Iranian authorities have closed the Tehran operations of Oriflame Cosmetics and detained five workers, the Swedish firm has said.
The reasons for the move were disputed, with Tehran alleging fraud and Oriflame saying the authorities disliked it employing women in certain roles.
Last week, Iran's commerce and culture ministries called the company illegal and blocked its local internet site.
Oriflame said the move could be because it employs women as sales consultants.
According to a statement on the company's website on Monday, "business conditions in Iran have deteriorated in recent months".
The statement continued: "The authorities have now closed operations in Tehran. The authorities have also detained three members of staff and two sales consultants without disclosed reasons.
"Oriflame has not at present access to detailed information relating to the background to, or effects of, the current situation."
In Tehran, state radio reported that the company had violated tax regulations and custom law, and operated an illegal marketing scheme.
An an Iranian newspaper, Kayhan, accused the company of supporting opposition members in Iran.
In an interview with the Associated Press news agency, Oriflame's chief financial officer, Gabriel Bennet, rejected the allegations.
"Of course this is not true. We are running a business in Iran like anywhere else in the world, according to good international code of conduct," he said.