Madrid -- Iranian Minister of Economic Affairs and Finance Tahmasb Mazaheri here Monday night conferred with his Spanish counterpart Rodrigo Figaredo Rato on possible avenues to expand economic ties, IRNA reported.

Mazaheri said the two sides had discussed conclusion of three agreements on investment and customs cooperation as well as tourism.

The agreements, to be signed on Tuesday, will serve as a base to bolster cooperation and investment of the two countries, he added.

A further agreement will be signed on avoiding double taxation, which is complementary to other agreements, Mazaheri said, adding investors of the two countries were not able to operate competitively by paying double taxes.

"The two sides have realized that avoiding double taxation is necessary to the cooperation of their entrepreneurs," the Iranian minister said.

The Spanish side had pointed to some of yet existing problems in the Iranian investment law, which have to be tackled in order to pave the way for Spain's investment in the Islamic Republic, he added.

"Iran and Spain will sign general agreements as well as another agreement on avoiding double taxation in order to prepare necessary ground for the operation of the private sector," Mazaheri said.

He cited the oil and gas sector as a key area for economic cooperation of the two countries.

President Mohammad Khatami arrived in Madrid on Monday on a three-day official visit at the head of a high-ranking politico-economic delegation to discuss bilateral ties as well as regional and international issues, including trade ties with the European Union.

Beside Mazaheri, Iran's Foreign Minister Kamal Kharrazi and several other officials are accompanying the Iranian President in the trip, which is taking place at the invitation of the Spanish King Juan Carlos.

The trip highlights growing ties between the Islamic Republic and the European Union which is determined to sign a trade accord with Iran.

Spanish press has said that a trade deal to a tune of three billion dollars, mainly between the Iranian oil, gas and petrochemicals sector and Spanish firms, could be in the pipeline.

Khatami on Monday expressed hope that his visit to Spain will effectively promote the common interests of both countries anchored on mutual respect.