1. What is the current legal landscape for M&A in your jurisdiction?

Generally, the M&A landscape in Iran is shaped by a combination of general corporate and contract law, sector-specific regulation in certain areas and broader market dynamics depending on the prevailing circumstances. While there is no stand-alone M&A statute, mergers and acquisitions are legally recognised and commonly structured under the Commercial Code 1932, the Law Amending the Commercial Code 1969, the Civil Code 1935, as well as transactional structures largely governed by contractual arrangements. In addition to the said foundational legal framework, implementation of M&A schemes may also need to take into account certain mandatory steps required under social security, labour, and tax laws.

In practical terms, the M&A market in recent years has been shaped less by legal uncertainty alone and more by regulatory constraints as well as certain overriding considerations extrinsic to Iranian law. US sanctions have played a substantial role, particularly in relation to financing such transactions and participation of foreign investors in M&A deals in Iran. Most recently, the escalation of geopolitical tensions surrounding Iran and the outbreak of war, followed by a maritime blockade in the Strait of Hormuz, have further complicated business conditions, significantly affecting the M&A landscape in Iran. The resulting heightened uncertainty that undermines the prospects for a clear business environment has prompted market participants to defer strategic investment decisions, including M&A transactions, pending greater clarity regarding geopolitical developments.

The startup and technology ecosystem, where the majority of private-sector M&A deals involving mature startups in Iran have taken place so far, has also lost momentum recently, due to a decreased flow of capital into the ecosystem. Therefore, major M&A deals have not been occurring in this area recently either.

Consequently, although US sanctions had already significantly curtailed both foreign and domestic investment and acquisition activity in the private sector, the current geopolitical environment has been the defining characteristic of the M&A landscape in Iran. In the same vein, no recent major M&A transaction in the private sector has been publicly reported.

In light of the prevailing uncertainty, M&A transactional practices, which have developed primarily in the form of share purchase agreements, have not undergone significant changes.

2. What three essential pieces of advice would you give to clients involved in M&A matters?

Clients should prioritise early and comprehensive legal and regulatory due diligence, as key risks in Iran often stem from regulatory licences, mandatory legal matters (tax, social security insurance, etc.) and ongoing litigation, rather than from straightforward corporate matters.

Deal structures should also be tailored to local conditions, particularly enforceability considerations, rather than merely relying on standard international M&A templates.

Moreover, clear contractual risk allocation and realistic timelines are essential, with well-drafted representations, warranties, indemnities and conditions precedent playing a central role in managing execution risks.

3. What are the greatest threats and opportunities in M&A law in the next 12 months?

The primary threat to M&A activity in the coming 12 months is the ongoing conflict and heightened geopolitical tensions, which constrain commercial deals and foreign investment. Furthermore, the US sanctions will continue to pose an additional significant threat to the M&A market in the coming months. Consequently, the resulting uncertainty, at its highest degree in recent years, is likely to weigh on the M&A market.

Opportunities are expected to arise if current tensions and instability evolve toward a more moderate geopolitical environment through peace-deal negotiation, easing of sanctions, and détente policies that encourage foreign economic participation. Under such conditions, demand is likely to increase for creative and diverse deal structuring, comprehensive due diligence, and related advisory services.

4. How do you ensure high client satisfaction levels are maintained by your practice?

We ensure a high level of client satisfaction by combining deep legal expertise with a practical insight into the market and firsthand experience of prior M&A structuring and implementation. We listen carefully to client objectives, provide clear, actionable advice, and set realistic expectations.

Aside from structuring and drafting deals, our team has extensive experience in actively identifying M&A opportunities and participating in negotiations involving foreign investors. Accordingly, we focus on delivering responsive, reliable, and expert legal support throughout the whole process, anticipating issues and keeping clients fully informed, which builds trust and confidence in the outcomes. Our advice is customised to each client’s commercial priorities, ensuring solutions are practical, risk-aware, and aligned with their strategic goals.

Furthermore, to keep clients informed and engaged with the market, we provide regular updates on key sector developments through occasional alerts, updates, and quarterly newsletters. Our corporate and M&A team works closely with our litigation and IP departments to provide multidisciplinary guidance.

5. What technological advancements are reshaping your M&A and how can clients benefit from them?

The negotiation and execution of M&A transactions in Iran are still dominated by conventional mechanisms. Macro-economic factors have so far acted as barriers to the development of the M&A market in Iran, which has also affected the deployment of technological tools and advancements capable of reshaping M&A practice in the country.

However, it is foreseeable that tools developed to collect and analyse data, maintain contract documentation and corporate records, and operate crowdfunding platforms may, in the near future, contribute more actively to the development of M&A practice in Iran.

In addition, further development of Iran Farabourse’s (the second-largest stock exchange in Iran) platform for negotiating M&A deals, currently focused on state-owned company sales to enhance transparency and efficiency, could be extended to facilitate private company transactions in the future, further contributing to the growth of the M&A market.

6. Describe a particularly interesting or complex matter you have advised on recently, and explain the challenges involved, your approach, and the outcome achieved for the client?

In a relatively recent matter, a foreign company decided to sell its shares in an Iranian company controlled by it. The matter was particularly complex due to several interconnected challenges.

First, identifying suitable buyers who met our client’s strategic and financial requirements was difficult. Second, negotiating the terms required careful balancing of the parties’ expectations, particularly regarding payment structuring and exchange rate mechanisms, given the significant volatility of foreign currency during the negotiation period. Third, the transaction involved complex intellectual property licensing issues, as the target company held valuable IP rights that required careful arrangements.

We advised the client throughout the entire process, which involved complex structuring and multi-jurisdictional considerations. We conducted comprehensive legal and IP due diligence to identify and mitigate potential risks before they could affect the deal.

We led the drafting and negotiation of the share acquisition agreement and all accompanying agreements. Beyond designing the deal structure, we carefully monitored closing and post-closing matters, and we prepared and finalised all required corporate resolutions to complete the deal. Overall, we ensured a smooth and efficient process for all shareholders involved while taking into account all corporate, regulatory, and IP matters, successfully concluding the transaction to the client’s satisfaction.