Investment Law in Azerbaijan: A Guide to Investment Law in Azerbaijan

Vigo Visa
5 days ago
3 min read

Investment Law in Azerbaijan: A Guide to Investment Law in Azerbaijan

Azerbaijan is an attractive investment destination due to its strategic location between Europe and Asia, its developing economic environment, and government incentives for foreign investors. Here is a comprehensive guide to the investment law in Azerbaijan, including key provisions, incentives, and rights, along with frequently asked questions and in-depth answers about investment law in Azerbaijan.

Overview of Investment Law in Azerbaijan

Legal Framework in Azerbaijan: Investment in Azerbaijan is governed by the Foreign Investment Law No. 57-IG issued in 1992, along with other laws regulating companies, taxes, and property protection.
Types of Investments in Azerbaijan: The law in Azerbaijan allows for direct investment (establishing companies or branches), indirect investment (buying shares or bonds), and joint ventures with local companies.
Equality in Azerbaijan: Azerbaijani law guarantees equal treatment for local and foreign investors.

Incentives and Facilities for Foreign Investors in Azerbaijan

Tax Exemptions in Azerbaijan: Certain vital sectors (such as agriculture and information technology) enjoy tax exemptions or reductions from the Azerbaijani government.
Capital Protection in Azerbaijan: Expropriation may only occur under the law in Azerbaijan, with fair and prompt compensation.
Free Transfer of Profits in Azerbaijan: Investors can freely transfer profits and capital abroad after paying the applicable taxes as stipulated by Azerbaijani law.
Special Economic Zones in Azerbaijan: Industrial and free zones provide additional advantages such as advanced infrastructure and simplified procedures.

Company Formation Procedures in Azerbaijan

Establishing a Company in Azerbaijan: A limited liability company can be established within a few days, with low capital requirements if residency in the country is not desired.
Licenses in Azerbaijan: Some economic sectors in Azerbaijan require special licenses (financial sector, energy, health).
Tax Registration in Azerbaijan: Registration with the tax authority is required to obtain a tax number, as Azerbaijani investment law stipulates that a tax number is necessary to commence business in Azerbaijan.

Protection of Foreign Investors in Azerbaijan and Dispute Resolution

Legal Protection in Azerbaijan: The law in Azerbaijan ensures protection of investment from confiscation or arbitrary nationalization.
Arbitration in Azerbaijan: Local arbitration can be sought in case of a dispute, and Azerbaijan is a member of the New York Convention on the Recognition of Foreign Arbitration Awards.

Frequently Asked Questions about Investment Law in Azerbaijan

1. What are the main incentives available to foreign investors in Azerbaijan according to the law?

Foreign investors receive tax exemptions or reductions in certain sectors, legal protection of capital, freedom to transfer profits, and the possibility to invest in special economic zones that offer advanced infrastructure.

2. Can foreign investors own real estate and land in Azerbaijan?

Foreigners can own real estate (buildings), but land ownership is restricted to citizens and local companies; foreign investors can lease land for long periods.

3. How are disputes between investors and the state resolved in Azerbaijan?

Investors have the right to resort to local or international arbitration, and Azerbaijan is committed to enforcing international arbitration awards under the New York Convention.