Purchase Order Template for Iran

When preparing a purchase order (PO) for Iran, ensuring compliance with local regulations is paramount. An "Approved Import Order" (SABT SEFARSH) is mandatory for customs clearance and must be registered electronically via the Comprehensive Trade System before shipment. Only legal entities or individuals holding a valid Iranian Commercial Card, issued by the Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA), are authorized to engage in import activities, meaning foreign exporters must work through an Iranian importer or authorized agent.

Your PO should also account for tax identification and currency. Businesses operating in Iran, including branches of foreign companies, are required to register with tax authorities and will be issued a Tax Identification Number (TIN) for all tax-related matters. The standard corporate tax rate is 25% for both resident and foreign entities. While the official currency is the Iranian Rial (IRR), daily transactions commonly use the Toman, where one Toman equals 10 Rials. Always clarify whether quoted prices are in Rials or Tomans to avoid confusion.

Tailoring your purchase order to Iranian business practices and logistical realities is crucial for smooth transactions. A comprehensive PO should clearly detail:

• Buyer's and Supplier's Information: Full names, addresses, and contact details.
• Product/Service Specifications: Accurate descriptions, quantities, unit prices, and total amounts.
• Terms and Conditions: Explicitly state payment terms (e.g., net 30), expected delivery dates, and the chosen shipping method.

For international transactions, specifying Incoterms 2020 rules (e.g., EXW, FCA, CPT, CIP, DAP, DPU, DDP for any mode of transport; FAS, FOB, CFR, CIF for sea and inland waterway transport) is essential to define responsibilities, costs, and risks between buyer and seller. Goods must comply with Iranian or internationally recognized standards, and certain categories like food, pharmaceuticals, and agricultural products require prior ministerial approval. Additionally, all imported goods must be labeled in Persian (Farsi), including the product name, country of origin, importer's details, usage instructions, storage conditions, and safety warnings.

Understanding the legal framework for purchase orders in Iran is vital to mitigate potential pitfalls. Iranian contract law is primarily based on the Civil Code, drawing from Islamic jurisprudence and civil law traditions. For a contract to be legally valid, it must demonstrate:

1. Intent and Consent: A genuine intention to create a legal obligation and free, voluntary agreement from both parties.
2. Legal Capacity: Parties must possess the legal ability to enter binding agreements, including reaching legal age, having a sound mind, and financial competence.
3. Definite Subject Matter: The goods or services must be clearly identifiable, have economic value, be lawfully transferable, and capable of delivery.
4. Lawful Purpose: The contract's objective must not be contrary to Iranian law.

Private contracts, including purchase orders, are generally binding if they do not explicitly contradict the law. However, international sanctions significantly impact trade with Iran, affecting payment mechanisms and the types of goods that can be exchanged. Due diligence is critical to ensure compliance with all applicable international and national sanctions, as certain goods, particularly dual-use technologies, are subject to strict export controls and prohibitions.