Family-run businesses account for the largest part of Iran’s private sector, ranging from small entities to larger conglomerates. Several important or ‘strategic’ sectors of the nation’s domestic economy are in the hands of such family businesses that now extend beyond the founding members’ generation and into the hands of the second and third generations. Many of these entities are business conglomerates that include a number of subsidiary companies that span from sourcing activities, such as the procurement of raw materials, to distribution packaging and selling of goods.

However, information about family businesses is usually scarce, and they are generally not spoken of in the media, until a particular event turns the media spotlight on them. This gives research into these corporations a heightened level of opacity, much more so than the generally accepted levels that foreign investors already face when dealing with the Iranian market.

Impact

  • Family businesses operate in relatively clandestine fashion in Iran, removed from media and public scrutiny.
  • Some of these businesses are large conglomerates with near monopolies in certain sectors, such as the Modalal family in the feed import sector.
  • While these monopolies are strong, President Rouhani has displayed a willingness to break up sector strangleholds in the economy, creating space for opportunities.