Post-sanction Iran a much more interesting market for Danish companies: minister
TEHRAN – Karsten Lauritzen, a member of the Danish Parliament for the Venstre and Tax Minister of Denmark, sat with the Tehran Times last week for an exclusive interview in which he expressed his country’s wish to invest more in Iran. “After easing of sanctions, Iran has become a much more interesting market for Danish companies.”
In his very first two-day visit to Iran, Lauritzen visited Danish companies investing in Iran like Novo Nordisk and discussed double taxation avoidance agreement with the Iranian side.
Ambassador Danny Annan was also present in the meeting. He commented on some of the issues.
Below is the full text of the interview.
Q. What is the purpose of your travel to Iran?
There are a number of countries which Denmark doesn’t have a double taxation avoidance agreement and Iran is one of the countries.
We asked Danish companies which countries are important to them to sign new double taxation avoidance agreement with and one of the countries they pointed was Iran.
So, there is huge potential on both Iranian and Danish sides for mutual benefits when it comes to trade and attracting investment from Denmark to Iran.
There have been technical discussions from Danish side and Iranian side expressing wishes to make a double taxation avoidance agreement but the question has not been moving that much. So I am here to send a signal to the Iranian government and minister of finance that it is important for us and we hope that we get the discussions started in 2017.
There is interest for both countries to move forward and negotiate and agree on something. And that is the main purpose of my visit to start that process.
Q. Why the discussion has not been moving forward so far?
From technical side the topic has not been moving much. There is interest from both countries to move closer and negotiate and agree on something and that is the main purpose of my trip to Iran to start that process. I haven’t met with the minister of finance yet, but I am optimistic.
Q. Has there been talks on double taxation avoidance agreement between the two states?
My next meeting is with Iran’s minister of finance. My political mission here as minister of taxation is to make a double taxation avoidance agreement which makes certainty when it comes to what you should pay for tax and you are not being double taxed and that is of course one obstacle for investment from Danish side to Iran and trade and investment from Iran to Denmark.
Q. Has there been any agreements on renewable energy with Iran?
There are a number of Danish companies interested in investing in Iran not only implementing projects but also investing in sustainable energy. We consider ourselves on the forefront of the wind energy business and we are interested in partnership with companies in Iran on that.
Ambassador Danny Annan: “There are several Danish companies active in the Iranian market within energy efficiency saving solutions and they are doing quite well. So it is not just about renewable energy but also about how to save energy and that is the Iranian government’s priority and we have of course very interested in working with Iran on these issues.
For example, the Iranian energy minister was in Denmark in September and the main purpose of his visit was renewable energy and water issues. And we’re expecting a new Iranian delegation coming to Denmark next month. So there is good cooperation between the two countries.”
Q. Iran insists on technology-based cooperation with countries interested in signing deals. Has Denmark been able to meet that demand?
Nov Nordisk is one of the companies actually brining in a lot of technology and actively deciding to do that and one of the discussions I have had in my meeting with Nov Nordisk here was that there is huge investment in the new factory and of course in the technology that comes with that factory.
From Danish side there could be a concern about patents and investment property rights, making sure if you bring in and share technology, it is not being copied in an unlawful way and that is of course always a challenge and concern. I know that the Iranian government is working on it and has recognized it and it is moving in the right direction.
Ambassador: We signed a government to government agreement on closer cooperation.
Q. Iran-Denmark trade has increased by 60 percent since March 20, 2016. What are the major exporting products from Denmark to Iran?
One of the things increasing from Denmark to Iran is Novo Nordisk products.
Ambassador: Novo pharmaceutical products and medical devices is 50 percent of Danish exports to Iran. So, it is a big bulk of our export.
Q. Are your banks still facing difficulties in terms of exchanging finances with Iranian banks after the JCPOA? Do have Danish banks any plan opening branches in Iran as other countries have done after implementation of JCPOA?
What I hear from Danish companies and Danish-owned companies in Iran is that it is a problem and there is mutual interest in solving it and I know at least one big Danish bank, Danske Bank, interested in working with Iran but it is a private enterprise so from Danish government point of view I can only encourage them to work with Iranian banks and find solution on it but from political government level I cannot do that much. But I recognize it as a problem we need to find solution to that.
Of course, to do business you have to have well-functioning banks and that is my key issue here that there is mutual investment here from Iranian and Danish sides. There are rocks on the road to that, but I think it is possible to move them.
Ambassador: Danish banks will not open an office in Iran but they are closely working with several Iranian banks so letter of credits are possible today and hopefully also in the future it would be possible with concrete project financing.
Novo Nordisk is a Danish multinational pharmaceutical company headquartered in Bagsværd, Denmark, with production facilities in eight countries and affiliates or offices in 75 countries.
The Danish drugmaker signed an agreement with Iran about three months before the JCPOA - the Joint Comprehensive of Action - to invest €70m in a facility that makes insulin pens for local use. The opportunity is creating 160 jobs and increasing the company’s access to the about 5m Iranians with diabetes.
The company aims at improving the quality of life for patients with diabetes.