Many of us dream of starting our own business, and for many, the only step left is officially registering their company. But what is the process of legally establishing a company in Azerbaijan?
The newspaper “Kaspi” has published an article on this topic.
According to business consultant Vusal Selimov, it is possible to register a company online within three days without paying any fees. The first step is to register online with the relevant State Tax Service authorities:
“During registration, an entrepreneur must obtain an ‘ASAN Imza’ (mobile electronic signature), enter details such as the company’s name, charter capital, legal address, director, shareholders, and other essential information. The process does not require extensive documentation. The tax authority reviews the application within three days. If there are no discrepancies in the information provided, you receive a notification confirming your company’s registration. If there are inconsistencies, your application will be rejected, and the reasons will be communicated to you. After making the necessary corrections, the company will be registered. Some reasons for rejection may include the chosen company name already being in use or the absence of a legal address.”
What Happens After Company Registration?
Once your company is registered, you will receive a Taxpayer Identification Number (TIN or VÖEN), an extract from the registry, and charter documents in your personal cabinet on the State Tax Service’s electronic system.
The next step is to obtain a company seal. According to Vusal Selimov, this is a straightforward process:
“All companies are required to have a company seal as per state regulations. Individual entrepreneurs with a TIN are not obliged to have a seal, but they can obtain one if desired. The company’s director or sole proprietor (who is a physical person with a TIN) can present their legal documents to a printing service and obtain a company seal within a single day or even faster.”
Opening a Business Bank Account
The next step is to open a business bank account. According to the consultant, some banks in Azerbaijan offer online bank account opening services:
“Through your personal cabinet, you submit an application to the State Tax Service for opening a bank account. You specify the bank where you want to open an account. Within 1-2 days, the State Tax Service sends a ‘Certificate Duplicate’ to your selected bank. You then visit the bank to complete the account opening process. Currently, some banks allow online bank account opening as well.”
Registering a Business Address
At the same time, entrepreneurs can formalize their lease agreement:
“Both parties—the landlord and the tenant—must sign and seal the lease agreement. Once completed, you register the business premises under your company’s name and obtain an identification code for the location.”
After completing these steps, you can officially start operating as a company. Vusal Selimov notes that company registration procedures in Azerbaijan are straightforward and are becoming even simpler over time:
“Depending on the type of business, a license may be required. The procedures for obtaining a license are being simplified year by year.”
Business Growth and Classification
As companies grow, they can transition from micro-businesses to large enterprises. In Azerbaijan, business entities are classified based on their annual revenue:
• Micro-business: Turnover up to 200,000 AZN.
• Small business: Turnover between 200,000 AZN and 3 million AZN.
• Medium-sized business: Turnover between 3 million AZN and 30 million AZN.
• Large business: Turnover exceeding 30 million AZN.
State Benefits and Incentives for Small and Medium Businesses
According to Selimov, small businesses can take advantage of certain government incentives:
“During the initial registration process with the State Tax Service, you are asked to choose the type of taxation for your company. The available options include ‘Simplified Tax,’ ‘Income Tax’ (for individuals with a TIN), ‘Profit Tax’ (for legal entities), and ‘Value Added Tax (VAT).’ Since you are just starting, I would recommend choosing either Simplified Tax or Profit/Income Tax. If a company’s rolling 12-month turnover does not exceed 200,000 AZN, it can remain under the Simplified Tax regime. Companies under this regime pay only 2% of their revenue as tax. If a company opts for Profit or Income Tax and qualifies as a micro-business (with an annual turnover below 200,000 AZN), they can benefit from a 75% exemption on the standard 20% profit tax under the Tax Code of Azerbaijan.”
Access to Loans and Financing
Opportunities vary depending on whether a business is micro, small, or medium-sized:
“If a small business has been operating for some time and has an established history, it can obtain loans from banks even with a lower turnover. However, banks generally do not offer special credit incentives for small businesses. Micro-businesses have even fewer opportunities to secure loans. In contrast, medium-sized businesses have greater access to bank loans and benefits compared to small businesses, as they are seen as more stable and reliable.
The government has established specific institutions, such as the Small and Medium Business Development Agency (KOBIA), to support SMEs in obtaining financing and fostering business growth.”
Should You Buy a Ready-Made Business?
For some entrepreneurs, buying an existing business instead of registering a new one may be a better option. Selimov explains:
“In certain industries, buying an existing business is more beneficial than starting from scratch. For example, if you need a company to participate in government tenders, it is better to purchase an existing company. Many tenders require that the company has a track record in its specific industry. If you register a new company, you will not be able to meet the tender eligibility requirements. However, ready-made businesses are usually more expensive.”
Key Recommendations for New Entrepreneurs
Before starting a business, Selimov advises entrepreneurs to develop a clear business plan:
“Before handling legal documentation, you should have a clear business plan. Gain a full understanding of the industry you are entering, as the practical realities of business operations can be very different from what they appear on the surface. There is no such thing as an ‘easy’ business to make money. Every industry has its challenges and complexities.”
Conclusion
Starting a business in Azerbaijan has become a simple and efficient process thanks to digital tools like Asan Imza and online registration services. Entrepreneurs can register a company within three days, open a bank account, and legally start operations with minimal hassle. The government continues to introduce new initiatives to support SMEs, including tax incentives and access to financing. With the right approach and planning, launching and scaling a business in Azerbaijan has never been easier.
