Located at the limit of Eastern Europe and Western Asia, Azerbaijan is the most developed economy in its region which makes it very appealing when it comes to starting a company. Moreover, its geographical location makes it ideal for investors from both Europe and Asia to consider it for future business opportunities.
Those who are not acquainted with the business environment here and want to start small companies can use startups in order to ensure a slow and steady development of their operations.
Setting up a startup in Azerbaijan is not complicated, as most of the legal entities covered by the Company Law can be employed. Our company formation specialists in Azerbaijan can assist with the creation of a startup in this country.
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Key aspects to consider when opening a startup in Azerbaijan
As there are no differences between startup companies and other businesses operating at larger scales in Azerbaijan, the establishment of the former is not complicated from a legal point of view. However, there are other aspects that need to be considered which has to do with attracting capital from outside investors, others than the shareholders. This happens because in most cases, a startup in Azerbaijan is created by one or more young persons.
Here is what one should consider when deciding to create a startup in Azerbaijan:
- it will need a solid business plan in order to appeal to a large pool of investors,
- it will obtain most of the funds from various platforms, such as crowdfunding,
- being set up by young and inexperienced entrepreneurs, it will usually rely on the professionalism of experienced investors,
- it will have a low share capital at the beginning of the operations, therefore, the legal structure needs to be carefully chosen.
When it comes to its registration with the Azerbaijan Trade Register, it does not need to meet specific requirements.
Our company registration advisors in Azerbaijan can be by the side of foreign entrepreneurs during every stage of the creation of a startup.
Choosing a legal structure for a startup in Azerbaijan
The business forms that can be employed to open an Azeri startup company are the sole proprietorship, the partnership, and the limited liability company. Out of all of these, the private limited liability company ensures the highest degree of protection of the shareholders.
There are no share capital requirements imposed under the law, however, in certain sectors, the authorities issuing the operating licenses can require a minimum amount of money as share capital. However, when running as a startup, the settlers have the option of pitching their ideas to crowdfunding platforms they can gather the money from. This is why a solid business plan with projections on the company’s future profits. However, this business plan needs to rely on market research that endorses its projections.
Our local consultants can offer detailed information on how to gather funds for setting up a startup in Azerbaijan. We can also handle the registration procedure of the chosen business form for your future company.
What are the steps for opening a startup in Azerbaijan?
Startups can be created by local and foreign investors with no additional requirements for the latter. However, these can apply for residence permits for Azerbaijan if they plan to stay in the country in order to manage their companies.
Here are the steps to complete in order to open a startup in Azerbaijan:
- drafting a business plan and launch the proposal on various platforms in order to raise money,
- prepare the documents related to the incorporation of the company,
- file the documents with the Companies House and collect the Certificate of Registration,
- register the company with the tax authorities and obtain the relevant licenses for the activities.
Compared to other countries in Europe, for example, the registration of a company in Azerbaijan is completed much faster (approximately 4 days), which is one of the best reasons to choose this country for a startup.
If you are interested in knowing more about the local laws on foreign investments, you can reach out to our lawyers in Azerbaijan.
The startup ecosystem in Azerbaijan
It would suffice to stay that in 2019 Azerbaijan ranked 3rd among CIS (Commonwealth of Independent States) in terms of startups, however, there are also other reasons to choose it for the creation of such a business venture.
According to Investorperss.com:
- Azerbaijan ranked 47th in the world in terms of startups in 2019,
- the same year, the country was home to 200 startup companies,
- based on a decision issued in 2018, startups are exempt from the profit and income taxes for 3 years.
If you want to create a startup in Azerbaijan, do not hesitate to contact our specialists for support.