"Over the last five years, 41 foreign companies have helped Iran develop its oil and gas sector, which accounts for over half of the Iranian government’s revenues, congressional investigators reported on Thursday."

The latest Budget 2010 unveiled by the Ministry of Finance has introduced initiatives to support business restructuring to achieve higher productivity towards higher-value and more innovative players. The Government is encouraging continuous flow of start-ups and new entrants into the economy. The Government is facilitating mergers and acquisitions by introducing, for five years, a one-off tax allowance scheme to help defray a portion of acquisition costs.

The allowance will be equal to 5% of the value of the acquisition. The acquisition of a $50 million company, for example, will give the acquiring company a tax allowance of $2.5 million. The acquiring company will be able to deduct $2.5 million against its taxable income over 5 years, resulting in total tax savings of $425,000.  There will be a cap of $5 million in a single Year of Assessment.

The new allowance will help the acquiring company offset part of its costs, but without seeking to distinguish between interest costs and other costs. It is therefore neutral between debt and equity in financing transactions.

Stamp duty on the transfer of unlisted shares for M&A transactions valued up to $100 million in any year will be waived.  This one-off concession will also be available for five years.