Iran plans to set up a major free trade zone on its southwestern border areas, said a report.

The country is currently accelerating investment in the project – called Arvand FTZ – that spans over an area of 37,400 hectares, added the Press TV report.

It covers Abadan, Khorramshahr as well as Minoo Island and Shalamchech border point on the Iraqi border.
 
The work over the project began last year with the help of German advisors and Iran now hopes to complete it within two years, said the report, citing Financial Times.

Esmaeel Zamani, the managing director of the state-run Arvand Free Zone Organization, said that they are hopeful European companies will come and visit and see the vicinity to the Iraqi market.

He added that the insecurity [in Iraq] is not good for Iran but critical conditions there have prepared the southern Iraq market.

Akbar Torkan, a senior adviser to the Iranian president and head of Iran’s Free Trade Zones Organization, also told the Financial Times that the potential for the project goes even beyond Iraq.

Torkan noted that Iran no longer faces international sanctions, and are trying to build a bridge between Caspian Sea [in the north] and the Gulf via railway, which means Arvand can feed not only Iraq but also Russia.

Industrialists and traders in Arvand FTZ, when fully operational, will be exempt from tax, duties, banking regulations, the labor law and visa obligations. The government hopes to prioritize oil-related industries, steel factories, power plants and renewable energies, it said.

Already two big steel projects, including a $2 billion factory run by state-backed Jahanara in conjunction with Spain’s Sarralle Equipos Siderurgicos, have begun, added the report.