Frequently
Asked Questions
General Questions on
Investment in Azerbaijan
Foreign nationals or companies enjoy the same rights with the Azerbaijani persons when it comes to purchasing or owning real estate – they can own real estates of any type (flats, apartments, condos, commercial real estate etc.). However, ownership of land plots by foreign natural persons is an exception – foreigners and foreign companies cannot own land plots in Azerbaijan. But, the law does not prohibit the foreign natural persons to lease (possess) land plots for a long-term period (e.g., up to 99 years). Further, legal entities registered in Azerbaijan, which are owned by foreign natural persons or legal entities, may also purchase or own land plots.
Effective general corporate tax rate for micro businesses (annual turnover under 200,000 AZN) and solo entrepreneurs (annual turnover under 200,000 AZN) ranges between 2-5%, other businesses is 20%. VAT (Value Added Tax) rate is 18%.
Foreign natural persons or legal entities may establish their businesses in Azerbaijan through incorporation of legal entities or registration of branch/representative offices of their legal entities or registration as a solo entrepreneur. There are no limitations on the shareholding percentage to be owned by the foreign natural person or legal entity. Unlike many jurisdictions, local business partner is not required. A company can be owned 100% by the foreign individuals and legal persons. Foreign natural persons may also register as sole entrepreneurs without incorporating a legal entity.
For individuals, a copy of the passport of such individual is sufficient to start the company registration proceedings. As to foreign companies, the documents confirming registration of such company in the country of registration, bearing an apostille (or legalization) will need to be produced in order to register a company (branch office).
Company (branch office) registration takes 2 business days from the date of submission of necessary documents to the relevant state agency.
There are no limits or minimum investment amount or any additional requirements to be complied with by foreign natural persons or business when establishing their presence in Azerbaijan. Save for joint-stock companies and subject to the minimal state fees, the investment capital can be as low as 10 AZN.
Questions on
Residence and Work Permits
Shareholders (participants) of the business (legal entity) may apply for temporary residence permit (TRP) after registration of the company, provided that they are employed by the company, as a manager or deputy manager. Foreign natural persons, who register as sole entrepreneurs must employ at least five Azerbaijani nationals in order to be eligible for TRP.
TRP application process takes 15 business days (expediated) or 20
business days (standard process).
TRP issued for up to one year, to be extended usually for one year on each application.
Direct family members (wife/husband) and children under 18 are qualified for a dependent TRP on the ground of being family members of the TRP applicant.
Managers and deputy managers of a legal entity, owned by foreign natural and legal persons, are not required to obtain a work permit. Foreign natural persons, who register as sole entrepreneurs, are not required to obtain a work permit if they employ at least five Azerbaijani nationals. All other foreign natural persons not falling into the above criteria can be employed only after their employers obtain a work permit for such persons.
In general, any foreign person can incorporate a company or register a branch of his/her business in Azerbaijan regardless of the type of visa s/he holds. However, persons wishing to apply for TRP after registration of business must enter the country either on a business visa (shareholder-(deputy) managers) or work visa (non-shareholder – (deputy) managers or persons who intend to apply for work permit). Important to bear in mind that, it is not possible to change tourist or personal visit visas to other type of visas (i.e., business, employment etc.) while being present in Azerbaijan.
Ownership of property with a value of 100.000 AZN or more allows the owner and his/her immediate family members under 18 to obtain TRP.
Azerbaijani law does not discriminate between the property owned by locals or foreign persons. Under the current tax law, a purchase tax is applicable upon acquisition of the property and further, annually collected property tax is imposed on owners. Both taxes are calculated as per square meter of the property and can be considered very low or intangible in comparison with European and MENA region countries.
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