Challenges Relating to the Definitions of Capital, Investor, and Foreign Investment and the Typology of Investment Contracts in Iranian Law

Abstract

In the contemporary global economic environment, competitiveness has emerged as a decisive factor in the economic sustainability and political stability of states. Economic dynamism is not merely an economic necessity but constitutes a fundamental prerequisite for the preservation of national independence and security. Within this context, foreign investment, as one of the most effective instruments of economic growth and development, has acquired a prominent position in the legal and economic systems of countries. With the expansion of doctrines grounded in free trade and the globalization of markets, the significance of respecting the principle of freedom of contract and the autonomy of the will of the parties in shaping the rights and obligations arising from foreign investment has become increasingly evident. Nevertheless, the Iranian legal system faces substantial challenges in addressing the concepts of “capital,” “investor,” and “foreign investment.” Ambiguities in statutory definitions, regulatory fragmentation, and the incomplete alignment of domestic concepts with internationally recognized standards have generated divergent interpretations and inconsistencies in the execution of investment contracts. Furthermore, the emergence of novel forms of investment arrangements, including public–private partnerships, buy-back contracts, and indirect investments, necessitates a reconsideration of the traditional legal frameworks used to analyze such institutions. Adopting an analytical–critical approach, this article examines the conceptual and practical challenges associated with the definitions of capital, investor, and foreign investment in the Iranian legal system and, through a comparative assessment of international practices and instruments, seeks to identify the existing conceptual and structural deficiencies in the Law on the Promotion and Protection of Foreign Investment and to propose solutions for aligning it with the requirements of the contemporary economy and the imperatives of international economic relations.