Last updated: 24 Sep 2013
Doing business
Business culture
Business tips
Azeribaijanis make extensive use of business cards, so bring plenty with you.
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 or jackets and ties. Similarly, women should wear smart professional outfits. Shorts are not advisable at work or socially.
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.
Most Azerbaijanis are bilingual (Russian and Azerbaijani) – it is recommended that you bring an interpreter.
In accordance with the new constitution. All legal documents and records will be in Azeri.
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 (eg. 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 among Azeris to open a gift in the presence of the giver.
Setting up in Azerbaijan
Due to the changes by moving away from centralised state system, independent traders and small stores are prospering within the country. The 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. As such it is considered for Azeri taxation, legal and currency purposes as ‘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.
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. As a result, most foreign companies are currently operating as ROs.
(Source: PriceWaterhouseCoopers)
Banking and finance
The positive economic and social change in the Republic of Azerbaijan observed in recent years 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 Azerbaijan's harmonious integration into 'the global economy' and significantly raised its international reputation.
A balanced monetary and credit policy and positive developments within the banking system are among the most important factors that have revived Azerbaijan's 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.
There has been considerable growth of the commercial banks' involvement in the domestic economy, substantial advances in banking reforms. Reforming the banking sector has improved liquidity and profitability for the commercial banks and has repeatedly raised total banking assets in relation to GDP.
The International Bank of Azerbaijan (IBA) plays an important role in these processes. The IBA was previously the USSR's Foreign Economic Bank branch, transforming in 1992 to an independent finance and credit organisation, its history tallies with that of Azerbaijan's independence. 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 – http://economy.gov.az
Ministry of Taxes – http://taxes.gov.az
Political Structure. Governmental Administration – http://president.gov.az
Please note: this list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only.