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Doing Business in Azerbaijan k u . o c . e d i u G Twilight view of Baku's bay s s e n i s u B g n i o D . n a j i a b r e z A . w w www.Azerbaijan.DoingBusinessGuide.co.uk w Visit the Website and download the free Mobile App SUPPORTED BY: Who W ƐƚĂďůŝƐŚĞĚŝŶ ϭϵϵϲ͕ ZĂƉ grown over the years to become a g ƉƌŽǀŝĚĞƌŽĨ ĞůĞĐƚƌŝĐĂů͕ ŝŶƐƚƌƵŵĞŶƚĂƟŽŶ͕ ŚLJĚƌĂƵůŝĐ͕ ŵĞĐŚĂŶŝĐĂů͕ƚĞůĞĐŽŵŵƵŶŝĐĂƟŽŶ ĂŶĚ ƚĞĐŚŶŝĐĂů OurOur Core Values ƐĞƌǀŝĐĞƐĂŶĚ ƚƌĂŝŶŝŶŐ͘ tĞ ŽīĞīĞƌ ƐĞƌǀŝĐĞƐ ƚŽ ƚŚĞ Kŝů & Gas, Petrochemical, Hospitalityy,, Agricultural, ZĂƉŝĚ^ŽůƵƟŽŶƐ͛ ĐŽƌĞ ǀĂůƵĞƐ ƉƌŽǀŝĚĞ ŽŶƐƚƌƵĐƟŽŶ͕DĂƌŝƟŵĞ ĂŶĚ dĞdĞůĞĐŽŵŵƵŶŝĐĂƟŽŶƐ ŐƵŝĚŝŶŐƉƌŝŶĐŝƉůĞƐ ƚŽ ĞŵƉůŽLJĞĞƐ ĂŶĚ ŚĞůƉƐ industries. ĚŝīĞƌĞŶƟĂƚĞŽƵƌ ďƵƐŝŶĞƐƐ͘ KǀĞƌƚŚĞ ƉĂƐƚ ƚǁŽ ĚĞĐĂĚĞƐ͕ ǁĞ ŚĂǀĞ Health, Safety & Environment ƐƵĐĐĞƐƐĨƵůůLJĐŽŵƉůĞƚĞĚ ŶƵŵĞƌŽƵƐ ŵŽĚŝĮĐĂƟŽŶ tĞŵĂŬĞ ƐƵƌĞ ǁĞ ƉƌŽƚĞĐƚ ƚŚĞ ŚĞĂůƚŚ ĂŶĚ ĂŶĚƵƉŐƌĂĚĞ ƉƌŽũĞĐƚƐ͕ ƵƟůŝƐŝŶŐ ŵƵůƟĚŝƐĐŝƉůŝŶĞ ƐĂĨĞƚLJŽĨ ĞǀĞƌLJŽŶĞ͕ ĂŶĚ ƉƌĞǀĞŶƟŶŐ ŚĂƌŵ ƚŽ ƚŚĞ engineering teams to deliver these projects safelyfely ĞŶǀŝƌŽŶŵĞŶƚŝƐ ŽƵƌ ĐŽŵŵŝƚŵĞŶƚ͘ in challenging environments all over the world. dŚŝƐŝŶĐůƵĚĞƐ ƚŚĞ ĂƐƉŝĂŶ ƌĞŐŝŽŶ͕ ĞŶƚƌĂů ƐŝĂ͕ YƵĂůŝƚLJΘ /ŶŶŽǀĂƟŽŶ ƵƌŽƉĞ͕ƚŚĞ DŝĚĚůĞ ĂƐƚ͕ ĨƌŝĐĂ͕ ĂŶĚ ƚŚĞ &Ăƌ ĂƐƚ͘ tĞƐĞĞŬ ǀĂůƵĞ ĂĚĚŝŶŐ ƐŽůƵƟŽŶƐ ĂŶĚ ƐƚƌŝǀĞ ƚŽ ĮŶĚǁĂLJƐ ƚŽ ĞdžĐĞĞĚ ŽƵƌ ĐƵƐƚŽŵĞƌ͛Ɛ What We Do ĞdžƉĞĐƚĂƟŽŶƐ͘ &ƌŽŵĞŶŐŝŶĞĞƌŝŶŐ ĂŶĚ ĚĞƐŝŐŶ ƚŽ ŝŶƐƚĂůůĂƟŽŶ TTeameam SSpirit and maintenance, we provide a range of ZĞƐƉĞĐƟŶŐ͕ƐƵƉƉŽƌƟŶŐ ĂŶĚ ĐŽůůĂďŽƌĂƟŶŐ ǁŝƚŚ ƐƉĞĐŝĂůŝƐƚƐĞƌǀŝĐĞƐ ƵƟůŝƐŝŶŐ ŽƵƌ ƚĞĐŚŶŝĐĂů ĞdžƉĞƌƟƐĞ͕ ĞĂĐŚŽƚŚĞƌ ŝƐ ŚŽǁ ǁĞ ŐĞŶĞƌĂƚĞ ŐƌĞĂƚĞƌ ǀĂůƵĞ advanced technology andd close partnerrshipships with ĂŶĚĂĐŚŝĞǀĞ ŵƵƚƵĂů ƐƵĐĐĞƐƐ͘ KƌŝŐŝŶĂůƋƵŝƉŵĞŶƚ DĂŶƵĨĂĐƚƵƌĞƌƐ ;KDƐͿ͘ KƵƌ ƐĞƌǀŝĐĞƉŽƌƞŽƞŽůŝŽ ĐŽǀĞƌƐƌƐ ƚŚĞ ĨŽĨŽůůŽǁŝŶŐ ĚŝƐĐŝƉůŝŶĞƐ RapidRapid Response and areas: tĞĂƌĞ ZĂƉŝĚ ^ŽůƵƟŽŶƐ ĂŶĚ ǁĞ ŽƉĞƌĂƚĞ ǁŝƚŚ Ă ƐĞŶƐĞŽĨ ƵƌŐĞŶĐLJ͘ ͻŶŐŝŶĞĞƌŝŶŐ ĞƐŝŐŶ ^ŽůƵƟŽŶƐ ͻůĞĐƚƌŝĐĂů Θ /ŶƐƚƌƵŵĞŶƚĂƟŽŶ ^ĞƌǀŝĐĞƐ Integrity ͻ/d Θ dĞdĞůĞĐŽŵŵƵŶŝĐĂƟŽŶ ^ĞƌǀŝĐĞƐ dŚĞĐƌƵdž ŽĨ ŽƵƌ ƌĞƉƵƚĂƟŽŶ ŝƐ ĚŽŝŶŐ ǁŚĂƚ ǁĞ ƐĂLJ ͻ&ůƵŝĚ WŽǁĞƌ ^ĞƌǀŝĐĞƐ ĂŶĚĐŽŶĚƵĐƟŶŐ ŽƵƌƐĞůǀĞƐ ĞƚŚŝĐĂůůLJ͘ • Building Services ͻWƌĞƐĞƌǀĂƟŽŶ ^ĞƌǀŝĐĞƐ Resultesult Focused • DŽƚŽƌ͕ƌ͕sĂůǀĞ Θ WƵŵƉ ZĞƉĂŝƌ ^ĞƌǀŝĐĞƐ tĞĨŽĐƵƐ ŽŶ ƌĞƐƵůƚƐ͘ dŚŝƐ ŵĞĂŶƐ ĂůǁĂLJƐ • Pipeline Services ƵŶĚĞƌƐƚĂŶĚŝŶŐŽƵƌ ŐŽĂůƐ ĂŶĚ ƉůĂĐŝŶŐ ĞīŽƌƚƐ ƚŽ ͻ&ŝƌĞ ^ĂĨĞƚLJ Θ ƵƚŽŵĂƟŽŶ ŵĞĞƚƚŚĞŵ͘ • ^ƵƉƉůLJŚĂŝŶ DĂŶĂŐĞŵĞŶƚ ^ĞƌǀŝĐĞƐ ͻŽŵƉdž ĂŶĚ dĞdĞĐŚŶŝĐĂů dƌĂŝŶŝŶŐ &ŽƌŵŽƌĞ ŝŶĨŽƌŵĂƟŽŶ ǀŝƐŝƚ ŽƵƌ ǁĞďƐŝƚĞ͗ ǁǁǁ͘ƌĂƉŝĚͲƐŽůƵƟŽŶƐ͘ŶĞƚ CONTENTS 8 Azerbaijan overview 10 Welcome from Lesley Batchelor OBE, FIEx (Grad) – Director General, Institute of Export & International Trade 11 Foreword from James Sharp, HM Ambassador to Azerbaijan 14 Introduction from John Patterson OBE, Chairman of the British Business Group Azerbaijan 24 Why Azerbaijan? 