AZERBAIJAN: LAND OF OPPORTUNITIES

Azerbaijan stands out with its strategic location, strong infrastructure, and investor-friendly incentives. Free trade agreements, tax exemptions, and long-term financing products offer a wide range of opportunities. The Azerbaijan Trade Representative Office in Türkiye guides business people and aims to further strengthen economic cooperation between the two countries

In addition to having a rich history and culture, Azerbaijan is an attractive center for business people with its strategic advantages, rapidly developing a modern economy and comprehensive incentives. Thanks to these incentives, tax advantages, and other government support, Azerbaijan offers investors an investment environment that provides long-term profits. We present this investment environment, the most up-to-date information and important data on Azerbaijan in line with the information shared by Azerbaijan’s Trade Representative in Türkiye.

STRATEGIC LOCATION AND TRANSPORTATION NETWORKS

Located on the North-South and East-West transportation corridors, as well as the Middle Corridor, Azerbaijan is connected to many countries. Thanks to its air, sea, land, and rail infrastructure, Azerbaijan offers great opportunities for access to regional and international markets. Baku Port is the largest commercial port on the Caspian Sea and plays a critical role in the transportation processes between Central Asia and Europe.

STRONG ECONOMIC STRUCTURE AND FAVORABLE INVESTMENT ENVIRONMENT

As of 2023, Azerbaijan’s GDP exceeded 72 billion dollars, while its foreign trade with 193 different countries and total foreign trade volume reached 45 billion dollars. Total investment in Azerbaijan between 1995 and 2023 exceeded 341 billion dollars, of which more than 171 billion dollars came from foreign capital. Moreover, the manat-dollar exchange rate has remained stable at 1.7 since 2015, supporting economic stability.

ACCESS TO A 280 MILLION POPULATION MARKET

Azerbaijan has signed free trade agreements with 10 countries (Russia, Kazakhstan, Kyrgyzstan, Turkmenistan, Turkmenistan, Uzbekistan, Tajikistan, Georgia, Ukraine, Belarus, and Moldova), providing direct access to a market with a total population of 280 million through Azerbaijan.

INVESTOR FRIENDLY POLICIES AND INCENTIVES

Azerbaijan guarantees the rights and freedoms of investors with the “Law on Investment Activity” and offers various incentives for business people. Investors operating in industrial parks, industrial districts, and free economic zones are granted extensive tax and customs exemptions. On the other hand, Azerbaijan also offers various financial support mechanisms to its investors:

Industrial Parks, Industrial Districts, and Agricultural Parks: Azerbaijan has 9 industrial parks, 4 industrial Districts, and 24 agricultural parks. In these regions, investors are provided with advanced infrastructure facilities and organizational support.In addition, residents of industrial parks are exempt from corporate tax, real estate tax, land tax, VAT, and customs duty on imported machinery and equipment for 10 years. Residents of agricultural parks are offered subsidies, low-interest loans, leasing, and other incentives, as well as direct farmer support, single window service, and provision of infrastructure facilities.

Alat Free Economic Zone: As the largest free economic zone in the Caucasus, it is located on a global transportation hub with unique legislation. In addition to exemption from VAT, corporate tax, withholding tax, customs duties, and customs taxes without any maturity limit, the zone also offers various additional advantages to investors engaged in production.

Karabakh Region: Karabakh, which was liberated from occupation, has been declared a “smart” and “green” region. Investors in Karabakh are provided with additional benefits such as the state reimbursement of 20 percent of utility payments and the state’s share of compulsory state social insurance payments for employees.

Investment Incentive Certificate: Investors who obtain the Investment Incentive Certificate in Azerbaijan are exempt from VAT and customs duties on the import of machinery, technological equipment and facilities, real estate and land tax, 50 percent income tax for individual entrepreneurs, 50 percent profit tax for legal entities, for 7 years.

Long Term Loans: Investment projects in Azerbaijan are eligible for discounted (5 percent) loans from 50 thousand manats (29.5 thousand dollars) to 10 million manats (5.9 million dollars) with maturities of 3, 5 and 10 years.

Opportunities for Partnership with the State: Azerbaijan Investment Company provides financing up to 30 percent of the capital investment of projects worth more than 500 thousand manats (295 thousand dollars). TRADE OPPORTUNITIES Methanol, plastics, aluminum, fertilizer, gold, cement, iron, steel, copper, glass, and many other raw materials and products are available in Azerbaijan. Duty-free trade is offered for 30 types of products from both countries within the scope of the Preferential Trade Agreement signed between Azerbaijan and Türkiye. Also, Necessary arrangements are being made to develop border trade between Azerbaijan and Türkiye, to facilitate contacts and communication between business people and to accelerate transit.

COMPREHENSIVE PROJECT PORTFOLIO FOR INVESTORS

Azerbaijan offers a wide range of project opportunities for investors in various sectors. More than 30 existing investment projects are shaped in sectors such as agriculture, tourism, real estate, chemical industry, renewable energy, mining, and heavy and light industry. These projects are divided into two categories: “greenfield” (greenfield investment) and “brownfield” (development of existing investments).

TRADE REPRESENTATIVE OFFICE OF AZERBAIJAN: ECONOMIC BRIDGE BETWEEN TWO BROTHER COUNTRIES

Azerbaijan’s Trade Representative Office started operations in Istanbul in July 2023 to facilitate access of Turkish businesspeople to Azerbaijan’s business community and to coordinate with potential partners.

Similar representative offices of Azerbaijan currently operate in five different countries. Azerbaijan Trade Representatives are appointed by the Minister of Economy with the approval of the President of the Republic of Azerbaijan and have the title of Envoy Extraordinary and Plenipotentiary of the 2nd Degree. Trade Representative Offices are located within the Ministry of Economy and operate with the support of the Embassies and Consulates General of Azerbaijan.

The Trade Representative Office in Türkiye informs Turkish businesspeople about Azerbaijan’s investment climate, incentives and exemptions, and import-export opportunities, and assists investors in establishing business relations, together with units within the Ministry of Economy and other relevant institutions. In addition, the Office promotes technology transfer and explores opportunities for companies of the two countries to work together in third countries in different fields. Under the slogan “If you are considering a foreign investment, come to Azerbaijan, which is not alien to you”, the Trade Representative Office actively works to strengthen economic ties between the two countries and provides guidance to investors.