For Immediate Release
A 19-member delegation from the Hong Kong General Chamber of Commerce (HKGCC) returned to Hong Kong yesterday after a nine-day business mission to Iran. The delegation visited the major cities of Tehran, Mashhad and Isfahan to explore opportunities for business cooperation and meet potential partners in line with the Mainland’s Belt & Road initiative, and following the lifting of sanctions on Iran as a result of the successful outcome of the “five plus one” negotiations.
Delegates met with top representatives of the Iranian public and private sectors, banks, chambers of commerce, and local businesses, as well as visiting commercial and tourism developments. Commenting on the trip upon returning to Hong Kong, Chairman of HKGCC’s Asia & Africa Committee and mission leader Andrew Wells, said that delegates were surprised by the level of sophisticated development that the country had achieved, despite years of sanctions, largely on its own initiative.
"People were very welcoming and open, well-educated, proud of their heritage and eager to engage with international businesses," he said. "Delegates agreed that Iran today is completely different from the way it is often portrayed in the international media. We have no doubt that there are highly profitable opportunities in a wide range of sectors for Hong Kong companies entering the world’s largest remaining untapped market in the year ahead."
Mainland Chinese and Taiwanese businesses have been active in Iran for many years, and Hong Kong’s other competitors, such as Singapore, are also actively exploring opportunities. The delegation called on China’s Ambassador to Iran Pang Sen, who encouraged HKGCC to play an active role in promoting economic cooperation between Hong Kong and Iran, whilst Dr. Mojtaba Mousavian, Director General of Foreign Trade, Ministry of Industry, Mine and Trade Promotion, explained to delegates the tax breaks available to Hong Kong investors in Iran, as well as the legal safeguards on investment provided by Iran’s Foreign Investment Promotion and Protection Act.
Isfahan, home to developed heavy and service industries contributing nearly 10% of the country’s GDP, is also a key tourism destination. It is also home to many UNESCO sites, and is actively seeking investment in hotel and supporting infrastructure to accommodate the rising inflow of tourists.
"Companies that we met with in Isfahan were eager to work with Hong Kong companies for both import and export of raw materials, finished products, and also tourism services, including hotel investment," said deputy mission leader Neville Shroff. He added that Mashhad, as a religious centre for the country, offers great potential as a tourism destination. The city attracted around 27 million religious tourists alone last year, and is actively promoting health and medical tourism.
For trade and investment to take off fully, however, financial services offered by Hong Kong to investors in and from Iran need to be normalized as soon as possible. Dr Abdolnaser Hemmati, Chairman of Iran’s oldest and largest private bank, Bank Melli Iran, explained that the lifting of sanctions means that overseas banks are, in practice, already free to provide banking services for business transactions in Iran. Some European banks, notably in Switzerland and Austria, were already offering such services to their customers and others are expected to follow. Those taking a more cautious approach, perhaps waiting for the U.S. to resume normal financial relations with Iran, risk losing a major competitive advantage.
"Difficulties still exist in opening letters of credit and payments, but these will ease once financial services are fully normalized," said mission advisor and deputy leader Behzad Mirzaei. "Hong Kong and Iranian businesses, particularly those in Isfahan, which are similar to Hong Kong SMEs, have great potential for cooperation in everything from general trading and manufacturing to services and tourism."
Summing up the trip, Wells said: “Hong Kong businesses need to get ready to play an important role in restoring Iran’s international trade potential and its role as a key junction in China’s Belt & Road initiative. Chamber members now have a first-mover advantage: we know both the opportunities Iran can offer, as well as the challenges. I advise other Hong Kong businesses to see for themselves and talk to Iranian companies as soon as possible, or risk being left behind by our competitors in the region."
Captions:
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The Chamber delegates told Dr Abdolnaser Hemmati, Chairman, Bank Melli Iran, that they hoped banks around the world would restart business services with Iran as quickly as possible.
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Members met China’s Ambassador to Iran, Pang Sen, who encouraged HKGCC to play an active role in promoting economic cooperation between Hong Kong and Iran.
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Mojtaba Mousavian (left), Director General of Foreign Trade, Ministry of Industry, Mine and Trade Promotion, encouraged Hong Kong companies to take advantage of Iran’s vast natural resources, and skilled, yet low-cost manufacturing sector.
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Mission leader Andrew Wells, Deputy Leader Behzad Mirzaei (left), and members (2nd from right) discussed with Isfahan Government officials opportunities for developing environmental protection and tourism industries in Isfahan.
Photos can be downloaded from www.chamber.org.hk/en/media/pressphotos/
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Media inquiries: Please contact Ms Milly Lo at 2823 1248 / [email protected]