16 About the Department for International Trade (DIT) 18 About UK Export Finance (UKEF) 22 About this Guide 2 24 24 Why Azerbaijan? Why Azerbaijan? 25 • Summary 26 • Geography • Political situation 28 • Economic overview 29 • UK and Azerbaijan trade 34 Help available for you 36 • Support from the British Business Group Azerbaijan (BBG) • Support from the UK Department for International Trade (DIT) 39 • Support from the Institute of Export & International Trade (IOE&IT) 42 Getting here and advice about your stay 43 • Entry requirements • Money • Local laws and customs 44 • Safety and security 46 • Health 48 Sector–specific opportunities 49 • Research • Government tenders • Education 50 • Energy • Financial and professional services 51 • Global sports 52 • Information and communications technology (ICT) • Infrastructure • Retail 3 CONTENTS 56 Preparing to export 34 57 • Consultation and bespoke research 58 • Start-up considerations 59 • Other forms of business 60 • Financial considerations 62 How to do business in Azerbaijan 63 • Legal considerations 42 64 • Taxation 66 • Customs and documentation 68 • Shipping your goods 70 Business etiquette, language & culture 71 • Dress • Meeting and greeting 72 • Language 48 78 What are the challenges? 80 • Challenges and risks when doing business in Azerbaijan • Business and human rights 56 62 70 www.Azerbaijan.DoingBusinessGuide.co.uk 4 REACH THOUSANDS OF POTENTIAL CUSTOMERS WORLD TRADE MATTERS Reach our readership of thousands of exporters and decision-makers with a one-page ad in World Trade Matters. Readership: Senior decision-makers in UK government and international trade agencies. Our membership of thousands of exporters. The broader UK export community at summits and exhibitions. 