In a recent speech in Qeshm Island, President Mohammad Khatami maintained that major objectives pursued by FTZs are the transfer of technology into the country, facilitating competition to bring about production of high quality goods, development of exports and creating job opportunities.
FTZs must pay special heed to import and export activities if they want to have a strong economic infrastructure. The trade activities must be in favor of exports instead of import. Iranian manufacturers must endeavor to develop products with a higher quality comparing to those of foreign rivals. Three typical features of FTZs are:
1. In FTZs business people can import raw materials, unfinished products, machinery and equipment without paying customs duties and taxes and can produce or assemble goods and export them with no limitations.
2. FTZs are industrial regions with standard installations for building factories, offering public services and industrial facilities and are located near airports or seaports.
3. Industries and enterprises located in FTZs enjoy special benefits and exemptions for investments and exports.

These provisions make the FTZs suitable for foreign investments and exports. Given the above-mentioned features, FTZs are considered as a bright prospect for the development of the national economy. Approving laws related to activity of banks with foreign capital and issuing guarantees for the investments in these zones, as decided by the highest-ranking authorities, shows there exits a consensus for promotion of FTZs in the country.
True, there are a host of benefits in FTZs, but the fact is that if the government fails to make use of the experiences belonging to other countries in this regard it would exert irreparable damage on the project. In Iran’s neighborhood, across the waters of the Persian Gulf, FTZs with successful experience are located and their experience can properly be exploited by the Islamic Republic. This would pave the way for cooperation between Iran and its Arab neighbors, which in turn fosters the security in the region. Today, the traditional definition for “security” has been challenged and the prevalent definition is that “no country can achieve security with financial support of other countries.” According to UNESCO, in the new era sustainable development is equivalent to peace.
The regulations related to human force in the FTZs are not complicated and do not include unnecessary rules; it is but flexible and simple. The focus of relevant organizations must now be on preparing the grounds for attraction of capitals. Main obstacles in the way of foreign investments are:
- Absence of clear procedures regarding the issuing investment guarantees and security for investors.
- Insufficient insurance coverage. This increases the risks of investments.
- Lack of support by the financial and monetary organizations.
- Refraining to issue permits for setting up foreign banks and credit institutes.

If the Expediency Council removes the above obstacles through a concrete decision, part of the legal grounds would be provided for investments in FTZs. Economic experts have offered the following suggestions for expansion of investments in the Free Zones:
­ Adopting appropriate policies for the development of exports and paying attention to those investments targeted at regional, extra-regional and global markets.
­ Conducting studies in order to clarify which products can be produced in the FTZs.
­ Establishment of processing and packaging industries for re-export of goods.
­ Transfer of know-how and technology through partnership of domestic and foreign manufacturers in the FTZs.
­ Offering services to foreign and domestic investors through setting up vocational centers and training skilled manpower for manufacturing units.
­ Organizing trade fairs, including temporary and permanent exhibitions.