With the lifting of some layers of sanctions against Iran on 16 January 2016, investors all over the world are standing in line to profit from the opening of the biggest market since the fall of the USSR. But how does one get to the right contacts, information, and business opportunities?
“‘It is a riddle, wrapped in a mystery, inside an enigma’. What Winston Churchill said about Russia in 1939 might be true for Iran today,” Dr. Daniel Seelhofer, deputy dean of the ZHAW School of Management and Law (SML) said at the opening of the strategic seminar “Iran: Spotting & Vetting Opportunities”. The Department of International Business at the SML, Geopolitical Alphaand Brasidas Group jointly invited renowned experts in the fields of business intelligence, private equity, and capital markets to find solutions to the riddle at the event, which had some 40 participants.
According to Dr. Milo Jones, co-founder of the business intelligence network Geopolitical Alpha, «the lifting of the sanctions is not a magic gold rush moment; it’s just another step in a process. But with the right information and contacts, it got easier to do business in Iran.» In his presentation, Jones elaborated on how to gather valid information on a complex country such as Iran, how to ask the right questions, and to whom. His advice to potential investors in the Persian market is to first create options rather than just to dive in. «How well the opening of Iran will continue depends on the elections in both the U.S. and Iran, as well the political development in the region,» Jones said.
Having worked with Iranian clients since 2003, British investment banker Ali Akbar Ahsan has a profound knowledge of Iran’s banking system and capital markets. A partner at Magellan Capital, he gave the audience an outline of the regulatory environment and the challenges faced by foreign entrepreneurs looking to invest in Iran. «Iran was never shut down; business just paused,» Ahsan commented on the lifting of the sanctions. «Iranians are very creative when it comes to finding a workaround.» But even local bankers sometimes fail to see through the almost casino-like Tehran Stock Exchange. «Share price movements defy logic,» Ahsan explained. «Sometimes there are 500 percent increases in two weeks.»
«The sometimes unpredictable complexity of the Iranian economy is mainly caused by its multi-layered political machine that directly influences the commercial landscape,» Andrej Bastar, co-founder of the strategic intelligence and risk advisory corporation Group Brasidas, told the audience. «The Supreme Leader, Guardian Council, President, Majlis, the Iranian Revolutionary Guard Corp, and the Basij influence and dictate the direction industries take and ultimately decide policy.» Before engaging in business in Iran, investors have to understand each arm of the government as well as the grey eminences, Bastar advised.
In the panel discussion which followed, all three experts shared their experiences with the audience. Although the riddle of Iran cannot be solved by a single event, participants gained useful insights into an opening market. Geopolitical Alpha and Brasidas Group will continue their strategic seminar series at the ZHAW School of Management and Law, which will focus on different markets and topics. For further details, please contact Maya Gadgil, Senior Project Manager at the Department of International Business, Center for Middle East and Africa Business.