20% DISCOUNT FOR MEMBERS To be seen by our readership as a leader in international trade, please contact [email protected] for more information World Trade Matters brings together thought leadership and updates from across the world of international trade. This high quality journal sits on the coffee tables and desks of key decision makers in exporting businesses and governments around the world. CONTENTS 84 Resources 84 Resources 91 Supporting organisations contact details 85 What does membership of the Institute of Export & 94 Market experts contact details International Trade mean? 96 Trade shows 87 Focusing on qualifications. Lesley Batchelor OBE, FIEx 97 Useful links (Grad) – Director General, Institute of Export & 103 Map of Azerbaijan International Trade 106 Quick facts b s 89 The British Embassy Baku e t SUPPORTING ORGANISATIONS e . E + 0 6 Enter the Open to Export Action Plan Competition for the chance to win £3,000 cash and further support towards your plans for international growth . Complete your plan using our online planning tool. Who are Open to Export? We are the free online information A comprehensive webinar Quarterly competitions for the service from The Institute of Export programme covering all aspects chance to win £3,000 cash and & International Trade dedicated of international trade further support to helping SMEs through our: The online Export Action Plan Step-by-step guides covering tool helping businesses create a Plan to win - start your Export the whole export journey from roadmap to successful new markets Action Plan today ‘Selecting a market’ to ‘Delivery and documentation’ Powered By Register for free on www.opentoexport.com to start your plan and enter the competition Azerbaijan overview The Republic of Azerbaijan is located on the southern edge of the Caucasus Mountains in Transcaucasia, and borders Iran to the south, Armenia to the west, Georgia to the northwest, Russia to the north and the Caspian Sea to the east. Azerbaijan’s economy expanded in the first half of 2018, with revived output in the services sector due to improved terms of trade. Azerbaijan’s economic performance should strengthen, helped by natural gas exports and a moderate acceleration in domestic demand. If the oil price is maintained, the current account surplus is projected to average at 10% of the GDP until 2020. Non-oil sector growth is expected to average at 2.7% due to rising market confidence, which will allow improvements in the banking sector and a gradual recovery in investment, with inflation remaining below 3%. The UK is the single largest investor in Azerbaijan and UK companies are well placed to increase business. There are currently more than 450 UK companies doing business in Azerbaijan. In