Negotiating with Iranian business partners

Doing business and negotiating with Iranians is much like elsewhere in the world — it’s a tough sell. Everybody has a bottom line to contend with, but also cultural and religious issues play a significant role in broader business negotiations. Our business and human resources expert, Reyhaneh Khalilpour explains more.

How to negotiate with Iranians? I explain some of the points to keep in mind if you are attempting to sign a joint venture contract or sell your products to the local Iranian consumer.

Religious fundamentals must be taken into consideration when conducting business in Iran. For example in most cases, if a foreign woman is looking to sign a contract with an Iranian counterpart shaking hands with a man is at best frowned upon. Moreover, if you are a man meeting a potential Iranian female business partner, again the rule is not to make physical contact. Also, Iranians are very respecting about their religious and cultural practices, so do remember these points when negotiating.

Know Taarof before walking into a boardroom

Another point to bear in mind is the Iranian culture of “Taarof” which can be best explained as cultural posturing. If someone offers you something, for example, a cup of tea, the first response should be to turn it down, and then when prompted again agree. The more you know!

Negotiating in Iran can be a very long affair. Iranian businesspeople are experts at negotiating and getting to know the other potential partner familiarly always help smooth the cogs. Remember friendship and clarity counts as much in Iran as elsewhere and above all trust among all parties is a core asset of a successful business relationship.

The essential part of any business deal is the price — of course. Bargaining and dealing are intensive in the Iranian business environment, and one must always be prepared for lengthy negotiations with possible business partners.

It is common that Iranians change their minds halfway through negotiating a contract — sometimes in the eleventh hour. One must always be prepared to work on Tehran-time and not the usual business conducted in China or the West. Please do note, time in the general sense is not a vital part of the negotiation tactic in Iran.

It’s Persian, never Arabian

Iranians are not Arabs (in the main), and previous experience in Persian Gulf countries, will not mean you have a good understanding of the cultural sensitivities of Iranians. Iranians take great care in their Persian identity. Another important point to remember is that it is the “Persian Gulf” not “Gulf” and never, ever “Arabian Gulf.” If you say the latter, you can book your ticket home immediately as you probably just insulted your potential business partner.

Do keep in contact with your Iranian business partners when you’ve had your initial meeting in Tehran or other cities. Iranian business partners are very gregarious and love to know how you, your family and your company are doing during the process of negotiation.

Tehran is not Beijing or Paris

Iranians are probably the best negotiators in the world! Their negotiation styles are abstractly different to Western and Chinese styles, thus understanding the “Bazaari” mentality is a crucial factor for successful deals in the long run. Westerners negotiation process is not seen as a game nor fun – therefore, time is money for them, and they try to reach an agreement as quickly as possible. Iranians, on the other hand, find negotiating business deals as a test of mental agility.

If one does not hear from their negotiating partner for an extended period, this in part could be that the local party is not happy with the current negotiating terms of the agreement. Remember, it is quite common in Iran to not hear back from the other partner, this is sometimes confused by the foreigner as saving for time, but in the long run, they may not like the deal on offer.

Reyhaneh Khalilpour is the CEO of TalentTeem.com a website that helps companies maximise their productivity in the local environment. You can find more out at her site, which is available in both English and Persian at the link provided.