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CONTENTS

Preface ......................................................................................................................................... 3

Foreign Investment and Protection of International Investments ........................................ 4

Banking & Finance ..................................................................................................................... 5

Islamic Banking& Finance ..................................................................................................... 5

Capital Markets ........................................................................................................................... 6

Tax &Taxation ............................................................................................................................. 6

Simplified tax ........................................................................................................................... 7

Customs duties and regimes .................................................................................................... 8

“Single Window” ...................................................................................................................... 9

Real estate & Property ownership ........................................................................................... 9

Employment ............................................................................................................................... 10

Currency regulation .................................................................................................................. 10

Licensing & Permits ................................................................................................................. 11

Intellectual Property ................................................................................................................. 11

Energy, Oil and Gas ................................................................................................................. 12

IT &Telecommunications Industry.......................................................................................... 13

Agriculture .................................................................................................................................. 14

Tourism ...................................................................................................................................... 14

Transportation ........................................................................................................................... 15

Railway transportation / Marine transportation ................................................................ 15

Industry....................................................................................................................................... 16

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Preface

Dear Investor!

2016 CLS* Guide on Doing Business in Azerbaijan scope includes the country’s business, legal and

investment climate. When we were preparing the Guide, we had in mind both local and foreign

investors. The aim of the Guide is to provide general and up-to-date information for everyone who

is interested in doing business in Azerbaijan. In the Guide you can find information about general

economic and business conditions in the country, legal framework, oil & gas, mining industry and

tax system. The Guide summarizes whole business and economic environment in Azerbaijan. In

case you need more detailed information and legal support, CLS team can advise you on projects

and transactions both in Azerbaijan, and in the CIS region.

We pride ourselves in our excellent reputation for providing the highest quality legal advice. All our

lawyers and consultants are qualified locally and internationally. Our lawyers and consultants are

graduates of the world known leading universities, such as Universities of Oxford, Cambridge,

Columbia, Erasmus, London School of Economics and King’s College London.

We hope that this Guide will be helpful for you in making your decision about investment in

Azerbaijan.

* CLS is the trade name of Capital Legal Services

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Foreign Investment and Protection of

International Investments

Foreign investment in Azerbaijan is widely

increasing nowadays. Azerbaijani market

offers a lot of opportunities for the potential

investors. Specifically, legal framework and

investment legislation are designed to provide

investors with various advantages and

benefits as well as with the strong investor

protection mechanism.

The following entities and individuals are

considered as foreign investors in Azerbaijan:

• Foreign legal persons;

• Foreign citizens, stateless persons,

and citizens of Azerbaijan with a

permanent residence abroad subject

to registration in their country of

residence for engaging in economic

activity;

• Foreign states;

• International organizations.

Foreign investments are generally defined as

all types of tangible and intangible rights,

including intellectual property rights,

contributed by foreign investors to

entrepreneurial and other types of activities

for the purpose of making a profit. Foreign

investors are shareholders in number of

Azerbaijani companies.

Azerbaijani law is evolving in accordance with

the government’s strategic goal of creating a

welcoming environment for foreign

businesses. Foreign investments are thus

protected by guarantees provided under law.

These include:

• Guarantee against deterioration of

legislation: a foreign investor is

assured that the laws governing its

investment will remain in force for a

period of 10 years from the initial

investment;

• Guarantee against nationalization and

requisition: foreign investors are

guaranteed immediate, adequate and

effective compensation in case of

nationalization and requisition.

Compensation must be

commensurate to the amount of the

investment at time of nationalization or

requisition, payable in foreign currency

and freely transferrable abroad;

• Guarantee of compensation of

damages: foreign investors are

entitled to compensation for damages,

including compensations for lost

profits resulting from the illegal acts of

state authorities;

• Guarantee of profit repatriation:

foreign investors are entitled to

repatriate profits derived from foreign

investments subject to applicable

taxes and duties.

