Iranian and European business leaders gathered in Geneva Thursday to explore the massive opportunities expected to open up when years of biting sanctions against Tehran end, although experts warned huge challenges remained.

"We're seeing a lot of activities and a lot of interest from foreigners," enthused Ramin Rabii, the head of Turquoise Partners, Iran's largest managers of foreign portfolio investment on the Tehran stock market.

He told AFP he expected Iran's economy to grow at a rate of between six and eight percent for the next decade after the sanctions are fully lifted.

Rabii was representing one of nearly 600 companies and organisations taking part in the Europe-Iran Forum, among them French industrial giant Alstom, Germany's number two power supplier RWE, National Iranian Oil (NIOC), the Tehran Stock Exchange and Iran's central bank.

Held in a luxury hotel overlooking Lake Geneva, it was the first international business conference of its kind since Iran and world powers reached a historic nuclear deal in July.

The deal aims to curb Tehran's nuclear drive in exchange for a gradual lifting of the crippling sanctions imposed on Iran's economy since 2006.

The lifting of sanctions, set to start next year, is expected to return long-awaited foreign investment to Iran, which has a population of almost 80 million people and boasts the world's fourth largest oil reserve and its second largest gas reserve.

"Iran will be the biggest country to enter the (global) financial system since the break-up of the Soviet Union," said Amirali Handjani, vice chairman of PG International Commodities Trading Services, highlighting the opportunities available to European companies willing to invest.

"The EU was once Iran's largest trading partner a decade ago. Now Russia, China and India have taken over. I think they have a real appetite to get back in, and the Iranians are welcoming them back," he told AFP.

But while the interest is rife, most deals are still off limits since the most punishing sanctions on Iran's banking and oil sectors remain in effect.

- No El Dorado -

For major companies, one priority is getting Iran reconnected to the global network of SWIFT banking transactions to enable firms located there to transfer funds in and out of the country.

Once that happens, "business will be easier and it won't be as costly," Handjani said.

But even when the main sanctions are lifted, experts say Iran will not be an El Dorado, given the wealth of issues complicating the process of doing business: the political risks and regional instability; Tehran's outdated legal system; its restrictive labour laws and its lack of experience dealing with international investors.

Since a range of sanctions not linked to the nuclear issue will remain in place, companies will also need learn what is and is not permitted, and there is also the risk that sanctions could be re-imposed.

"Without an enhanced due diligence, you will have a tough time working in Iran," Swiss ambassador to Iran Guilio Haas told the conference.

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Alstom