A purchase of more than 100 aircraft from Europe's Airbus may be one of Iran's first big deals in a trade and investment boom that could reshape the economy of the Middle East.

"The legs of Iran's economy are now free of the chains of sanctions, and it's time to build and grow," President Hassan Rouhani tweeted on Sunday, a day after world powers lifted sanctions on Tehran in exchange for curbs on its nuclear programme.

Hours earlier, his transport minister Abbas Akhoondi told the Tasnim news agency that Iran intended to buy 114 civil aircraft from Airbus – a deal that could be worth more than $10 billion.

Obstacles

Airbus said on Saturday it had not yet held commercial talks with Iran, and businesses operating in the Islamic republic will continue to face big obstacles for the foreseeable future.

Risks include indebted Iranian banks, a primitive legal system, corruption and an inflexible labour market. Many foreign companies will remain wary of investing in Iran because of concern that the sanctions could “snap back” if Tehran is later found not to be complying with the nuclear agreement.

On Sunday the United States imposed sanctions on a further 11 companies and individuals connected to Iran’s ballistic missile programme just a day after it lifted nuclear sanctions that have hampered the Iranian economy.

But the Airbus plan underlined Iran’s potential: with about 80 million people, it is the biggest economy to rejoin the global trading system since the Soviet Union broke up over two decades ago. – Reuters/The Financial Times Limited 2016