The President of Azerbaijan approved the

Decree “On additional measures to promote

investment” dated 18 January 2016,

endorsing regulations on stimulating

investment in Azerbaijan using investment

certificates.

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Azerbaijan has concluded certain bilateral

investment treaties on the mutual protection

of investments with many countries such as

Turkey, UAE, Qatar, Saudi Arabia, USA,

Germany, Great Britain, Georgia, Poland, etc.

Azerbaijan signed a multilateral treaty on the

mutual protection of investments with the

OPEC Fund for International Development on

19 November 2002.

Inflow of foreign investment is increasing

rapidly.

The President of Azerbaijan signed the

Decree dated 17 March 2016 “On measures

to create a free trade zone type special

economic area in the Alat Township of Baku's

Garadagh district”. For this purpose an

agreement with foreign consulting companies

on provision of consulting services aimed at

creating of a special economic zone - free

trade zone was signed. This new project will

invite foreign investors and give a push to the

non-oil sector.

CLS has significant expertise and provides its

clients with business consulting services as

well as expert advice on a full spectrum of

international investments. Our expert team is

ready to help you to find an optimal and

profitable way for your investment in

Azerbaijan.

Banking & Finance

Azerbaijani banking system is keeping up

with the time.

Azerbaijani banking system is rapidly

developing and goes through the process of

various positive reforms. Azerbaijani banking

system consists of small number of banks

and a concentrated market where the

Financial Market Supervisory Authority

(“FMSA”) is the main regulatory body.

FMSA was established by Decree of the

President of Azerbaijan No. 760 dated 03

February 2016. The FMSA aims to license,

regulate and control the securities market,

investment funds, insurance, credit

organizations (banks, non-banking credit

institutions and operator of postal

communication) and payment systems, as

well as to improve the control system on

legitimating the anti-money laundering and

preventing the financing of terrorism, and

provide transparency and quickness in this

sphere.

Azerbaijani banks are not lagging behind a

number of foreign banks, and financial reports

of authorized persons of Azerbaijani banks

are prepared in accordance with international

financial reporting standards. Independent

auditors have been involved to make the

system more transparent which leads to

confidence of local and foreign investors. The

Law “On Banks” and the Law “On Non-

Banking Credit Organizations” are the

fundamental legislative documents in the area

of establishment and operation of banks.

CLS provides its clients with business

consulting services as well as expert advice

on a full spectrum of Banking and Financial

Industry and Transactions.

Islamic Banking& Finance

Islamic banking and finance is a novel

approach that has generated a lot of interest

amongst local and foreign financial and

banking institutions. Islamic Banking and

Finance have been rapidly developing in

Azerbaijani market for the last several years.

Especially, legislative framework that will give

boost to Islamic Banking and Finance is at the

finalization stage. Currently, there are local

and foreign financial and banking institutions

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that have set up Islamic banking windows in

order to conduct sharia compliant financial

and banking activities.

CLS has professional team in the area of

Islamic Banking and Finance that can guide

you through the relevant transactions as well

as provide the relevant advice.

Capital Markets

Capital Markets in Azerbaijan are growing up

rapidly. The Baku Stock Exchange (“BSE”) is

the main stock exchange in Azerbaijan. BSE

started its operations on 15 February 2000.

Azerbaijan adopted the Law “On the

Securities Market” dated 15 May 2015 for the

purpose of protection of the investor's rights.

Currently, the process is underway of bringing

Azerbaijani capital markets legislation in line

with EU and International standards.

The key mission for the near future regarding

capital markets is boosting growth in the non-

oil sector, attracting more savings of

companies and households, and transforming

them into investments on the BSE.

Capital investments of Azerbaijan are

increasing abroad too.

Tax &Taxation

For the last couple of years, tax legislation

and policies have been significantly improved

to meet the demands of local and foreign

investors and entrepreneurs. The Ministry of

Taxes of the Republic of Azerbaijan is

responsible for implementation of state tax

policy in the country.

