Azerbaijan has intriguing potential for investors interested in commerce and easy access to new markets. The country serves as a major crossroads for international trade, with substantial linkages on the east-west, south-north, and south-west routes.
Foreign direct investments have been increasing in the country, and not just in the transportation and trade sectors. The energy sector also offers significant investment prospects, with the oil and gas sectors accounting for the majority. Agriculture, transportation, tourism, and information and communication technology are all major areas that the government has targeted for increased foreign investment.
Limited Liability Company
limited liability company (LLC) is a corporation formed by one or more people (natural persons and/or legal entities) with a charter capital divided into shares with sizes determined by the charter. As can be observed from the term, the law does not place any restrictions on the number of LLC founders. In other words, the founder can be a single person or a group of people, including a foreign national. It should be emphasized that the legislation or documentation requirements for foreign citizens are the same as for Azerbaijani nationals, i.e. no additional or special requirements apply. Another advantage of the LLC is that there are no constraints in the legislation regarding its charter capital. To put it another way, there is no minimum or maximum charter capital; it can be any amount. As a result, while forming an LLC, the charter capital is frequently formed in the range of 10-100 manats. It should also be highlighted that the LLC registration process is renowned for its simplicity, and it would be fair to highlight the Ministry of Taxes’ creative approach in this area.
Open Joint Stock Company
It can be founded by one or more founders, persons, or legal entities, and is intended for a larger-scale enterprise. A JSC has a fund that is divided into shares and is owned by shareholders who must be permitted by insurance. The public can freely transfer and trade shares in an open joint-stock firm. A JSC’s shareholders are liable for the company’s debts and liabilities to the degree of their contributions. The JSC must have a Board of Directors, Supervisory Council, and Audit Commission that are all elected by the shareholders at the Annual General Meeting.
Closed Joint Stock Company
The closed joint-stock company acts primarily like an open one, with the stockholders having limited responsibility and being governed by a Board of Directors. It can also be formed by one or more natural or legal persons or entities with a common capital divided into shares. The primary distinction between the two types of JSCs is that a closed one cannot issue transferable shares or make them available to the general public.
General Partnership (GP)
It is a sort of partnership between two or more legal or natural persons in which both founders are responsible for the business’s debts and responsibilities.
Limited Partnership (LP)
It can be formed by two or more individuals or corporations, just like a general partnership, but not all of them will have unlimited liability (at least one will do). Those who are entirely liable do not engage in the entrepreneurial activity of the partnership.
Azeri Subsidiary, Representative Office, or Branch
The subsidiary is a legal entity owned by foreign investors and registered as a local limited liability company or joint-stock company (in most circumstances). Even if its ownership may be foreign, it is recognized as a locally registered Azerbaijani company for all tax reasons, and the reporting principles are the same as for resident firms.
The branch is just an extension of a foreign legal company, and it must pay an Azerbaijani registration cost. The branch is taxed on earnings earned in Azerbaijan, but it can channel those profits into foreign accounts that must be registered with the proper Azerbaijani authorities.
The representative office is a non-resident legal entity like the branch, but unlike the branch, its operations are limited to marketing, research, and other promotional activities for its head office.
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Breakdown of Azerbaijan company registration fees and expenses
