Company registration in Free Economic Zone
of Azerbaijan
- Emil Khudiyev (Lawyer)
- No Comments
Free economic zones (FEZ) are specially designated territories with special economic and legal conditions designed to stimulate business activity, attract foreign investment and promote the development of the national economy.
In many countries around the world, such zones have become an important tool for accelerated economic growth, allowing companies to operate in a more comfortable and profitable environment due to tax incentives, simplified administrative procedures and developed infrastructure. In Azerbaijan, the concept of free economic zones began to actively develop relatively recently, but today we can already see significant progress in their formation.
One of the most developed and popular free zones is the Alat Free Economic Zone, which provides entrepreneurs and investors with favorable conditions for doing business.
Registering a company in the FEZ allows entrepreneurs to receive the benefits of a free market, reduce the tax burden and expand international cooperation. In this article, we will examine in detail how to register a company in the FEZ, what advantages doing business in this zone provides and what investors need to know.
Step-by-step guide for business setup in AFEZ
Main steps of company registration in the Free Economic Zone:
- Choosing the type of company
In the free economic zones of Azerbaijan, you can register various forms of companies depending on the goals of the business:
- Limited Liability Company (LLC) is the most common format, suitable for small and medium businesses.
- Open and Closed Joint-Stock Company (OJSC, CJSC) is a less common, but more complex form of company, which involves more complex company management and decision-making.
- Branch/Representative office of a foreign company – intended for international enterprises planning to operate in Azerbaijan.
- Private entrepreneurship – used less often, but may be suitable for small projects.
- Preparation of documents
To register a company in the FEZ, you must prepare the following package of documents:
- Company Charter;
- Passport details of the founders;
- Registration documents of the foreign company (if necessary);
- Confirmation of the legal address;
- Business plan and description of activities.
- Submitting an application to the AFEZ governing body
After preparing the documents, you must submit an application to the relevant governing body of the free economic zone. Depending on the specific FEZ, the review process can take from several days to several weeks.
- Obtaining licenses and permits
Some types of business require additional permits and licenses (for example, manufacturing, logistics, financial services). The FEZ governing body provides consultations and assistance in obtaining them. - Opening a bank account
After successful registration, you must open a corporate account in one of the banks in Azerbaijan. The FEZ has simplified procedures for working with financial institutions, including international banks.
- Start of operations
After completing all formalities, the company receives the right to conduct commercial activities, enter into contracts, hire employees and enjoy all the benefits of the free economic zone.
Benefits of registration in AFEZ
Free economic zones in Azerbaijan are actively developing and now one of the key platforms for FZ business has become the Alat FEZ. This zone was created as part of the strategy to attract foreign investment and develop the non-resource sector of the economy. Due to its favorable geographical location, advanced conditions for doing business and government support, the Alat FEZ is rapidly gaining popularity among entrepreneurs, offering them unique opportunities for growth.
Company formation in the Alat Free Economic Zone goes through 4 main steps:
- Submission of a request form;
- Meeting with AFEZ and presentation of a business plan;
- Detailed project assessment and approval;
- Company registration, licensing, start of operations.
AFEZ has also created a “One-Stop Shop” where you can register a company, obtain licenses, visas, permits and certificates without the participation of other government agencies.
Business set up in the Alat Free Economic Zone (AFEZ) provides the following benefits both for local and international entrepreneurs:
- Tax incentives in the Alat FEZ
Companies registered in the AFEZ are exempt from a number of taxes, including:
- Income tax – 0%;
- Value Added Tax (VAT) – 0%;
- Customs duties – 0% on imported equipment and raw materials;
- Property and land taxes – 0%;
With these incentives, companies can reduce operating costs and increase profits.
- Access to the international market
AFEZ is an important logistics hub located near the port of Baku, railway lines and the airport. Thanks to this, companies receive:
– The ability to export products duty-free;
– Access to European, Asian and Middle Eastern markets;
– Simplified customs procedures.
- Developed infrastructure
All conditions for business have been created in the Alat Free Economic Zone:Modern warehouse and production facilities
- Developed transport network
- Customs terminals
- Office centers and platforms for startups
- 100% foreign ownership of business
Unlike many countries, in Azerbaijan foreign entrepreneurs can own 100% of a company’s shares without involving local partners.
- Legal regulation
AFEZ has its own legislation, which takes precedence over the basic economy. Companies operate according to international standards, and disputes are considered by independent arbitration bodies of AFEZ. The Law “On the Alat Free Economic Zone” determines the legal status of AFEZ.
- Free movement of capital
AFEZ does not impose restrictions on foreign exchange transactions and the transfer of profits abroad.
- Simple registration
Registration of a company in the Free Economic Zone is simplified compared to the usual procedure in Azerbaijan. A minimum package of documents and fast processing of applications make the process convenient for investors.
- Duty-free export
Goods produced in AFEZ can be exported to 10 CIS countries without any customs duties: Russia, Georgia, Ukraine, Moldova, Belarus, Kazakhstan, Uzbekistan, Kyrgyzstan, Turkmenistan, Tajikistan.
- Government support
Assistance in finding personnel, suppliers and partners, as well as flexible regulation in matters of labor law, currency transactions and intellectual property.
What industries are profitable to develop in the AFEZ?
Due to the preferential conditions and developed infrastructure, it is profitable to develop the following types of business in the AFEZ:
- Logistics and transport – due to the proximity to the international port and railway.
- Production and export – the possibility of duty-free export of products.
- IT companies and startups – flexible regulation and tax incentives.
- Financial and consulting services – favorable conditions for international investors.
- Processing industry – access to raw materials and favorable tax conditions.
Registering a company in the AFEZ is a profitable solution for entrepreneurs seeking to develop their business on preferential terms in a region with favorable conditions and growth prospects. A simple registration procedure, no taxes and a strategic location make AFEZ an attractive platform for starting and developing a business.
FAQ
What documents are required to register a company in the Free Zone?
Main documents: charter, founders’ details, registration application, business plan (if necessary).
Can a foreigner register a company in the Free Zone?
Yes, 100% foreign ownership is allowed and the registration process is the same for both local and foreign investors.
How long does it take to register a company in the Free Zone?
Процесс занимает от 3 до 10 рабочих дней, в зависимости от типа бизнеса и сложности документов.
Is it possible to register an "online company" in the Alat Free Economic Zone?
IT companies and service businesses can register and operate entirely online. Also, some stages of registration of companies in other industries can be completed online by contacting official representatives of AFEZ, but personal presence or a representative in Azerbaijan will be required to submit documents.
Which industries are most profitable for business in the Alyat SEZ?
Logistics, manufacturing, export-import operations, IT companies, financial services and processing industry.
Is it possible to obtain a residence peremit after registering a company?
Yes, according to the legislation of Azerbaijan, owners of registered companies can apply for a temporary residence or permanent residency in Azerbaijan.
Do I need to obtain additional licenses after registration?
Some types of business (financial services, logistics, manufacturing) may require special permits, which are issued separately.
Is it possible to open a branch of a foreign company in the Free Economic Zone?
Yes, branches of foreign companies can register in the AFEZ under the same conditions as local companies.
How EMZE can help you?
Clients refer to us to register a company in Azerbaijan with full legal support, including legal address (virtual office) service and bank accounts opening.
You can find other legal services in this field in “My Services” section.
Want to open a company in Azerbaijan? Just Call Emil!
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