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Local business incentives - Legal forms of companies - Registration and licensing procedures - Legal framework - Foreign exchange control - Regulations concerning equity investment - FDI inflows - Expertise of the political risk

Local business incentives

A free trade zone has been created in order to encourage the country's development by attracting foreign investors. This zone is located in Sumgeait, an industrial town by the Caspian sea, 25 kilometres North of Baku. Metallurgy , Chemistry, Petrochemistry and Textile Industries are mainly enhanced.


Legal forms of companies

Form Number of partners/shareholders Minimum and/or maximum capital Liability Registration fee Release of financial documents
Sole proprietorship 1 person.
No minimum capital. The owner is liable for debts of the company on his personal assets. No
Private Limited Company No minimum. No minimum capital. Liability is limited to the amount contributed. No
Public Limited Company. Minimum 3 partners. No minimum capital. Liability is limited to the amount contributed. Yes
General partnership. Minimum 2 partners. No minimum capital. Liability is unlimited. No
Limited partnership. Two types of partners: active partners and sleeping partners. No minimum capital. Liability of active partners is unlimited.
Liability of sleeping partners is limited to the amount contributed.

Registration and licensing procedures
Legal clauses concerning registration are vague and contradictory: registration is the first difficulty that entrepreneurs meet when setting up a company in this country.

Foreign exchange control
The manat is only convertible on the Azeris territory. All currencies transactions are checked by the ANB (Azerbaijan National Bank), which also controls the foreign currencies and gold reserves of the country. Individual or legal entities can open in Azerbaijan a foreign currencies account, after authorization. Foreign investments' profits and possible liquidation profits can be converted into foreign currencies and repatriated with no limitation.

Regulations concerning equity investment
A majority holding interest in the capital of a local company is legal in Azerbaijan.

Foreign Direct Investment inflows in Azerbaijan

FDI inflows 2003 2004 2005 World rank (*)
FDI inflows (USD million) 3 285 3 556 1 680 1/141
Source : UNCTAD - World Investment Report
Note : (*) World Rank = UNCTAD Inward FDI Performance Index. It is a measure of the extend to which a host country receives inward FDI relative to its economic size. It is calculated as a ratio of the country's share in global FDI inflows to its share in global GDP.


Last modified in 2006 - ongoing update
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