Doing business

Business culture

Business tips

Azeris are very polite but also gregarious people who greet people with enthusiasm. Men use a handshake and kiss on the cheek, while women hug and kiss each other once on the left cheek, although many will shake hands with a foreigner. Males should wait and see if a woman extends her hand for a handshake.

Business dress is always conservative. Men generally wear suits and women wear smart professional outfits. Shorts are not advisable at work or socially.

Azerbaijanis make extensive use of business cards, so bring plenty with you.

In formal situations, use the first name followed by an appropriate title: ‘hanum’ for women and ‘bey’ for men. It is polite to enquire about business, personal health and family. Be prepared to accept tea and sweets before starting business proceedings.

Be aware that Azerbaijanis can be vague and noncommittal about specifics in business transactions and may be reluctant to stick to tight schedules.

There is a big population who have a Farsi background, so the language is widely spoken. Most Azerbaijanis are bilingual, speaking Russian and Azerbaijani (an ancient Turkish dialect), it is recommended that you bring an interpreter. Historical and cultural bonds between Turkey and Azerbaijan are very strong.

For Azeris the symbolic significance of a gift is more important than its monetary value. Gifts are appropriate for the most senior members of organisations and small gifts (e.g. company pens, books, clocks) can be given to support staff and those who arrange meetings with key contacts. Whether at home or business, it is considered bad manners to open a gift in the presence of the giver.

In accordance with the new constitution, all legal documents and records will be in Azerbaijani.

Setting up in Azerbaijan

Independent traders and small stores are prospering within the country due to moving away from the centralised state system, Activity has been developing until now through the intermediary of distributors, agents and new representation offices. The government is encouraging foreign investments.

Opening a Representative Office (RO)

An RO is the locally registered presence of a foreign company in Azerbaijan and is considered for taxation, legal and currency purposes a ‘non-resident’. If an RO is to be strictly limited to providing representative services to its head office, the RO will not be subject to any profit taxes. However, the office will be expected to pay for all other applicable taxes such as personal income taxes and social fund payments on Azeri employees. (Source: PriceWaterhouseCoopers)

Opening a Branch

The branch form of business is not well developed in most countries of the former Soviet Union. Azerbaijan laws do not provide clear guidance on the registration and taxation requirements for branch offices and as a result, most foreign companies are currently operating as ROs.

Banking and finance

In recent years the positive economic and social change in the Republic of Azerbaijan and the newly forming system of social relations has resulted in political stabilisation and economic growth. The state's bid to create a balanced market economy has promoted harmonious integration into 'the global economy' and significantly raised its international reputation.

A balanced monetary, credit policy and positive developments within the banking system are among the most important factors that have revived the economy. Macro-economic financial stability and the steadiness of the national currency exchange rate have been achieved, inflation is optimal and fruitful cooperation with the world's leading financial institutions has been embarked upon.

Considerable growth of the commercial banks' involvement in the domestic economy and substantial advances in banking reforms has improved liquidity and profitability and has repeatedly raised total banking assets in relation to Gross Domestic Product (GDP).

The International Bank of Azerbaijan (IBA) plays an important role and was previously the USSR's Foreign Economic Bank branch. The IBA has successfully progressed as the national economy has developed and has become an effective financial institution, occupying a leading position. (Source: GOLIATH Business Knowledge on Demand)

Links and resources

Government, business and trade

Ministry of Economic Development
Ministry of Taxes
Political Structure - Governmental Administration

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