The Cost of Doing Business in Azerbaijan

If you are considering setting up a business enterprise in Azerbaijan, one of the questions you are bound to have in your mind is on the cost of doing business there. Thankfully, as you are bound to discover, the cost of doing business in Azerbaijan is relatively low. Worth noting at this point is the fact that Azerbaijan was ranked 57th out of 190 economies in the 2018 ‘Ease of Doing Business’ report. This therefore means that Azerbaijan is one of the top 60 best countries to do business in.

Some of the specific costs you will have to deal with, while doing business in Azerbaijan include:

  1. The cost of business premises: rental costs in Azerbaijan are relatively low. If you prefer to buy the premises you will be doing business in, the cost is also likely to be affordable (though there may be challenges with the purchase of land if you are a foreigner). You will be surprised to learn that Azerbaijan has reasonably high quality properties, which you can rent and use as your business premises.
  2. The cost of labor: as a nation coming from a communist background, Azerbaijan has relatively low labor costs. This is especially the case for the lower cadre staff. But for those in the higher cadres, especially from mid-level management to high-level management and specialists, the salaries that are demanded can be relatively high.
  3. The cost of capital: if you are coming from a western ‘developed’ nation background, you may find Azerbaijani interest rates on the higher side. But by ‘developing nations’ standards, Azerbaijani interest rates are actually very good. But whereas the interest rates may be on the lower side, getting a loan can at times be rather difficult.
  4. The cost of government licenses: on paper, government licenses in Azerbaijan don’t cost a lot. But if it is a key business line you are getting into, you may have to pay lobbyists to canvass on your behalf, so that you can be granted the license. These lobbying fees would then raise the government license fees considerably. And you need to be aware of the fact that, even with the lobbying, you may not get the license – especially if the business line you are targeting is one that is considered to be ‘sensitive’.

Leave a Reply

Your email address will not be published. Required fields are marked *