Registering a construction company in Iran is a multi-step legal and administrative process that begins with choosing the company type (usually a Private Joint Stock Company or Limited Liability Company). Next, a unique and appropriate name related to the construction field must be chosen, and the founders’ identity and legal documents must be prepared. Through the Company Registration Portal, information about members, capital, business activity, and more will be submitted; after approval, the company's establishment is announced in the Official Gazette. Next, the company must file for tax registration, obtain an economic code, and seal its legal accounting books. Finally, to officially conduct governmental projects or participate in tenders, registration on platforms such as Sajat and Setad Iran is mandatory. These organized steps prepare a company to legally and officially participate in the construction sector.
Choosing the Company Type
- Limited Liability Company: Suitable for family-run companies or those with small capital.
- Private Joint Stock Company: Better for larger, more professionally structured companies needing classification.
Selecting the Company Name
The company name must:
- Be in Persian
- Not be duplicated
- Be related to construction activities
Preparing the Necessary Documents
- Copy of the national ID card and birth certificate of the board members
- Certificate of good conduct
- Company articles of association
- Company registration declaration
Classification of Construction Companies
Also known as contractor grading, this is an official and legal system developed by the Planning and Budget Organization of the country (Center for Technical and Infrastructure Affairs) to assess and classify the competence and capability of companies working in the field of civil, construction, and installation projects.
This classification is given to companies based on criteria such as experience and work history, financial capability, the number of specialized and educated personnel, insurance records of technical staff, completed projects, and management structure.
The classifications usually start from Grade 5 (lowest) up to Grade 1 (highest). Newly established companies, or those with little experience, generally apply first for Grade 5 and, over time, as their technical and operational capabilities improve, become eligible for higher grades.
Having a contractor grade is crucial for companies, as without it, they cannot participate in government tenders, national civil projects, or contracts with government organizations.
Classification essentially serves as a license for entering the professional realm of construction, and companies with higher grades are considered more reliable and reputable by both public and private sector clients.
What is Construction Company Classification?
Construction company classification is a system defined by the Planning and Budget Organization (Center for Technical and Infrastructure Affairs) to evaluate the technical, financial, and operational ability of companies for government infrastructure and construction projects. These grades are divided from Grade 5 (lowest) to Grade 1 (highest).
Benefits of Construction Company Classification
- Eligible to participate in government and public tenders
- Gain greater trust from clients and banks
- Increase the company’s credibility in the market
- Prerequisite for signing contracts with government agencies and municipalities
- Mandatory for securing large projects
Main Fields for Company Classification
- Building and structures
- Roads and Transportation
- Installations and equipment
- Water
- Oil and gas
- Power
- Geotechnical exploration
- Restoration of historical monuments
- Communications
- Industry and mining
- Agriculture
- Landscaping and site preparation
- Transmission lines and telecommunication
Construction companies typically apply for grades primarily in the building and structures category.
Required Documents for Obtaining a Contractor Grade
To obtain a contractor grade, the first set of documents to prepare and submit are the company’s registration documents, which prove the company’s legal status. This includes the official gazette of the company's establishment, demonstrating that the company has been legally registered and commenced operations.
Also required is the Company’s Articles of Association, containing detailed information on objectives, type of activity, initial capital, the limits of director’s authority, how profits and losses are distributed, and other internal regulations. For Limited Liability Companies, the company charter is also mandatory, outlining the agreements between partners and the company’s formation structure.
In addition, if there have been any changes to the company after registration such as a change of name, change of board members, capital increases, or address changes, the official gazette for the most recent changes must also be included in the documentation. These documents reflect the company’s current status and credibility in the eyes of government organizations and evaluators—and without them, the ranking process cannot proceed or a grade cannot be issued.
Conclusion
In conclusion, registering and classifying a construction company in Iran is not only a legal requirement for professional operation in infrastructure projects, but also a way to enhance credibility, gain client trust, and access government and private tenders. With proper company registration, selecting qualified technical members, and preparing financial and operational documents, a company can start at Grade 5 and, over time, by improving technical and operational capabilities, apply for higher grades. This process helps companies strengthen their position in the competitive construction market and secure more opportunities for growth and development.