Currently, there are following tax regimes in

Azerbaijan:

The statutory tax regime regulated by the Tax Code of the Republic of Azerbaijan (“Tax Code”);

The oil and gas taxation regime regulated by the Production Sharing Agreements (“PSA”) signed between Azerbaijan and foreign companies;

The tax regime for the companies working under the Host Government Agreements (HGA), which are exclusively for the BTC and South Caucasus pipelines.

The statutory tax regime applies to all

taxpayers with the exception of those falls

under the PSA and HGA regimes. The PSAs

and HGAs propose more favorable tax

regimes for the taxpayers operating under

their umbrella.

The Tax Code prohibits imposition of taxes

that are not specified by the Tax Code. The

following taxes are specified: corporate

(profits) tax, Value Added Tax (VAT), excise

tax, assets tax, property tax, land tax, road

tax, mineral resources tax, simplified tax.

Income tax may be paid by the resident and

non-resident physical persons. Under the

Tax Code a person is “resident” in any

calendar year (which is also the tax year) if he

or she is in Azerbaijan for an aggregate of

more than 182 days during that year.

Resident’s worldwide income is subject to

income tax subject to certain exemptions.

Income employment tax is assessed on a

progressive basis with two tax bands, 14

percent and 25 percent (the top rate applying

to monthly income over AZN 2,500).

The employee is also a subject to three

percent social security contribution (the

employer pays 22 percent).

A resident enterprise and non-resident

enterprise carrying on business in Azerbaijan

through a permanent establishment are liable

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for tax on profit at 20% gained from such

activity.

From 1 January 2013 profit of the residents of

the industrial and technological parks is

exempt of profit tax for the period of seven

years.

In addition to profit tax, repatriation of net

profit is by the nonresident’s permanent

establishment is subject to tax at 10%.

The income from the lease of movable or

immovable property paid by an Azerbaijan-

resident company to an individual is subject to

a final withholding tax of 14 percent.

Royalties paid to an individual by an

Azerbaijan-resident company or the

permanent establishment in Azerbaijan of a

non-resident is subject to a withholding tax at

source of 14 percent. Imported services are

generally subject to VAT reverse charge.

The rate of VAT is 18 percent.

The first PSA, and to date the most important

by large measure, was entered into on 20

September 1994 (Agreement on the Joint

Development and Production Sharing for the

Azeri and Chirag Fields and the Deep Water

Portion of the Gunashli Field in the Azerbaijan

Sector of the Caspian Sea). Both PSAs and

HGAs have one thing in common: the

participants or contractor parties themselves

(excluding the State Oil Company of the

Republic of Azerbaijan – SOCAR) are taxed

in accordance with the detailed provisions of

those agreements.

Under several PSAs foreign subcontractors

may enjoy simplified withholding tax (withheld

from gross payments and paid to the state

budget by the payers) which covers their

corporate tax responsibility.

Both Contractors and subcontractors are

exempt with credit (zero percent rates) from

VAT and import and export duties in

connection with Hydrocarbon Activities.

Simplified tax

This tax is intended to ease the tax burden for

small and medium size enterprises and is

levied in the place of general Profits Tax.

Simplified Tax is generally charged at the

following rates on the taxpayer’s gross

revenue:

• Operating in Baku 4%;

• Operating outside of Baku 2%.

From 1 January 2016, persons with annual

turnover of up to AZN 200,000 are eligible to

be registered as Simplified Tax payers.

Persons rendering trade and catering

services (e.g. restaurants, coffee shops, etc.)

with annual turnover exceeding AZN 200,000

may choose to be simplified taxpayers.

Simplified tax rate for them is 6% for trading

and 8% for catering services. A special rate

of simplified tax is set:

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• for the persons involved in residential

and non-residential housing

construction at a fixed amount of AZN

45 per square meter multiplied by an

applied coefficient;

• for the persons selling residential and

non-residential premises (except for

premises of individuals where he/she

has been residing for at least 5 years)

at a fixed amount of AZN 15 per

square meter multiplied by an applied

coefficient; the applied co-efficient

being determined by the regional

executive authorities.