addition to oil and gas, UK companies have been successful in areas such as construction management and design, retail and education. MARKET EXPERTS Thank you to our Market Experts 8 ďƌŝŶŐƐĞĸĐŝĞŶĐLJƚŽůŽŐŝƐƟĐƐŝŶďƌŝŶŐƐĞĸĐŝĞŶĐLJ ƚŽ ůŽŐŝƐƟĐƐ ŝĞŶ ŽŶĞŽƚŶ ŽĨƚŚĞǁŽƌůĚΖƐĨĂƐƚĞƐƚŽĨƚŚĞ ǁŽƌůĚΖƐ ĨĂƐƚĞƐƚ ĚĚĞǀĞůŽƉŝŶŐĞǀĞůŽƉŝŶŐƌ ƌĞŐŝŽŶƐĞŐŝŽŶƐ ΘΘ ŵ ŵŽƐƚŽƐƚ ĐŚĂůůĞŶŐŝŶŐĐŚĂůůĞŶŐŝŶŐ ĞŶǀŝƌŽŶŵĞŶƚƐ͕ĞŶǀŝƌŽŶŵĞŶƚƐ͕ ŽīĞƌŝŶŐŽīĞƌŝŶŐ ƵŶŵĂƚĐŚĞĚƵŶŵĂƚĐŚĞĚƉ ƉĞƌƐŽŶĂůĞƌƐŽŶĂů ƐĞƌǀŝĐĞ͕ƐĞƌǀŝĐĞ͕ ĂĂ ŐůŽďĂůŐůŽďĂů ĨŽŽƚƉƌŝŶƚĨŽŽƚƉƌŝŶƚ ĂŶĚĂŶĚ ĐƵƐƚŽŵŝnjĞĚĐƵƐƚŽŵŝnjĞĚ ĐĂƉĂďŝůŝƟĞƐŝŶĚĞǀĞůŽƉĞĚĐŽƵŶƚƌŝĞƐĂŶĚĞŵĞƌŐŝŶŐĞĐŽŶŽŵŝĞƐ͘ĐĂƉĂďŝůŝƟĞƐŝŶ ĚĞǀĞůŽƉĞĚ ĐŽƵŶƚƌŝĞƐ ĂŶĚ ĞŵĞƌŐŝŶŐ ĞĐŽŶŽŵŝĞƐ͘ 6HUYLFHV6HUUYYLFHV $LU5RDG2FHDQ 5DLO7UDQVSRUWDWLRQ$LU5RDGGD 2FHDQ 5DLO 7UDQVSRUWDWLRQ ::DUHKRXVH 'LVWULEXWLRQDUHKRXVH 'LVWULEXWLRQ &&XVWRPV%URNHUDJHXVWRPV%URNHUDJH 33URMHFWV/RJLVWLFVURMHFWV/RJLVWLFV ++RXVHKROG*RRGV3DFNLQJ 7UDQVSRUWDWLRQRXVHKROG*RR GV 3DFNLQJ 7UDQVSRUWDWLRQ 22ႈFH 5HVLGHQFH5HORFDWLRQ 6WRUDJHႈFH 5HVLGHQFH 5HORFDWLRQ 6WRUDJH 33HW7UDQVSRUWDWLRQHW7UDQVSRUWDWLRQ 66XSSO\&KDLQ0DQDJHPHQWXSSO\&KDLQ 0DQDJHPHQW KEddh^͗KEddh^͗ ddĞů͗ĞĞͬů͗ нн;ϵϵϰϭϮͿϱϲϱϭϴϵϬͬϭͬϮͬϯͬϰ;ϵϵϰϭϮͿ ϱϲϱϭϴϵϬͬϭͬϮͬ ϯͬϰ &&Ădž͗ĂĂͿdž͗ нϱн;ϵϵϰϭϮͿ;ϵϵϰϭϮ ϱϱϲϱϭϴϵϱϲϱϭϴϵ ŵĂŝů͗ŵĂŝů͗ RႈFH#DFHFDVSLDQFRPRႈFH#DFHFDVSLDQ FRP ttĞď͗Ğď͗ ZZZDFHFDVSLDQFRPZZZDFHFDVSLDQF RP Welcome from Lesley Batchelor OBE, FIEx (Grad) – Director General, Institute of Export & International Trade This ‘Doing Business in Azerbaijan Guide’ introduces a significant market in the Caucasus with a 10 million-strong population and a government that is keen to diversify its economy. Formed as an independent nation in 1918, and gaining independence from the Soviet Union in 1991, Azerbaijan is neighboured by Georgia, Armenia, Russia and Iran. The country has long benefitted from the strength of its oil and gas industry as well as its close ties to Russia. It is a member of the Commonwealth of Independent States (CIS), though not a member of the CIS free trade area. Ranked 25 th in the World Bank’s ‘Doing Business’ rankings, and with GDP growth for 2019 predicted to be 1.8%, Azerbaijan is increasingly becoming an attractive market in the region for overseas businesses. It is becoming less reliant on trade with Russia, with the EU now representing 48.6% of its overall trade, whilst trade with Turkey is also growing. Though Azerbaijan is not currently one of the UK’s more significant import or export markets, its government’s high