Steps to register as an individual entrepreneur in Azerbaijan

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Starting your own business is a great way to achieve financial independence and personal satisfaction. If you’re ready to take control of your career—whether by freelancing, selling products, or launching a small shop—registering as an individual entrepreneur in Azerbaijan is a simple and clear process. Here’s a detailed guide to help you officially establish your sole proprietorship and begin your business journey.

1. Choose your business type

In Azerbaijan, individual entrepreneurs can register under two tax categories:

Simplified taxpayers: Ideal for small businesses or freelancers with annual earnings below a specified threshold. This system is straightforward, requiring you to pay a fixed percentage of your revenue as tax.
Income taxpayers: Suitable for those whose business income surpasses the simplified tax limit or for individuals who prefer to track expenses and calculate net profit for tax purposes.

2. Prepare required documents

To begin the registration process, you will need:

A copy of your identification document (valid for both citizens and foreign residents)
Proof of your residential address
A completed application form available on the tax service portal

3. Choose your tax system

When registering, you’ll need to select either the simplified tax system or the general tax system. If you’re uncertain about which to choose, consider consulting a tax specialist:

Simplified tax system: Taxes are calculated as a percentage of your total revenue, without deducting expenses.
General tax system: Taxes are based on net income after deducting eligible business expenses, requiring more detailed financial records.

4. Register with tax authorities

To register as an individual entrepreneur, you need to apply through the State Tax Service. You have two options for registration:

Online: Access the e-taxes.gov.az portal using an ASAN signature or an electronic signature.
In-Person: Visit your local tax office with the required documents to receive assistance with the registration process.

5. Get your Tax Identification Number (TIN)

Once your application is submitted, you will be issued a Tax Identification Number, which is crucial for handling tax obligations and setting up a business bank account.

6. Open a bank account

Opening a business bank account is essential for managing your financial transactions. You can do this at any bank in Azerbaijan using your Tax Identification Number (TIN) and ID.

7. Cash register (if needed)

If your business involves cash payments, such as retail sales, you might need to purchase a cash register and comply with fiscal reporting requirements.

8. Get licenses or permits (if necessary)

Additionally, some businesses in Azerbaijan require special licenses or permits, especially those selling certain regulated products. Make sure to check whether your business falls under this category.

9. Start your business

After completing your registration, obtaining your TIN, and setting up a business bank account, you’re all set to begin operations! Make sure to stay on top of your tax obligations by maintaining accurate records of your income and expenses.

10. Submit regular tax reports

As an individual entrepreneur, you are required to submit tax declarations and make timely payments. Utilize the e-taxes portal for online submissions and keep track of filing deadlines to prevent any penalties.

By following these steps, you can successfully register and run your business in Azerbaijan. With proper preparation, you’ll be ready to contribute to the local economy and grow your venture!