CLS has market knowledge and experience in

both legal and tax consulting. We work in all

areas of commercial taxation and advise on

transactions spanning a wide range of

industries and jurisdictions.

Customs duties and regimes

There have been a set of positive reforms and

changes conducted in the customs sphere

that significantly improved the customs

related operations in Azerbaijan, including

import and export operations. The customs

duties in Azerbaijan are governed by the

following laws and regulations:

• Customs Code of the Republic of

Azerbaijan (“Customs Code”);

• Law “On Customs Tariffs”;

• Resolution of the Cabinet of Ministers

of the Republic of Azerbaijan No. 80

dated 12 April 2001 “On Import -

Export Duties Rates for Customs

Clearance Operations”, etc.

There are three types of customs duties:

Ad valorem duties (i.e., duties

calculated in percentage terms upon

the declared value of goods);

Specific duties (i.e., duties based on a

specific number of units of goods);

and

Composite duties (i.e., duties

calculated through a combination of

the other two methods).

In accordance to the Law on Customs Tariffs

following are exempt from customs duties:

Goods carried across the border for

representative offices of foreign states

and their employees;

Food products and transportation

means, as well as personal

equipment, spare parts, personal

items intended for traveling personnel

imported as aid and distributed as

such in zones of natural disaster;

Goods which are in transit and

intended for third countries;

Personal and household items, as well

as items necessary for employment

activity of foreign migrant workers in

Azerbaijan;

Certain instances of goods imported

in, produced or processed in and

exported from special economic

zones;

Imports of technological equipment

and structures based on so called

“investment promotion certificate”

including for the infrastructure of

industrial parks.

Currently, the standard rate of VAT at 18

percent is applied on importation of the foods

and equipment subject to certain exemptions.

The Customs Code regulates following

customs procedures:

Transit (international and national);

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Warehouse (temporary storage and

customs warehouse);

Free zone;

Special use (temporary import and

end use);

Processing (internally and abroad).

“Single Window”

According to Presidential Decree No 12,

dated 11 November 2008, the “Single

Window” system was implemented. Under

this system, the inspection of veterinary,

sanitary, phytosanitary, hygienic and other

certification is carried out by the customs

authorities at the customs border.

CLS provides its clients with business

consulting services as well as expert advice

on a full spectrum of customs law, procedures

and regulations, including the obtainment of

the necessary certificates from the authorized

authorities.

Real estate & Property ownership

Real estate is highly popular, growing and

developing industry in Azerbaijan. Despite

the fall of prices on oil, the construction of

residential and non-residential buildings is

continuing at the high speed. The increasing

population and international investments are

the main catalyst for such a growth. There

are many infrastructure projects relating to

real estate. Furthermore, many foreign and

local investors continue to invest into real

estate in Azerbaijan as well.

There is a Constitutional guaranty that no

person may be deprived of property

without a decision of the court and fair

compensation.

Every owner of a property has the right to

possess, use and dispose of such property

freely.

The Civil Code provides information for

tangible and intangible property and for

movable and immovable property.

In accordance to the Land Code of the

Republic of Azerbaijan, foreign persons,

(including physical persons, legal entities,

international organizations and foreign states)

cannot own land, though they do have the

right to lease land. Azerbaijani citizens and

entities, including entities with foreign

participation, may freely own, use or lease

land.

Ownership and other rights with regard to

immovable property must be state registered.

A right to possess and use immovable

property arises as soon as a sale and

purchase agreement is notarized. Currently,

the registration is carried out by the State

Registry Service of Immovable Property

(“Registry Service”).

