Planning and Budgeting

Given the importance of foreign direct investment in Iran, especially in post-sanction situation, this study aims to analyze the relationship between variables such as initial capital, technology and industry type and entry modes. We have used the data available on foreign subsidiaries in Iran including 123 foreign affiliates registered in the country. Entry strategies based on ownership advantages have been categorized in terms of Majority owned, Minority owned and Co-owned. Our findings show that 59 percent of foreign subsidiaries are minority owned and in only 23 percent of foreign subsidiaries in Iran, parent company own maximum share of the capital. The results imply that the industry type and the country of origin have impact on capital. However, foreign investors from the Middle East had lower initial investment and capital. Our findings also indicate that Asian countries of origin investor prefer minority owned subsidiaries in Iran. Therefore, post-sanction government policies in order to facilitate foreign investment through liberalizing foreign ownership to the full ownership, considering the objectives and interests of foreign investors to enter the market, providing targeted investment incentives based on the capabilities and capacities of the country, as well as prioritizing the attractive industries, could increase the share of foreign investors in foreign subsidiaries in Iran.