Free trade zones (FTZs) is considered as a part of economic development in developing countries. Creating such zones play a significant role in attracting foreign direct investment (FDI), creating jobs, improving export and transferring technology. The existence of an integral and transparent legal framework with effective supporting and motivating packages to encourage investment, coherent structure, and an appropriate efficiency of human and financial resources in the light of specialized management can play a significant role in the success of free-trade zones. The general economy has been framed around FTZS in some countries like China. However, these zones failed to achieve the pre-determined objectives properly in Iran despite a long history in creating FTZS and Special Economic Zones (SEZs). The rules governing the foreign investor are one of the most important factors in attracting foreign direct investment, since these rules are the first things that a foreign investor encounter with them. According to this approach, the formalities, prohibitions, restrictions and requirements of such rules play a significant role in the motivation or lack of motivation in the foreign investor. According to the role of drafting regulations in attracting or disposing foreign investment, we have made legal analysis of investment regulations in Iran and China, and at the end of this study, we compare the laws between two countries.
