile, in its 2017 Governance Indicators for political stability and the absence of violence/ terrorism. As the World Bank describes, Political Stability and Absence of Violence/Terrorism measures perceptions of the likelihood of political instability and/or politically motivated violence, including terrorism.
8%
Iran
Freedom of Press
Freedom of the Press
Iran is characterized by its persecution and imprisonment of journalists and overarching regime control of the media. This control is coupled with high degrees of internet censorship and the misuse of telecommunications to monitor and suppress the civilian populace. These realities create significant operational, cybersecurity, and reputational risk for international companies doing business in Iran.
164
Reporters Without Borders ranks Iran 164 out of 179 on its 2018 World Press Freedom Index.
15%
Iran
Political Stability
Political Stability
Iran is characterized by poor governance rankings, which represent poor regulation, lack of voice and accountability, and low political stability. In Iran, this creates high degrees of IRGC front company risk, country risk, terror risk, banking and AML risk, kidnap and arrest risk, insurance risk, and possibilities of violation of the JCPOA. The World Bank consistently ranks Iran with a negative governance score across all variables measured. The ranking system is -2.5 to 2.5 with higher values indicating better governance.
-1.20
Regulatory Quality: The World Bank ranks Iran -1.20, or in the 10th percentile, in its 2017 Governance Indicators for regulatory quality. As the World Bank describes, regulatory quality captures perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development.
-1.30
Voice and Accountability: The World Bank ranks Iran -1.30, or in the 12th percentile, in its 2017 Governance Indicators for voice and accountability. As the World Bank describes, voice and accountability captures perceptions of the extent to which a country's citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association, and a free media.
-0.93
Political Stability: The World Bank ranks Iran -.93, or in the 15th percentile, in its 2017 Governance Indicators for political stability and the absence of violence/ terrorism. As the World Bank describes, Political Stability and Absence of Violence/Terrorism measures perceptions of the likelihood of political instability and/or politically motivated violence, including terrorism.
32%
Iran
Travel and Tourism
Travel and Tourism
Iran is characterized by poor tourist service infrastructure, prioritization of travel and tourism, international openness, environmental sustainability, health and hygiene, and air transport infrastructure. Poor travel and tourism infrastructure and protections yield high reputational risk, hacking and cybersecurity risk, kidnap and arrest risk, and IRGC front company risk given the pervasive nature of the IRGC in the Iranian economy. There is also the possibility of insurance risk for companies looking to invest in the travel and tourism industries.
93
The World Economic Forum ranks Iran 93 out of 136 countries on its 2017 Travel & Tourism Competitiveness Index, ranking as low as 119 for environmental sustainability and 87 for safety and security.
56%
Iran
Environmental Protection
Environmental Protection
Iran is characterized by poor environmental protection, which manifests in low rankings for air quality, health impacts, water and sanitation, water resources, and biodiversity and habitat. These risks pose risks to foreign personnel working in Iran and are key indicators for potential future conflict and political unrest. These factors likely translate into continued high country risk, insurance risk, and reputational risk.
80
The Yale Center for Environmental Law and Policy and Yale Data Drive Environmental Solutions Group ranks Iran 80/180 for its environmental performance in its 2018 Environmental Protection Index. .
16%
Iran
Overall Freedom
Overall Freedom
Iran is characterized by a lack of political rights and civil liberties, which connotes a poor business environment for firms seeking partnership and profit. Key risks based on the lack of freedom in Iran are kidnap and arrest risk, hacking and cybersecurity risk, insurance risk, terror risk, country and corruption risk, and reputational risk.
18
Freedom House ranks Iran 18 out of 100 for its aggregate freedom score, with 100 being the most free, and a score of 6 out of 7 for political rights and civil liberties, with 7 being the least free on its Freedom in the World 2018 by Aggregate Score.
156
The Heritage Foundation ranks Iran as mostly unfree ranking it 156 out of 186 countries on its 2018 Index of Economic Freedom.