Some of the services provided by the Registry

Service are also performed by the State

Agency for Public Service and Social

Innovations under the President of Azerbaijan

(“ASAN”), which was established by Decree

No 685 of the President of Azerbaijan, dated

13 July 2012.

CLS provides its clients with business

consulting services as well as expert advice

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on a full spectrum of real estate and

construction industry.

Employment

The Labor Code of the Republic of Azerbaijan

(“Labor Code”) regulates employment and

labor matter in Azerbaijan. Under the Labor

Code in order to engage individuals in

provision of any works (services) there must

be concluded an employment contract. An

employment contract becomes valid after its

registration in the electronic information of the

Ministry of Labor and Social Protection of the

Population of the Republic of Azerbaijan.

After registration in the system, an electronic

confirmation of registration is sent to the

employer.

The Labor Code states certain provisions

which must be set forth in an employment

contract.

An individual employment contract may be

concluded for either an indefinite period or a

fixed period up to five years. According to the

Labor Code if the term of fixed-term

employment contract lasts for more than five

years, it will be deemed to be an indefinite

term contract.

According to the Labor Code there is a

probationary period which cannot exceed

three months. The probationary period is not

covered on some categories according to the

Labor Code. In Azerbaijan a five-day working

week is the norm. The normal working day

should not exceed eight hours where the

working week is 40 hours.

There are four types of leave: leave/vacation

(basic and supplementary), social leave

(which includes maternity leave), study leave

and unpaid leave. The basic employment-

related leave is 21 calendar days, for certain

positions 30 calendar days.

An employment contract may be terminated

on the following general grounds: termination

by initiative of an employee or employer,

expiration of an employment contract’s fixed

term, change of employment conditions,

change of owner, and so on.

Foreigners and stateless persons must have

work permit prior to concluding an

employment contract. Some categories are

exempted from work permit requirements, for

example, heads and deputy heads of

branches and representative offices of foreign

legal entities, people visiting Azerbaijan on

business trip for up to 90 cumulative days,

etc. Work permits are issued by the State

Migration Services of the Republic of

Azerbaijan.

CLS advises its clients on a full spectrum of

Employment and Migration Law related

issues, including obtaining of work permits.

Currency regulation

Azerbaijani currency is Azerbaijani manat

(AZN). It is prohibited to use other monetary

units as a means of payment on the territory

of Azerbaijan subject to certain exemptions.

The FMSA, the Central Bank and the State

Customs Committee of the Republic of

Azerbaijan regulate the currency operations.

There are some rules for residents and non-

residents regarding their currency operations.

According to Regulations of the Central Bank

No.16/1 dated 03 March 2016 residents and

non-residents can take out foreign currency

not exceeding the equivalent of USD 10,000

by the form of an oral declaration to the

custom authority.

Moreover, Resident and non-resident

individuals and legal entities may take out of

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the Republic of Azerbaijan from USD 10.000

up to USD 50.000 equivalent foreign currency

in cash upon submission of customs

documents confirming its previous import into

the Republic of Azerbaijan in cash and a

written customs declaration to customs

authorities.

Licensing & Permits

The system of licensing and permits is

simplified in Azerbaijan.

For the past years, the licensing and permits

system have been improved and brought in

line with international standards. In an effort

to improve the investment climate a number

of legislative acts were adopted regarding the

licensing regime. They are following:

Law “On Licenses and Permits”, dated

15 March 2016, which is in force form

1 June 2016;

Decree No.176-VQ of the President of

Azerbaijan, dated 20 April 2016 ”On

the Implementation of the Law on

Licenses and Permits”;

Decree No 174 of the Cabinet of

Ministers of Azerbaijan, dated 7

November 2002 “On Additional

Conditions for Granting Special

Permissions (Licenses) for Certain

Types of Activities”;

Decree No 713 of the President of

Azerbaijan, dated 21 December 2015

“On Certain Actions in the Area of

Licensing”.

The Law “On Licenses and Permits” sets out

criteria for types of activities requiring licenses

and permits and an exhaustive list of licenses

and permits. The Ministry of Economy of the

Republic of Azerbaijan and ASAN provide

general control and administration over

licensing procedures.

