According to historical data, the Iranian government turned to heavy borrowing from Western financial institutions. In most cases, these were utilized for lavish consumption purposes. Many of these carried clear monopoly rights which conferred a somewhat unpleasant connotation to the term "Concession" in the eyes of most Iranian saw this as mortgaging the country for a pittance. Disappointing though the fates of these venturers proved to be, they gave the country a pool of experience about positive and negative sides of foreign economic participation and the need to approach it in a systematic way. Consequently, enacting of the basic regulations as the foreign investment was made subject to a new set of requirements. In 1955, the first law was entitled "Law for the Attraction and Protection of Foreign Investment" (LAPFI). According to this law foreign direct investment in Iran is only allowed through participation in the equity capital of existing legal entities of newly created joint ventures. The legal facilitates, as it turned out, were contained through the subsequent regulations concerning foreign investment in Iran under the name of "Foreign Investment Promotion and Protection Act" (FIPPA) was ratified by the parliament in 2002. FIPPA's Replacement of LAPFI has further enhanced the legal framework and operational environment for foreign investors in Iran.
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