Azerbaijan has been constantly improving its economic conditions and it is now one of the best business destinations in its region. Although the local economy is traditionally based on the production of oil and gas and the processing of these raw materials, in the last years, the local authorities have created the necessary framework for the development of economic sectors such as: tourism, agriculture, transportation, the ICT sector or e-commerce.
Thus, those who want to open a company in Azerbaijan can take into consideration these economic sectors, which benefit from strong reforms. Investors should also know that the country has one of the highest reform rates with regards to the improvement of the business environment in the world, as presented by the Doing Business Guide, coordinated by the World Bank.
What are the main assets of the Azerbaijani economy?
Our team of consultants in company formation in Azerbaijan can present an extensive list regarding the advantages of the local economy. Our specialists can also offer advice on the procedures for starting a local company and the documents one should prepare when investing in this country. Below, investors can discover some of the main benefits of the local economy:
- it provides competitive production costs and low labor costs;
- it offers a developed connectivity with China and Europe;
- it has a stable and favorable business climate, which has been maintained over the years;
- the country’s authorities have signed numerous treaties that encourage foreign direct investments;
- the commercial legislation was modified several times to accommodate the needs of foreign enterprises.
Those who want to open a company in Azerbaijan have to know that the country benefits from a very stable political and economic system, it provides an attractive investment climate and foreign investors can enjoy from the benefits of the reformist business environment that has had as a result the development of the business sector in this country.
From a strategic point of view, the country can be seen as hub connecting not only Europe and Asia, but also as a location from where investors can easily reach the Caspian region. Abundant in natural resources and with investment projects carried out in the infrastructure sector, Azerbaijan offers all the necessary prerequisites for opening a business; our team of consultants in company formation in Azerbaijan can offer more details.
What is the level of foreign investments in Azerbaijan?
Considering that in the last decade numerous legislations were passed with the purpose of developing the business environment, the country became more and more appealing to foreign businesses and foreign businessmen. Those who want to invest in Azerbaijan should know that, currently, foreign investors are not restricted from investing here and that they can benefit from the tax advantages of the tax treaties signed here. Our lawyers can give you complete details on the relevant investment laws. Besides these, the following are available:
- the FDI stock in 2016 was of $26,683 million, in 2017, it increased at $29,551 million and in 2018, it reached 31,060 million;
- foreign investors have also invested in greenfield investments and in 2016, there were 25 such projects;
- the country’s representatives signed 47 bilateral investment treaties;
- Azerbaijan has also signed 51 treaties for the avoidance of double taxation;
- in the Doing Business Report 2020, Azerbaijan stands out as the 34th economy, in a study that comprises 190 jurisdictions.
What is the law on foreign investments in Azerbaijan?
Foreign businessmen who want to invest in Azerbaijan are protected under the rules of Law on the Protection of Foreign Investments. Those who want to open a company in Azerbaijan should know that the local authorities allow the following types of foreign investors: foreign natural persons, foreign legal entities, international organization and foreign states, as per the provisions of Article 2.
Foreign investments in Azerbaijan can take the form of participation in companies that have already been incorporated in this country, the purchase of companies or the acquisition of the right to use land and natural resources. Foreign investments can also be concluded through company formation in Azerbaijan, by setting up companies which belong 100% to foreign investors.
It must be noted that those who want to invest in Azerbaijan are free to participate in all the economic sectors available here, with the mention that specific economic sectors will require a prior approval from the local institutions. Our team of specialists in company registration in Azerbaijan can offer in-depth advice on the business activities that require special approval.