According to the Law “On Licenses and

Permits”, the issuance of licenses and

permits, duplicates of such licenses and

permits and amendments thereto, and the re-

issuance, suspension, resumption and

cancellation of licenses and permits must be

made through an Electronic Licenses and

Permits Portal. This Portal is a single registry

for licenses and permits.

According to the Law “On Licenses and

Permits” there are three annexes regarding

the activities, which require a license:

A list of activities which requires a

license;

A list of activities related to cases of

national security which require a

license;

A list of permits to be issued for

entrepreneurial activity.

According to the Law “On Licenses and

Permits” a “permit” is an official document

(permit, approval, certification, certificate,

accreditation) granted by the authority

responsible for issuing the permit for the

purpose of the fulfillment of the relevant

entrepreneurial activities or certain actions in

connection with the implementation of

entrepreneurial activities.

CLS advises its clients on the legal

requirements for licensed activities and

assisted in the procurement and renewal of

the relevant licenses and permits.

Intellectual Property

Azerbaijan has acceded to a number of

conventions designed to protect intellectual

property rights, and the successful

enforcement of rights is often possible.

The basic laws regulating intellectual property

in Azerbaijan are:

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Law ”On Copyright and Related

Rights”, dated October 8, 1996;

Law “On Patents”, dated June 10,

1997;

Law “On Trademarks and Geographic

Names”, dated June 12, 1998.

Azerbaijan has ratified a number of important

international conventions in intellectual

property area, including:

The Berne Convention for the

Protection of Literary and Artistic

Works, 1886;

The Paris Convention for the

Protection of Industrial Property, 1883;

The Madrid Agreement Concerning

the International Registration of

Marks, 1892;

The Protocol to the Madrid Agreement

Concerning the International

Registration of Marks, 1989;

The Patent Cooperation Treaty, 1970;

The Eurasian Patent Convention,

1995.

CLS advises its clients with business

consulting services as well as expert advice

on a full spectrum of Intellectual property,

including defending trademarks and patents

in the courts and before the Patent

Committee.

Energy, Oil and Gas

Oil and gas are the exclusive property of

Azerbaijan. Hydrocarbons are the main

economic lifeblood of Azerbaijan past,

present and future. Azerbaijan’s high level

economic growth has been attributed to large

and growing oil and gas exports. Azerbaijan

has a lot of onshore and off-shore oil and gas

fields.

The well-developed and key oil production

platform in Azerbaijan is Azeri-Chirag-

Guneshli oilfield serving.

The basic economic driver for oil industry

involves export through the:

Baku-Tbilisi-Ceyhan Pipeline (BTC):

The Main Export Pipeline (MEP) was

designed to be the key route for

exporting Azerbaijani oil to European

markets;

Baku-Novorossiysk Pipeline: The

Northern route pipeline runs from the

Sangachal terminal south of Baku to

the Russian Black Sea port

Novorossiysk;

Baku-Supsa Pipeline: the Western

route runs from the Sangachal

terminal to the Supsa terminal on

Georgia’s Black Sea coast.

Efforts to boost Azerbaijan’s gas production

are underway. The geopolitically important

Southern Gas Corridor (“Trans Adriatic

Pipeline”) between Azerbaijan and Europe is

expected to open in near future.

The Shah Deniz project is one of the world’s

largest gas-condensate fields operated by

international oil and gas companies such as

BP.

Exploration, development and production of

hydrocarbons are done through the PSAs

concluded between major oil companies and

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Azerbaijan. The exploitation term is divided

into development and production periods. All

major oil and gas projects to date have been

undertaken on the basis of PSAs.

Petrochemical industry is also widely

developing in Azerbaijan. Currently, SOCAR

Polymer's Petrochemical complex is being

constructed at the Sumgait Chemical

Industrial Park, Integrating a high-density

polyethylene plant and a polypropylene plant,

the petrochemical project is being developed

by SOCAR Polymer, a joint venture created in

July 2013.

