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Government Simplifies Doing Business in Azerbaijan

Government Simplifies Doing Business in Azerbaijan

Business will be greatly stimulated for development in Azerbaijan in the near future.

Azerbaijani President Ilham Aliyev signed a decree on reducing the number of licenses necessary for entrepreneurship, simplifying the licensing procedures and transparency in this area Oct. 19. The decree also envisages rendering of services for issuing business licenses by ASAN service. The number of business licenses will be minimized to simplify doing business, although the extent of their reduction is unknown [at present, there are 56 kinds of such licenses in the country].

It is particularly pleasing that licenses will be issued by the ASAN Service. This service has already shown itself as the easiest way to register a property, get an identity card and other documents. This service also plays an important role in the fight against corruption and bribery. By the way, Azerbaijan is not the first country in the post-Soviet area that decided to reduce the number of business licenses. The same procedure was conducted in Ukraine in 2015, by reducing the number of licenses from 56 to 30. Kyrgyzstan plan to reduce the number of licenses from 101 to 84.

This decree was long awaited as the bill submitted by Azerbaijani President Ilham Aliyev to the parliament as a legislative initiative and envisaging the reduction of the number of inspections among entrepreneurs. The numerous inspections caused frequent complaints long ago. They were not always carried out to reveal any violations. Some officials often gained money this way.

Of course, these factors hindered the development of entrepreneurship in the country. But in the current economic situation, the development of the private sector is a particularly important issue. The reduction of oil revenues makes it necessary to find new sources of income to keep the economic growth rates at the same level. It has been repeatedly stated in Azerbaijan that there is a need to develop non-oil sector, including through private investments.

Therefore the current changes will make the business environment more attractive. It is envisaged that from Nov. 1, 2015, Azerbaijan will for two years suspend all the inspections on entrepreneurs. The only exception will be the inspections carried out by the State Office for Combating Corruption under Azerbaijani Prosecutor General’s Office.

In general, this can give a major momentum to the development of entrepreneurship. Recently, Azerbaijani government has been actively taking measures to simplify the business. For example, the changes made to the Tax Code, which are to come into force in 2016, will help simplify the system of taxing in construction, trade and catering.