Company registration
Why company registration in Azerbaijan is beneficial?
As a law firm experienced in helping foreign investors, we know the importance of clear guidance when registering a company in a new market. Azerbaijan offers great conditions for starting or expanding a business. Ranked 9th globally in the World Bank’s Doing Business report, it is an attractive spot for entrepreneurs.
Setting up a company in Azerbaijan involves specific legal and regulatory steps. This guide offers a clear overview of registering a company in the Republic of Azerbaijan. We will cover the company setup process and the registration of a JSC in Azerbaijan. Follow these steps to establish your business effectively.
Whether you’re interested in company formation, business registration, or opening a company in Azerbaijan, we ensure a smooth and transparent experience. Our expertise in the company registration process in Azerbaijan will help you overcome challenges and make informed decisions in this dynamic market.
Let us help you capitalize on the opportunities that come with doing business in Azerbaijan.
How to register a company in Azerbaijan?
Choosing the right type of legal entity
The first and most crucial step in establishing a business in Azerbaijan is determining the appropriate type of legal entity. Azerbaijan’s legal framework offers several options, each with specific characteristics defined by law:
- Limited Liability Company (LLC): This is a popular choice among foreign investors due to its flexible structure and limited liability for its shareholders. There is generally no minimum charter capital requirement for LLCs in Azerbaijan, making it accessible for businesses of various sizes.
- Joint-Stock Companies (JSC): Investors can choose between an Open Joint-Stock Company (OJSC) and a Closed Joint-Stock Company (CJSC). The key difference lies in the transferability of shares and the minimum capital requirements. A CJSC requires a minimum charter capital of 2000 AZN, while an OJSC requires 4000 AZN. JSCs are ideal for larger enterprises that may seek to raise capital through public or private share offerings.
- Branches and Representative Offices: Foreign legal entities can also establish a branch or representative office in Azerbaijan. While a branch can engage in entrepreneurial activities, a representative office is limited to representational functions and cannot engage in commercial activities. The choice between a branch and a representative office should align with the specific nature of your business operations.
Licensing and permits
Another critical aspect of establishing a legal entity in Azerbaijan is determining whether your chosen business activity requires a license or permit.
The Azerbaijani government has identified specific activities that require regulatory approval before operations can commence. Engaging in such activities without the necessary licenses or permits is strictly prohibited and can result in legal consequences.
Before launching your business, it is essential to verify whether your operations fall under the categories requiring licensure and to obtain the necessary approvals from the relevant authorities.
Migration considerations for foreign nationals
Foreign nationals intending to establish a business in Azerbaijan must also consider the migration laws. Depending on your role within the legal entity, you may be eligible for a temporary residence permit. The following circumstances allow for obtaining such a permit:
- If you hold the position of head or deputy head of a branch or representative office of a foreign legal entity in Azerbaijan, you are eligible for a temporary residence permit.
- If you are the head of a legal entity established in Azerbaijan with a paid charter capital that meets the threshold set by the relevant executive authority, and at least one of the founders is a foreign legal or natural person, you can obtain a residence permit. This also applies if you own at least 51% of the shares in the legal entity.
Moreover, engaging in paid employment in Azerbaijan also requires a work permit, in addition to the residence permit. Foreign nationals and stateless persons must obtain this permit through their employing legal entity, whether a domestic or foreign firm. Obtaining work permit is another ground for getting temporary residence permit under migration laws. However, certain roles are exempt from the work permit requirement:
- Heads and Deputy Heads of branches and representative offices of foreign legal entities in Azerbaijan.
- Founders of legal entities in Azerbaijan, including foreign individuals or entities holding at least 51% of shares, must meet specific requirements.
- Founders of legal entities registered within the Alat Free Economic Zone.
- Heads and Deputy Heads of legal entities that are residents of a technology park in Azerbaijan.
Conclusion
Starting business activities in Azerbaijan offers numerous opportunities. But it also requires careful planning and adherence to the local legal and regulatory framework. Whether you are considering a limited liability company, a joint-stock company, or a branch office, understanding the requirements and making informed decisions is crucial to your success.
At Accounting.Az Consulting Firm, we specialize in guiding foreign investors through every step of establishing a legal entity in Azerbaijan. From selecting the appropriate legal structure to navigating charter capital requirements, licensing, and migration issues, our experienced team is here to ensure your business is set up for success.
If you are considering expanding your business to Azerbaijan, we invite you to contact us for a consultation.
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