Azerbaijan

Ease of Doing Business Rank: 34 

Overview 

Geographic location 

Azerbaijan is a country in Eurasia at the crossroads of Eastern Europe and Western Asia.  

The Caspian Sea lies to the east, Russia to the north, Georgia to the northwest, Armenia to the west and Iran to the south.  

Spoken language 

The official and principal language is Azerbaijani, spoken by 92.5% of the population. Russian and English play significant roles as languages of education and communication.  

Population 

The 2019 population is approximately 10.05 million. 

Over a fifth of the population lives in the capital city of Baku (2.26 million), followed by Ganja (332,600), Sumquayit (341,200), Lankaran (226,900), and Mingachevir (104,500)All remaining cities are under 100,000 and almost half the population lives in rural areas. 

Popular industries 

The top industries in Azerbaijan are energy, mining, agriculture, science and technology, banking, manufacturing, telecommunications and tourism. 

Education 

The Times Higher Education World Rankings does not include any Azerbaijani universities in its top ratings. 

The Legatum Prosperity Index ranks Azerbaijan’s education system 52nd out of 149. 

Popular entity types 

The most common type of business entities in Azerbaijan are limited liability company, partnership, and joint stock company.  

The overwhelming majority of businesses are limited liability companies. 

Azerbaijani incentives for business 

Companies may enjoy various tax and customs benefits via an investment promotion certificate. Benefits depend on the area, administrative territory, and investment threshold and may include a 50% income tax exemption, 100% property and land tax exemption and customs duties exemptions. 

Azerbaijan also has over 60 bilateral tax treaties, including one with the OPEC Fund for International Development. 

Azerbaijan technology parks offer a hub for information and communication, space and telecommunication and infrastructure to create new and advanced technologies.  

The country has also created an online Digital Trade Hub in the Azerbaijan website for electronic services including document execution, trans-border transactions, and obtaining export permits and declarations. 

Azerbaijan also has special economic zones aimed at logistics and transportation. Companies may establish their own with approval. Businesses benefit from no import or VAT on imported goods and goods imported and then exported outside these areas.  

Residents pay simplified tax of 0.5% tax on revenueInvestments, revenue and income of residents can be transferred abroad. 

The country also has self-governed Free Economic Zones for entrepreneurial and investment activities. Each authorized body, its administrative entities, employees, and residents are tax exempt for activities within the Free Zone. They may conduct business in any currency and can transfer funds abroad without limitations. English is a working language. 

History & Features 

 

Main cities for business 

The capital, Baku, is the center of business in Azerbaijan. 

Popular historical & tourist attractions 

Azerbaijan offers a mix of ultra-modern and ancient architecture. The jaw-dropping Heydar Aliyev Center features peaks and waves in an extraordinary example of 21st-century modern designHowever, the three Flame Towers ranging from 28 to 33 stories dominate the Baku skyline. 

The contrasting Walled City of Baku with the Shirvanshah’s Palace and Maiden Tower are a UNESCO World Heritage site. The Walled City shows evidence of many cultures including Zoroastrian, Sasanian, Arabic, Persian, Shirvani, Ottoman, and Russian. 

Xan Sarayı palace built in 1762 is packed with vivid murals and stained-glass windows. Medieval Alinja Castle up 1500 steps on a craggy mountain is partially surrounded by walls mimicking its original 12th-century design.  

Farther afield lies Fazıl Labarynth lined with excavated grave sites and their goods dating back as far as the 7th century BC. The İmamzadə on the northern edge of Gəncə is an impressive Islamic structure, complete with complex brickwork and blue majolica tiles. 

The Gobustan Rock Art Cultural Landscape is another UNESCO site in the semi-desert area of central Azerbaijan. It features over 6,000 rock engravings across 40,000 years of history. 

History 

Azerbaijan’s location between the Caspian and Black seas always acted as a desirable crossroadbetween Asia and Europe.  

In the 6th century, Armenian missionaries introduced Christianity to the area. However, after the 11th century the territory was dominated by Turks and became the stronghold of the Shiite Muslim religion and Islamic culture. 

In 1236, Genghis Khan and his Mongolian warriors conquered the land. They remained in power until 1498. Around 1500, Persia ruled the region with its capital in Tariz. Their rule ended in 1722 and north Azerbaijan was divided into many states. 

Russia acquired much of this northern territory from Persians through several treaties. However, the Bolshevik Revolution led to Azerbaijan declaring independence in 1918. Russia retook the area and it became part of the Transcaucasian Soviet Socialist Republic in 1922. In 1936, it became a separate Soviet Republic. 

During World War II, Germany reached the Great Caucasian Mountains. However, Soviet forces prevented them from entering Azerbaijan. 

By the end of the 1980s, Soviet power dwindled and by 1991, Azerbaijan declared independence. Today, Azerbaijan is a semi-presidential republic with a free market economy.  

Other relevant facts 

Azerbaijan is an overwhelmingly Muslim country. Pew Research estimates 99.2% of the population identifies as Muslim. 

Approximately 92% are ethnic Azerbaijani, followed by Lezgin (2%), Armenian (1%), Russian (1%), and Talyshi (1%). 

Additional Information for Business 

According to Forbes’ 2019 Best Countries for Business, Azerbaijan is the 70th best country in the world for conducting business.  

The 2019 Index of Economic Freedom rates Azerbaijan 60th globally and states, “Continued market-based improvements in regulatory efficiency and further restructuring are needed to capitalize on the well-educated labor force and broaden the production base. 

World Bank’s “Doing Business” rankings rate Azerbaijan 25th for ease of doing business in the world. 

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