Company registration in Azerbaijan

Opening a business in Azerbaijan has become considerably simpler. Since 2024 electronic registration is carried out through the IVI portal (new.e-taxes.gov.az), is completely free of charge (0 AZN) and requires no notary visit.

Choosing a legal form

Four main business forms exist in Azerbaijan. A sole trader (FS) is the simplest: Azerbaijani citizens can complete registration through the IVI portal (new.e-taxes.gov.az) in 1 business day. However, a sole trader bears full personal liability; when annual revenue exceeds 200,000 AZN, switching to an LLC is advisable. A limited liability company (LLC) is the most widespread form — under Art.79 of the Civil Code, the minimum charter capital is just 100 AZN. Personal asset protection, ability to attract investment and stronger corporate credibility are the LLC's main advantages. A foreign company branch is not a separate legal entity — the parent company bears full liability but local operations in Azerbaijan become possible.

The tax system

Under Art.218 of the Tax Code, a simplified tax regime is available for small businesses: companies with annual turnover below 200,000 AZN pay just 2% of monthly turnover. This regime replaces both income tax and VAT obligations. Food service (restaurants, cafes) attracts a specific rate: 6% with a POS terminal, 8% without. Crop farming and animal husbandry are fully exempt from income tax. Larger companies exceeding 200,000 AZN switch to the general system: LLCs pay 20% profit tax, sole traders pay 14–25% income tax. The VAT rate under Art.154 of the Tax Code is 18%.

Incentives and special regimes

Azerbaijan offers significant tax incentives in several strategic sectors. IDDA Technopark (idda.az/az/innovasiya/aim/texnopark) residents enjoy 0% profit tax and 5% employee income tax; equipment imports are exempt from customs duties and VAT. A Startup Certificate from KOBİA (smb.gov.az, Cabinet Decision No. 20 of 29.01.2021) gives micro and small enterprises a 3-year profit/income tax exemption. Manufacturing companies in industrial parks benefit from 0% profit tax for 7 years. Registration in liberated territories grants full exemption from all taxes for 10 years.

For foreign nationals

Under Art.14 of the Civil Code of the Republic of Azerbaijan, foreign nationals may fully establish an LLC. Required documents: notarised passport translation, founder resolution, charter. The registration procedure is identical for Azerbaijani citizens, though some banks may require in-person attendance when opening a business account. The sole trader form is available to Azerbaijani citizens only.

This tool consolidates legal forms, tax regimes, incentives and registration procedures in one place — to make starting a business in Azerbaijan more transparent. Answer the survey and receive your personalised recommendation.