Doing Business in Azerbaijan 2016

 

Embed or link this publication

Description

Doing Business in Azerbaijan 2016

Popular Pages


p. 1

1 COUNTRY INFORMATION

[close]

p. 2

Important notice: This information is provided for general guidance only. Specific legal advice should be sought prior to taking any action in respect of the matters discussed herein. Every possible effort has been made to ensure that the information contained in this book is accurate at the time going to press. Statistical data by: The State Statistical Committee of the Republic of Azerbaijan

[close]

p. 3



[close]

p. 4

CONTENTS COUNTRY INFORMATION 9 Azerbaijan: state, geography and history in brief................................... 10 Economic snapshot....................................................................................... 14 WHY AZERBAIJAN 23 Political and economic stability.................................................................. 24 Reformist business environment............................................................... 24 Attractive investment climate.................................................................... 24 Skilled labour force....................................................................................... 24 A perfect hub................................................................................................. 25 Fast developing infrastructure................................................................... 25 Abundant resources..................................................................................... 25 BUSINESS CLIMATE 27 Establishing a legal presence..................................................................... 28 Land and property........................................................................................ 30 Licensing........................................................................................................ 32 Employment................................................................................................... 33 Foreign trade regulation.............................................................................. 36 Currency regulation and repatriation of profits....................................... 37 Taxation.......................................................................................................... 39 Accounting..................................................................................................... 46 Intellectual property.................................................................................... 48 Dispute resolution and arbitration............................................................. 49 SECTORS REVIEW 55 Energy............................................................................................................. 56 Chemicals....................................................................................................... 58 Agriculture..................................................................................................... 59 Food processing............................................................................................ 61

[close]

p. 5

Textiles........................................................................................................... 63 ICT.................................................................................................................... 64 Construction.................................................................................................. 66 Machinery and equipment........................................................................... 68 Transport and logistics................................................................................. 69 Tourism and hospitality............................................................................... 71 Financial services.......................................................................................... 73 Insurance........................................................................................................ 74 Industrial parks............................................................................................. 74 Agro-Parks...................................................................................................... 76 High-Technology Parks................................................................................ 76 OVERVIEW OF THE REGIONS 79 Absheron........................................................................................................ 80 Aran................................................................................................................. 80 Ganja-Gazakh................................................................................................. 81 Guba-Khachmaz............................................................................................. 81 Daglig Shirvan............................................................................................... 82 Sheki-Zagatala............................................................................................... 82 Lankaran......................................................................................................... 83 Nakhchivan.................................................................................................... 83 Yukhari Garabakh.......................................................................................... 84 Kalbajar-Lachin.............................................................................................. 84 GENERAL INFORMATION 87 Business etiquette....................................................................................... 88 USEFUL CONTACTS 97 ANNEXES & MAP 117

[close]

p. 6

6 COUNTRY INFORMATION

[close]

p. 7

In 2015, Azerbaijan’s economy developed. Of course, the development which was observed in previous years has not been achieved. That was not possible, because oil prices have fallen 3-4 times. The rate of our currency has undergone devaluation. It was inevitable after the immediate drop in the oil prices that prevented to keep the value of manat at the same level. Despite this, the Azerbaijani economy has grown. The gross domestic product increased by more than 1%, industrial production by 2.4%, agriculture by 6.6% and the non-oil industry by 8.4%. These are important figures, since it shows that the development of the non-oil sector in recent years is a result of our reformist policy. More than $180 billion have been invested in the Azerbaijani economy over the past 11 years, of which the last year’s share is the amount of about $27 billion, including $11 billion of foreign investment. This means Azerbaijan asserts itself as an attractive country for foreign investors. Other economic indicators are also positive. So, according to the report of the World Economic Forum, Azerbaijan was ranked 40th for global competitiveness in the world. The World Bank’s Doing Business 2015 Report places Azerbaijan among the world’s top 10 reformist countries. Moreover, Azerbaijan is 10th in the world for ease of immovable property registration and 11th for starting a business. Azerbaijan plays an active role in establishment of regional transport corridors and modern transport infrastructure. Both East-West and North-South transport corridors pass through Azerbaijan. The largest trade Seaport in the Caspian basin is being built here. The seaport will have a capacity to process 25 million tons of cargo and 1 million TEUs. In 2015, a historic event in the life of our country took place. European Games were held in Azerbaijan for the first time. 6,000 athletes and thousands of visitors were able to see firsthand the realities of Azerbaijan. These realities multiply our credibility and will contribute to an increase in the volume of future investments and the number of visitors to Azerbaijan. Azerbaijan is a country of stability where public and political harmony prevails. The unity between the people and the government in Azerbaijan has strengthened further, and these factors contribute to our successful development. The Azerbaijani people live in safety, and the ‘well-being’ of our people will improve every other year. Today, Azerbaijan is a dynamic and rapidly developing country that goes down the path of democracy, freedom, independence, progress and development. Our successful development will be provided in future. Ilham Aliyev – President of the Republic of Azerbaijan.

