Investment climate

The government pursues an "open door" policy to attract investment in the country's economy. Currently, the Azerbaijani Government takes measures to follow up economic reforms in the country, further improve the business environment and develop the non-oil sector.

The investment climate of the Republic of Azerbaijan is regulated by the protection of the rights and interests of investors, the inviolability of property, the creation of level playing field for local and foreign entrepreneurs, the organization of Appeal Councils, Laws “On investment activity”, "On the protection of foreign investments", "On the suspension of inspections in the field of entrepreneurship" and a number of regulatory documents.

On November 2, 2015, the Ministry of Economy began issuing licenses through “ASAN Service” centers, except for cases related to state security, according to the Presidential Decree no. 650 of the Republic of Azerbaijan "On reducing the number of types of business activities requiring special permits (licenses), simplifying the procedures for issuing special permits (licenses) and ensuring transparency" dated October 19, 2015. Moreover, the Presidential Decree no. 713 of the Republic of Azerbaijan "On certain measures in the field of licensing" dated December 21, 2015 reduced the number of activities requiring a license from 59 to 37, declared the valid term licenses issued so far to be perpetual, established new licenses for an indefinite period, reduced the amount of the state fee paid for issuing licenses by about 2 times, and 4 times - by regions (excluding regional television and radio broadcasting), increased the number of state licensing bodies from 23 to 4, and the period for issuing licenses from 15 to 10 working days, as well as simplified the procedures required for issuing a license.

One-stop-shop approach

In light of the use of electronic services, modern technologies and international best practices in the country, the registration of business entities in Azerbaijan has been simplified through the use of the “one-stop-shop” system. With the introduction of electronic services, online registration of entrepreneurial activities of individuals and legal entities and electronic receipt of tax returns began. According to the Resolution no. 300 of the Cabinet of Ministers of the Republic of Azerbaijan dated September 8, 2014, the period for obtaining an electronic signature was reduced from 2 days to 1 day. Also, the examination of construction projects in the “one-stop-shop” mode has begun pursuant to the requirements of the "Rules for the examination of construction projects". As a follow-up to the reforms, in October 2015, the Coordinating Council on Transit Freight was established, and its Regulations and composition were approved. The principle of "one-stop-shop" is provided when transporting transit freight from the territory of the Republic of Azerbaijan by rail, sea transport, sea ports and sea terminals, and the Coordinating Council is entrusted with the implementation of the powers of a single state body for the application of this principle.

Customs regime and taxation

Presidential Decree no. 745 of the Republic of Azerbaijan dated January 18, 2016 approved the “Rules for issuing investment promotion documents”, which serve as the basis for obtaining benefits provided by the Tax Code and the Law “On customs tariff”. Accordingly, in compliance with the amendments made to the Tax Code of the Republic of Azerbaijan on January 19, 2016, legal entities and individual entrepreneurs who have received an investment promotion document are exempted from paying 50 percent of profit and income tax, property tax in respect of the relevant property and land tax on lands owned or used, as well as value added tax when importing machinery, technological equipment and facilities for a period of 7 years. Moreover, the amendments made to the Law of the Republic of Azerbaijan "On customs tariff" dated January 19, 2016 exempted from import duties the import of machinery, technological equipment and facilities by legal entities and individual entrepreneurs, as well as residents of industrial or technology parks who have received an investment promotion document for a period of 7 years, and the import of machinery, technological equipment and facilities by the managing organization or operator of industrial or technology parks. In accordance with the Presidential Decree no. 811 of the Republic of Azerbaijan “On additional measures to stimulate non-oil exports” dated March 1, 2016, persons involved in the export of non-oil products will be entitled to an export promotion at a base rate of 3% of the value indicated in the export customs declaration (by applying coefficients to the base amount of export promotion depending on the type of product). At the same time, the Presidential Decree no. 1853 of the Republic of Azerbaijan "On additional measures to continue reforms in the customs system" dated March 4, 2016 sets the tasks associated with the further expansion of electronic customs services, minimization of the number of documents and procedures required for customs clearance, creation of the "Green Corridor" and other existing clearance systems for the movement of goods and vehicles across the customs border by submitting to the customs authorities in advance a brief import declaration in electronic form, and solution of other complex issues.