This article applies only to Iran.
According to article 1 of the corporate law for the protection of knowledge and commercialization of inventions, a knowledge enterprise is defined as a “private or corporate company or institution established for the collaboration of science and wealth, development of knowledge-based economy, realization of economic and scientific goals (including expansion and application of invention and innovation) and commercialization of research and development results (including design, production and services) in the field of high technology and high added value, especially in the production of related software.”
In a simpler and clearer language, having ideas and technical knowledge which would lead to the production of a specific product or distinguished and new services and includes innovation and research thoughts.
According to article 2 of the corporate law for the protection of knowledge and commercialization of inventions approved in 2011, companies working towards the expansion and application of invention and innovation and “commercialization of research and development results in the field of high technology and high added value” are considered knowledge enterprises.
Types of enterprises are:
- Recently established companies
- Products and services companies
- Industrial companies
Established companies which are not older than 3 years are considered ‘recently established’. In order for these companies to benefit from governmental facilities, they must meet the following conditions:
- Having at least two part-time employees, one of whom is expert in the field of products and knowledge-based services.
- Must produce and present their products in laboratory scale
Production and industrial knowledge enterprises in the form of large companies and industries operate as technical companies and must meet the following conditions:
- All the company’s income from the previous fiscal year (with the condition of being mentioned in the tax declaration) resulting from knowledge-based products and services’ sales be at least 3 million Rials, or be simultaneously 10% of the company’s previous fiscal year’s income.
- Production of knowledge-based facilities which the company wishes to use to produce products and services be simultaneously at least 50% of the previous fiscal year’s income mentioned in the company’s tax declaration.
- The company must be simultaneously 3 years old and have at least 2 part-time employees.
Knowledge enterprise’s features
Knowledge enterprises usually do not have specific location, facilities, o machinery and do not usually produce materials, rather there are always educated people performing tasks in these companies. In fact, these information and data are considered as the products of these companies and business is made in this way. Industrial designs and moral ownership of products is always considered a concern for companies. Protecting moral rights of these information is one of the most important legal matters of knowledge enterprises since usually their properties are not physical, touchable and observable.
Knowledge enterprises’ goals
Knowledge enterprises are created with the goal of increasing and developing science, wealth, knowledge-based economy, and using students and university professor’s potential in universities and research institutions approved by the ministry of science and research. Other goals of these companies include achieving scientific goals of the country. For instance, promoting and application of invention and innovation, commercializing research results and development including design, and production of knowledge-based products and services.
Knowledge enterprises have benefits including:
Exemption from paying taxes, customs’ rights, maximum commercial profits, low-interest loans, export duties for up to 15 years, low-rate banking facilities, transfer of lands of industrial towns, Tehran-based, special discounts for educational courses, government support for products made in Iran, and military services facilities for knowledge enterprises’ members (those who qualify do not need to stay at the garrisons full-time after they spend their educational period, they will receive their end-of-military service card after successfully finishing a project for the military and government authorities and working in knowledge enterprises.)
Registration manner for knowledge enterprises
Registration of these companies is similar to registration of other types of companies. The difference is that after requesting registration, an appeal must be sent to the president’s deputy of science and technology, requesting registration as a knowledge enterprise. After survey by respective inspectors, and meeting necessary requirements, they will be supported as a knowledge enterprise.
Government companies, public non-government institutions, and companies with 50% of their ownership belonging to government companies and public non-government institutions are not included in the support approved by this law.
In order to register a knowledge enterprise, you must go to the www.daneshbonyan.ir website and enter the evaluation system for knowledge-based companies and enterprises after meeting the requirements mentioned in the “approvals of the evaluation and qualification team of knowledge-based companies and institutions and execution monitoring” section.
The important note for being considered a knowledge enterprise is that the presented patent be applicable or able to be produced and commercialized.
If you have any questions or need consultation on knowledge enterprises, please contact our experts at Sarasa Law Office.