TEHRAN - Singapore has signed an investment treaty with Iran to support Singapore companies in investing in the newly re-opened market.
The treaty will also provide a legal framework to protect investors and promote investments between both countries.
Singapore's Minister for Trade and Industry (Industry) S Iswaran signed an Agreement on Reciprocal Promotion and Protection of Investments, also known as a bilateral investment treaty, with Iran's Minister of Finance and Economic Affairs Ali Tayyebnia on Monday (Feb 29) in Tehran.
Singapore is the second country, after Japan, to sign a bilateral investment treaty with the Islamic Republic following the lifting of United Nations sanctions in mid-January this year.
"We look forward to strengthening bilateral economic ties with our businesses collaborating on opportunities of mutual interest in Iran and other markets," said Mr Iswaran.
He is in Tehran for a three-day visit from Feb 28 to explore new business and investment opportunities. His trip coincides with Singapore Business Federation (SBF)'s one-week mission to the capital city of Iran.
Mr Iswaran has also met with Minister of Industries and Business Mohammad Reza Nematzadeh.
With this agreement, Singapore investments will be treated as favourably as any other investments - foreign or local. And businesses can transfer capital and returns between the two countries without obstacles.
The treaty also provides Singapore investors the option to resolve investment disputes through international arbitration.
According to the Ministry of Trade and Industry, Singapore's bilateral trade with Iran was S$6.6 billion in 2011, before the sanctions were imposed. They fell to S$2.6 billion in 2012 after the sanctions kicked in. By last year, bilateral trade had shrunk to S$171.4 million, with Singapore's exports to Iran at S$158 million while imports from Iran amounted to S$13.4 million.
Singapore companies have shown renewed interest in the oil-rich country, which is just re-opening its doors after a prolonged period of under-investment.
A total of 51 companies from various sectors such as oil and gas, petrochemicals, logistics and information communications technology have been in Tehran since last Friday, gaining first-hand knowledge about the business environment and investment opportunities here.
"Singapore companies are known for our quality, reliability and the service we deliver...but competition is greater than before and others are running very fast," said Mr Teo Siong Seng, SBF chairman and leader of the business mission.
"We could start in a smaller way, but we should start to see some activities going forward from here," he said.