As many as 4,000 Iranians have invested in Dubai, mostly in its booming real estate sector, according to a senior Iranian government official.
Iran's Deputy Commerce Minister Mojtaba Khosrowtaj, who also heads Iran's Trade Promotion Organisation, has been quoted in the Iranian media as saying about 4,000 Iranians have invested in Dubai, "due chiefly to poor facilities and restrictive investment rules at home.
"The UAE has provided foreign investors appropriate port services, banking and insurance facilities, low-cost labour, stable commercial laws and inexpensive transportation," he said.
Iran recently reformed its foreign investment law, which is aimed at attracting foreign investment to the country. He said there are plans to prevent foreign companies registered in neighbouring countries to operate in Iran as of March, to encourage them to invest in Iran directly.
He further noted that lack of competition in Iranian banking has largely benefited the emirate which re-exports several billion dollars worth of goods to Iran annually.
Trade between the two sides stood at Dh16.10 billion ($4.4 billion) which is 13.5 per cent of the total value of Dh118.95 billion ($32.5 billion) traded between Iran and other countries worldwide. Trade between Iran and the UAE grew 53.2 per cent in 2004 compared with a year before.
The UAE's re-exports to Iran grew from nearly Dh3.67 billion ($1 billion) in 1998 to Dh8.67 billion ($2.36 billion) in 2002 with Iran's share of UAE re-exports rising to 21.09 per cent.
He said the transit of goods from Iran to Dubai accounts for some 37 per cent of the total 9.5 million tonnes of goods moving between the two countries yearly.
"Re-exports from Dubai account for some $3.3 billion [Dh12.14 billion] out of the total $3.5 billion [Dh12.88 billion] worth of goods imported from UAE to Iran each year," he said.
Khosrowtaj said several major international conglomerates have established representative offices in the UAE and other Gulf Arab states, owing to foreign trade constraints within Iran.
"International trade requires that the foreign investor must be in close contact with local authorities, which is a difficult task in Iran today given the legal obstacles in the way of promoting foreign trade."
He said Iran did not face severe smuggling problems in its eastern and western borders when the Taliban and Saddam Hussain were in power in Afghanistan and Iraq.
He also blamed the improper pricing mechanisms for the increase in smuggling of goods from these areas.
He recently urged the UAE to undertake joint steps to curb smuggling between the two countries. "We have strong commercial relations with the Gulf countries, especially with the UAE. As our bilateral trade is showing strong growth year on year, so is the level of smuggling," he told Gulf News ahead of Iran's first trade exhibition in Sharjah in December.
