As sanctions are lifted, can a burst of entrepreneurship succeed—and even transform the nation?

By Vivienne Walt ~ TEHRAN 

The sun is streaming through the windows of a loft-like office where a half-dozen young tech entrepreneurs huddle over their MacBooks in sweatshirts and sneakers. They’re putting the finishing touches to PowerPoint presentations in preparation for a pitch meeting with potential funders, who are visiting from Germany and Austria. When the investors arrive, the entrepreneurs, most in their twenties, nervously take turns displaying graphs and figures that promise sharp growth for their new ventures. “Trello meets Slack on steroids,” notes one slide, describing a project-management platform that launched a year ago. Another predicts rapidly rising subscriptions for a remote-learning site.

With bean bag chairs scattered on the floor and a ping pong table next to the coffee machine, you could easily imagine this scene in Silicon Valley. But these startups are launching thousands of miles away. This is Tehran, a city that since the Islamic Revolution in 1979 has been associated in the minds of many Americans with stern-faced mullahs, women in black chador, and angry demonstrators railing against “the Great Satan.”

Yet the business equation suddenly changed last year as the result of Iran’s nuclear deal with the U.S., Europe, and the United Nations. Iran agreed to rid itself of enriched-uranium stockpiles and, in exchange, Western countries lifted many of the sanctions that froze Iran out of much of the world economy for years. No longer is the country’s plentiful oil banned from world trade; many of its financial transactions aren’t blocked any more. For the first time in years, American companies can do business in Iran through foreign subsidiaries (though many require Treasury Dept. licenses), opening the door to U.S. investment in a $400-billion economy. (For now, Congress has kept other U.S. sanctions in place, on the grounds that Iran violates human rights and supports terrorism.)

The result of these changes has been a wave of business activity and optimism. Only days after sanctions ended in January, Iran’s President Hassan Rouhani raced to Rome and Paris to hash out multibillion-dollar deals for auto and ship manufacturing, new airplanes, modern railways, upgraded oil facilities, and much else. Since then, executives from Germany, France, Italy, Japan, Korea, and elsewhere have jammed Tehran’s hotels, which report being booked solid for weeks.

There are plenty of obstacles to new foreign business in Iran, as we’ll see. But for now, you could call this moment Iran’s Startup Spring. “We see a substantial inflow of foreign investors wanting to find opportunities,” says Saïd Rahmani, CEO of Sarava, Iran’s first technology investment company, who once worked for IBM in the U.S. “If someone wants to invest in Iran, this is the right time to do it.”

Read this story on FORTUNE Magazine.