Azerbaijan Export and Investment Promotion Foundation AZERBAIJAN: BUSINESS AND INVESTMENT OPPORTUNITIES

Transcription

1 AZERBAIJAN: BUSINESS AND INVESTMENT OPPORTUNITIES

2 S N A P S H O T Establishment: 28 May 1918 Independence: 18 October 1991 Area: Population: Official Language: Government system: Membership in: 86.6 thsd km million Azerbaijani Presidential Republic UN, Council of Europe, OSCE, OIC Highlights: 1st democratic republic in the Islamic world 1st Opera in the Islamic world Women voting rights in 1918 (Italy ; Switzerland ; France 1944) Currency: Manat: 1 AZN = 0.95 USD

3 C H A R A C T E R I S T I C S OF E C O N O M Y Characteristics of economy

4 E C O N O M Y I N B R I E F GROWTH IN LAST 10 YEARS GROSS DOMESTIC PRODUCT FOREIGN DIRECT INVESTMENT FOREIGN TRADE ,2 bln. USD 8,0 bln. USD 31,0 bln. USD ,9 bln. USD 3,3 bln. USD 28,0 bln. USD ,2 bln. USD 4,2 bln. USD 8,5 bln. USD Source: State Statistics Committee of Azerbaijan, Central Bank of Azerbaijan

5 E C O N O M I C D I V E R S I F I C AT I O N Structure of GDP Diversification of economy and development of non-oil sectors are key strategic priority of economic policy non-oil oil Non-oil GDP, growth % Foreign investments in non-oil sectors, bln. USD

6 C O M P E T I T I V E N E S S Global Competitiveness Report st among CIS countries (7 times running, 40 th among 140 countries Major indicators: Inflation 1 st Macroeconomic environment 10 th Government budget balance 16 th General government debt 14 th Labour market efficiency 30 rd Capacity for innovation 43 rd Technological readiness 56 th The report assesses the ability of countries to provide high levels of prosperity to their citizens. This in turn depends on how productively a country uses available resources. Therefore, the Global Competitiveness Index measures the set of institutions, policies, and factors that set the sustainable current and medium-term levels of economic prosperity.

7 Favorable D O Ibusiness N G B U S Ienvironment N E S S R E P O R T Doing Business Report 2015 In the 10 th of the best reformers! 15th among the 50 most successful countries in reducing the distance from the "forward line" for the period since Some indicators: Company Registration - 12 Registration of real estate - 10 Enforcing Contracts - 31 Paying Taxes - 33 In the Global Competitiveness Index : Hiring and firing - 8 The burden of government regulation - 21 Protecting investors - 25

8 S T R AT E G I C G E O G R A P H Y SUPSA TBILISI ISTANBUL TANAP ERZURUM KARS BAKU CEYHAN

9 B U S I N E S S C L I M AT E Developed legal framework Top reformer of business regulations worldwide according to the WB Doing Business reports 2009 and 2015 Easy business start-up One-stop-shop system for business registration requiring 2 business days for start-up Competitive tax regime E-tax system. Corporate tax 20%, VAT 18%, Simplified tax 4% or 2%. Tax holidays for agriculture, industrial and technological parks Government e-services 454 e-services by state authorities

10 I N V E S T M E N T C L I M AT E Welcoming policy National regime for foreign investors with no restrictions for any type of foreign investment and no local content requirement Guarantees for investors Guarantees against adverse changes in the legislation, nationalisation and requisition. No restrictions for repatriation of profits Legal framework Sophisticated domestic legislation in addition to the international mechanisms for protection and promotion of foreign investment (New York and Washington Conventions, 46 BITs and 45 DTTs) Institutional support mechanisms AZPROMO, Azerbaijan Investment Company, One-stop-shops at industrial and technology parks

11 L I B E R A L I N V E S T M E N T C L I M AT E Liberal investment climate Non-oil sector 62 % Total Investments bln. USD Domestic 104,7 bln. USD Oil sector 38 % Foreign 94,7 bln. USD

12 A G R I C U LT U R E A N D F O O D Climatic zones/types 9 out of 11 existing in the world and fertile land Tax breaks and subsidies Strong comparative advantage in exporting fresh fruits, vegetables and processed foods in the region JVs in greenhouse production of fresh fruits and vegetables JVs in production of processed foodstuffs JVs in beverage production

13 T O U R I S M Unique geografic and climatic conditions Continuously increasing number of foreign and domestic tourists Foreign tourists according to travel objectives: leisure and recreation (30,8%), business (29,1%), treatment and religious (2,7%), other (37,4%) Organisation of joint international events Cooperation in tourism education Investment in tourism facilities by Czech companies

14 ICT ICT one of the fastest developing sectors. Large scale projects implemented (e.g. satellites, fibre-to-home, popular PC) Income from the sector exceeds 2 bln USD (almost 6 times growth within 5 years) 70% + internet users High demand for IT products High Tech Parks: Production of IT equipment, software, establishing regional data centers Establishing Czech IT companies in Azerbaijan

15 I C T : H i g h T e c h P a r k A z e r b a i j a n Total area: 5 thsd m2 in Baku and 50 ha on the Pirallahi island Administration: "High-Tech Park" under management of Ministry Communications and High Technologies Benefits: Tax and customs privileges for a period of 7 years Investment Package 1: Investments in real estate Investment Package 2: Technology Transfer Investment package 3: Startups and venture capital funds

16 I N D U S T R Y Share in GDP: 41,5% Intensive industrialisation policy: State programme on the development of industry in the years of Growth of industrial production since 2003: 2,7 times Investments into fixed capital: 10 bln USD (2013) 53.3% is foreign investment Mining (72,7%), manufacturing (21,4%), electric energy, gas and steam (5,2%), water and waste management (0,7%) Manufacturing: food industry (37,8%), petrochemicals (36,4%), machinery and equipment (7,7%), metallurgy (5,6%), construction materials (5,4%)

17 S P E C I A L Z O N E S Special zones Sumqayit chemical industrial park Balakhani Eko-industrial park Mingachaur industrial park High tech park Agro parks

18 C H E M I C A L I N D U S T R Y Large producer of petrochemical products Priority: Sumgait Chemical Industrial Park Fertilizers and other agrochemicals Pharmaceuticals: insulin, medical disposable syringes and systems, antibiotics Formaldehyde, melamine, soda, chlorine, olefiant gas, PVC, acyclic alcohols Synthetic motor oils, oil and air filters for cars, geotextiles, car tires, household chemicals

19 E N V I R O N M E N T A N D W A S T E T R E AT M E N T Waste management and recycling, rehabilitation of contaminated lakes and lands Priority project: Balakhani Eco-Industrial Park Priority areas: Recycling and reuse Recycling and reuse: plastics, tire/rubber, electronics, accumulators, non-ferrous metals, cabels and specific types of domestic waste Production of road asphalt and water proofing materials utilising industrial waste Seawater desalination plant

20 T H A N K Y O U F O R T H E AT T E N T I O N! A z e r b a i j a n E x p o r t a n d I n v e s t m e n t P r o m o t i o n F o u n d a t i o n A ZPROMO Baku Business Center 32, Neftchilar ave., Baku, Azerbaijan Tel.: (+99412) /48; Fax: (+99412) office@azpromo.az