[close]

p. 8

8 COUNTRY INFORMATION

[close]

p. 9

COUNTRY INFORMATION 9 9 COUNTRY INFORMATION

[close]

p. 10

AZERBAIJAN: STATE, GEOGRAPHY AND HISTORY IN BRIEF 10 Azerbaijan is one of the world’s cradles of civilization. In Gobustan, about 70 kms south of Nizami, Nasimi, Tusi and other Azerbaijani poets and schol­ars are now regarded as the patriarchs COUNTRY INFORMATION Baku, are Petroglyphs dating back to the 12th of this civilization, and contributed extensively Century BC. The area was regarded by another to the Islamic Renaissance from the 9th to the ancient civilization, the Roman Empire, as more 13th century. ancient than their own. 14 centuries later, the area is a UNESCO World Heritage site, which The Middle Ages were a period of several large puts Azerbaijan history and culture on the same regional empires. These were predominantly level as sites in Egypt and China. Turkic. Some of the mightiest dynasties were of Azerbaijani origin, including the Karakoyun- The location of Azerbaijan as the strategic lu, Agkoyunlu and Safavids. Despite the dom- meeting point of Asia, Europe, Eurasia and the inance of large states on the regional political Middle East, led to the country being a key mi- arena, northern Azerbaijan (Shirvan) managed gration and trade route for humanity. This has to sustain some autonomy and independence influenced the country’s ethnic mix. It is a hybrid throughout the whole period, including the hec- of Turkic, Persian, European and Caucasian influ- tic times of the Mongolian invasion and the Tey- ences, which gives the region a unique history. murids. The first recorded States on the territory of Azerbaijan date back to 9th Century B.C. The states of Manna, Maday and Albania, with their own unique traditions, succeeded one another in the period to follow. In the 8th Century the Arabic conquest of Azerbaijan commenced. The Khalifat had long competed with the Turkic ‘Khazar Kaganat’ for domination. Eventually Arabs prevailed and Azerbaijan remained under Arabic rule for around three hundred years. This was interrupted for a short period of twenty years, when a large scale ‘Hurammi freedom movement’ led by the leader Babek, overthrew the Arabs in Azerbaijan and parts of Iran. From the period of Arabian conquest onwards, Azerbaijan became an integral part of the Islamic cultural tradition. By the 18th century, the country consisted of a few independent Khanliqs (principalities). The new regional power, the Russian empire, eventually conquered Northern Azerbaijan. After the 1828 Turkmanchay Peace Treaty with Persia, the country was divided and southern Azerbaijan was left under Persian sovereignty. The late 19th – to early 20th centuries were a period of cultural and economic regeneration for Azerbaijan. In the 1860’s the industrial exploitation of the Azerbaijani oil fields commenced. This witnessed the emergence of international businesses including the Nobel Brothers, Rothschild, Siemens and others. Indeed, the Nobel Brothers made their fortune in Baku, to become one of the world`s lar­gest companies.

[close]

