The Tehran stock exchange is the principal component of the Iran Financial Market and the biggest stock exchange in Iran. It was established in the year 1968. As per the April 2007 data as many as 324 companies are trading in the TSE or the Tehran Stock Exchange.
The Tehran stock exchange has been doing some excellent business over the years. The current market capitalization of the exchange is US$ 42 billion. The Securities and Exchange Council is the regulator of all the transactions that take place in the Iran financial market.
This body is in charge of formulating the policies and market plans as well as monitoring the market. The Securities and Exchange Organization or the SEO carry out the administrative and the supervisory functions.
The following are the major indices operating in the Iranian stock markets:
- TSE-50
- TSE All Share Price Index (TEPIX)
- TSE Dividend & Price Index (TEDPIX)
- Industrial Index
- TSE Dividend Index (TEDIX)
- Financial Index
Foreign Portfolio Investment Laws in Iran
The financial market in Iran has laws for regulating the portfolio investments made by offshore clients. These laws have been approved by the national government in the month of June 2005. These laws have opened up the investment options of the Tehran stock exchange to the offshore investors. The main laws are as follows:
- Foreign investors may not withdraw their main capital and capital gain for the first three years of their investment.
- Repatriation is possible once a year under current regulations.
- Foreign investors may own a maximum of 10 percent of each listed company.
Share Transfer Tax in Iran
The share transfer taxes operative in Iran have been altered with specific stress on the calculation of taxes that are to be paid when legal companies in Iran transfer shares. As per the new laws 0.5% could be charged on the sales of the transferred shares. The other taxes like capital gain tax become redundant.