CLS provides the clients with business

consulting services as well as expert advice

on a full spectrum of energy, oil, gas and

petrochemical projects.

IT &Telecommunications Industry

The infrastructure of Communication services

in Azerbaijan is well developed and covers

about 99% of the country. Today Azerbaijan

has several large operators: Azercell, Bakcell,

Azerfon.

Almost 70% Internet users exist in the

country. Fibre Optic Broadband, which is

currently being implemented, will cover

approximately 60% of the country’s internet

market by 2017. In early 2013, Azerbaijan

launched its first telecommunications satellite

into orbit. The Azerspace-1 satellite was set

to provide digital broadcasting, internet

access and data transmission for Azerbaijan,

Central Asia, Europe and Africa.

IT industry is a successful ground for foreign

investors.

Telecommunications is an area of great

potential growth in Azerbaijan. The Law on

Telecommunication and the Law on

Television and Radio are the main legislative

act regulating the industry. The Ministry of

Economy is the agency authorized to issue

licenses for express courier services and

specific types of telecommunications services

including provision of fixed line telephone

communication services, cellular (mobile)

telephone communication services, radio-

trunk and wireless communication services,

administration of local and international

telecommunication channels, IP-telephony

communication services.

The Ministry of Communications and High

Technologies is national regulatory authority

in the area of telecommunications.

The Azerbaijani legislation recognizes the

right of foreign individuals and legal entities to

own and operate networks and devices in

Azerbaijan. Such devices must be jointly

certified by the Ministry of Communications

and the State Committee for Standardization,

Metrology and Patents and their subordinate

bodies, as well as by accredited test

laboratories.

There are a number of cable TV providers

and independent TV and radio channels

currently operating in Azerbaijan. The

provision of Internet services and

communication at affordable prices has been

developing at a rapid pace.

Azerbaijan is connected to the Trans-Asia-

Europe fiber-optic cable providing

international connectivity to the rest of the

World.

CLS has professional experts, who can

advise, help and guide you to find the optimal

ways for investments in IT and

telecommunications industry.

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Agriculture

Azerbaijan is one of the region’s strongest

agricultural centers.

The country’s climatic and ecological diversity

allows for differentiation in crop cultivation.

Cotton, grapes, fruit, nuts, vegetables,

tobacco, including cattle farming, etc. are the

leading types of agriculture in Azerbaijan.

Furthermore, government also officially

implements state support programs of the

agribusiness development in the country.

Finally, agricultural activities are exempt from

all taxes.

The followings are the main reasons of

developing the agriculture in Azerbaijan:

Productive lands;

Various climatic zones;

Cheap labor force;

Good educational base in agricultural

industry.

Taking into account the above mentioned

information, investment in agriculture is

increasing day to day.

CLS has the expert group which can help you

to realize profitable investment in our region.

We can advise you on all aspects of

agribusiness development.

Tourism

The uniqueness of Azerbaijan as a touristic

attraction is its natural location in nine out of

11 climatic zones, which creates different

landscapes with own climate, flora and fauna.

The reason of the cultural diversity of

Azerbaijan is foreign intervention by different

nations. Azerbaijan is mix of east and west,

mix of Islam, ancient Caucasian culture and

elements of European culture. This diversity

is attracting foreign investors and tourists.

Therefore it has created the need in opening

new hotels, restaurants, business centers etc.

A number of popular hotels are opened in

Azerbaijan, such as: Four Seasons, Fairmont,

Kempinski, JW Marriott, Hilton, Jumeirah,

Holiday Inn, Park Inn. This fact offers

opportunities in tourism sector for investors

from all over the world.

The country’s nine climatic zones offer the

potential for developing mountain ski resorts,

beach resorts, and mineral baths and special

unique medicinal health spas, like resort in

Naphtalan, which offers treatments using

indigenous therapeutic oil.