p. 11

The economic rise led to a cultural revival. The traditional Islamic & Oriental cultural influence was enriched by the growing European and Russian in­fluence. The 19th and 20th centuries were the period of major advancement in Azerbaijani social life. The most notable cultural advances included the first opera in the Muslim world, a national drama theatre, the adoption of a “modern” Latin alphabet, and the first school for Muslim girls in the Islamic world. Today’s Republic of Azerbaijan is the successor of the Azerbaijan Democratic Republic (ADR) declared on 28th May 1918 by the first Azerbaijani parliament - National Assembly (Milli Majlis). Though short lived, ADR was the very first democratic republic in the whole Islamic world. Such measures as electoral rights for women, representation of ethnic minorities in Parliament, and other progressive initiatives were introduced in the country. These initiatives were ahead of their time, not only in the Middle East and Eurasia, but in the old democracies of Europe as well. After the short life of ADR, the 11th Soviet Red Army occupied Azerbaijan in late April 1920. Azerbaijan became part of the Soviet Union, but decl­ared its independence in 1991. The consequences of the disintegration of USSR were complicated by the ongoing aggression by the Republic of Armenia. Armenian nationalists backed by the late Soviet administration launched a separatist movement in Western Azerbaijan (Nagorno-Karabakh). A long lasting and bloody military conflict started in 1988. The conflict was further complicated by civil confron- tation within Azerbaijan. A few political groups were competing for power in the country. A succession of weak, largely unstable governments ended in 1993 when veteran politician and popular leader Heydar Aliyev was elected President. A decade of rehabilitation and growth started. Under the leadership of Heydar Aliyev, the government re-established peace and stability in the country rein­forced state infrastructure and civil rule throughout the country. It launched a proactive foreign policy campaign aimed at the political integration of Azerbaijan internationally. In 1994 a major oil & gas contract with the consortia of oil giants such as BP, Amoco, Total and others were concluded into the “Contract of the Century”. Along with economic rehabilitation, the government of Azerbaijan launched major political reforms aimed at bringing the country up to international standards in the areas of the rule of law, democracy, human rights and freedoms. The era of Heydar Aliyev ended in December 2003 with his sad death, but the policy decisions taken by him remain the undisputed development priorities for the current government. These include proactive foreign policy, democratization, the creation of a liberal market economy and socially oriented policies. His far-seeing policy is being successfully continued by his successor Ilham Aliyev who was elected President for three consecutive terms in 2003, 2008 and 2013. COUNTRY INFORMATION 11

[close]

p. 12

COUNTRY INFORMATION 12 Heydar Aliyev President of the Republic of Azerbaijan, in office 24 June 1993 - 31 October 2003

[close]

p. 13

ESTABLISHMENT INDEPENDENCE CAPITAL 28 May 1918 18 October 1991 (II Republic) Baku LANGUAGE CURRENCY Azerbaijani Azerbaijani Manat 13 COUNTRY INFORMATION TERRITORY Land territory of 86,600 km2 (12% forests, 1.7% water, 55.1% agricultural lands (30.5% of which are pastures) and 31.2% other lands). The territory also includes Azerbaijani sector of the Caspian Sea. NEIGHBOURS Borders in the south with Iran (765 km) and Turkey (15 km), Russia in the north (390 km), Georgia in the north-west (480 km), Armenia in the west (1007 km). The coastline of Caspian Sea shared by Azerbaijan is 825 km. COUNTRY LOCATION 44˚- 52˚ E, 38˚- 42˚ N POPULATION 9593,0 thsd (53.1% urban, 46.9% rural)

[close]

p. 14

POLITICAL SYSTEM FOREIGN POLICY Government form 14 Republic LEGISLATIVE BRANCH DIPLOMATIC RELATIONS with 171 countries COUNTRY INFORMATION Legal system Civil Law EXECUTIVE BRANCH Head of State President Head of Government Prime Minister Parliament Unicameral National Assembly (Milli Mejlis) JUDICIAL BRANCH Constitutional Court, Supreme Court, Court of Appeals, Courts of First Instance MEMBER OF UN, Council of Europe, OSCE, Commonwealth of Independent States, GUAM (Georgia, Ukraine, Azerbaijan and Moldova alliance), Non-Aligned Movement, Organization of the Black Sea Economic Cooperation, Organization of Islamic Cooperation, European Bank for Reconstruction and Development, Asian Development Bank, World Bank, International Monetary Fund, Islamic Development Bank, Black Sea Trade & Development Bank. ECONOMIC SNAPSHOT GDP (BLN USD) 66.0 NON-OIL GDP (BLN USD) 32.2 GDP PER CAPITA (USD) 7285 INFLATION (%) 7.9 69.7 37.2 7594 1.1 2011 2012 74.2 41.6 7977 2.4 2013 75.2 45.9 7986 1.4 2014 53 23.2 5559 4 2015

[close]

p. 15

EXTERNAL DEBT (BLN USD) 4.8 TOTAL INVEST. (BLN USD) 21.6 FOREIGN INVEST. (BLN USD) 8.6 DOMESTIC INVEST. 12.9 (BLN USD) FDI (BLN USD) 4.3 2011 5.7 25.8 10.3 15.5 5.4 2012 6.1 27.3 10.5 16.8 6 2013 6.5 27.7 11.5 16.2 7.6 2014 6.9 19.4 15 COUNTRY INFORMATION 10.7 8.7 7.5 2015 FOREIGN TRADE (BLN USD) 36.4 33.6 34.7 2011 2012 2013 31.0 2014 20.6 2015

[close]

Comments

no comments yet