The speculation is over. Iran and the world powers have reached a deal on Iran's nuclear program that could potentially remove the main sanctions against Iran by early 2016, allowing it to normalize trade, financial and investment relations with other countries. Although Iranian-US trade relations will not be sanctions-free in the foreseeable future, the situation could feasibly return to the one in the 1990s and the early 2000s with limitations on US companies doing business in Iran, but relatively open business relations with the rest of the world. As an integral part of the deal announced July 14 in Vienna, Washington will lift the secondary sanctions on companies in third countries doing business in Iran. The deal also addresses the situation of subsidiaries of US companies, paving the way for the engagement of subsidiaries with non-US-majority shareholding. 

There is no doubt that post-sanctions developments will lead to a positive economic outlook in Iran. Despite the positive developments, unemployment will remain a major challenge for the Iranian government, so dedicated efforts must be made to create jobs and generate economic momentum. Although a number of nuances and legal processes will shape the new relationship between international companies and Iran, the Iranian economy nonetheless faces a new, unprecedented situation: Iran has invested heavily in industrial capacity to compensate for the gaps created by the sanctions, but post sanctions, these industries will have to operate in a completely different environment. On the one hand, their interactions with international trading partners will be free of previous limitations, but on the other hand, they will face international competition in Iran. 

When trying to gauge the government's actions in the aftermath of the nuclear deal, it is important to understand that the top leadership remains committed to the “resistance economy.” This concept focuses on domestic capacity building and investment in the infrastructure needed to promote domestic industries, especially those with export potential. This means that investments in infrastructure as well as empowerment of domestic industry will likely be top government priorities. 

Some domestic players are concerned about the anticipated opening of the Iranian market. Yahya Ale-Eshagh, a powerful businessman and former head of the Tehran Chamber of Commerce, opined well prior to the nuclear deal, “Post sanctions, domestic production will have to be managed in a way that it remains competitive. It is clear that there will be a rush on the market due to the needs, pricing and competitive environment, and if that rush is not controlled, it will harm the domestic industry.”