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European Olympic Games 1015 and Formula

One 2016 in Azerbaijan played an important

role in tourism sector of Azerbaijan.

CLS provides the clients with business

consulting services as well as expert advice

on a full spectrum of tourism sector. Our

professional team is ready to accept all your

offerings and help you to develop your ideas

regarding investment in tourism sector.

Transportation

Railway transportation / Marine

transportation

Azerbaijan is located on the Great Silk Road

and junction of Europe and Asia. Taking into

account this location, transportation via

different types of transport in Azerbaijan is

very attractive and cheap. The most popular

types of transportation are railway and marine

transportations.

Rail transport in Azerbaijan is operated by the

national state-owned railway company -

Azerbaijan Railways.

One of the most popular railways is Kars-

Tbilisi-Baku railway, and number of

companies invests to the developing of this

international railway project. In freight traffic,

the exportation of oil from the oil wells from

Baku at the Caspian Sea to the Georgian port

of Batumi at the Black Sea, forms an

important share of the rail transport in

Azerbaijan. The freight market share of the

railways is also expected to rise rapidly with

completion of the Kars–Tbilisi–Baku

international railway project.

Sea and water cargo transportation have vital

importance for Azerbaijan, especially in

regions where road and rail connections are

disputed. Marine transportation is the

cheapest form of transportation in Azerbaijan

since this country has direct maritime

connections with other Caspian littoral states

(Iran, Kazakhstan, Russia, and

Turkmenistan).

Baku International Marine Trade Port is the

largest port on the Caspian Sea. The Baku

port was built in 1902 and has since been the

largest and busiest port of the Caspian Sea.

The port operates non-stop and is an

important transit point in Europe-Asia trade.

Development of transportation system in

Azerbaijan is increasing rapidly. Foreign

companies and investors express strong

interest in Azerbaijani railway and marine

modes of transportation.

16

We provide our clients with business

consulting services as well as expert advice

on a full spectrum of transportation and

maritime law.

Industry

The industry is one of the most developed

areas in Azerbaijan. It covers fuel and

energy, chemistry, mechanical engineering,

metallurgy, food industry, light industry and

other areas.

The largest Metallurgy plants in the private

sector in Azerbaijan are “Baku Steel

Company” and “Baku Steel Casting” JSC,

Azerpipe JSC, Azeraluminum JSC.

Several types of metals (aluminum, lead, zinc,

cobalt, copper, mercury, silver and gold) have

been discovered and mined for quite some

time in Azerbaijan.

During the past decades this area has

become more highly developed resulting in

the creation and development of a metallurgic

industry in Azerbaijan.

The raw material, alunite, is mined from fields

in the Dashkesan region. At a plant in Ganja,

the alunite is converted to alumina.

Ferrous metallurgy in Azerbaijan is quite

developed too.

In Dashkesan, there is a plant which

processes iron ore which contain about 60

percent iron.

In Sumgayit, there is a tube producing plant,

the largest of its kind in Azerbaijan and the

Caucasus region. A new industry is emerging

related to precious metals, including gold.

Fast-moving consumer goods (“FMCG”) have

developed in Azerbaijan for the last years.

Silk industry is a traditional area in

Azerbaijan. Silk and cotton historically have

been carried out from Azerbaijan to European

markets on the Great Silk Road.

Automotive industry is also popular in

Azerbaijan.

In Baku car plant cargo and passenger motor

vehicles are manufactured. In Ganja

automobile plant Oka cars and Belarus

tractors are manufactured. Nakhchivan

Automobile Plant better known as NAZ is an

automobile manufacturer in the Nakhchivan

Autonomous Republic of Azerbaijan.

Considering the above mentioned facts, the

foreign investors might generate interest in

this industry sector of Azerbaijan.

CLS has strong expertise and provides the

clients with business consulting services as

well as expert advice on a full spectrum of

various industries.

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