Azerbaijan Economy Profile - Doing Business 2019
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Doing Business 2019 Azerbaijan
Economy Profile
Azerbaijan
Page 1
Doing Business 2019 Azerbaijan
Economy Profile of Azerbaijan
Doing Business 2019 Indicators
(in order of appearance in the document)
Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company
Dealing with construction permits Procedures, time and cost to complete all formalities to build a warehouse and the quality
control and safety mechanisms in the construction permitting system
Getting electricity Procedures, time and cost to get connected to the electrical grid, and the reliability of the
electricity supply and the transparency of tariffs
Registering property Procedures, time and cost to transfer a property and the quality of the land administration
system
Getting credit Movable collateral laws and credit information systems
Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance
Paying taxes Payments, time, total tax and contribution rate for a firm to comply with all tax regulations as
well as post-filing processes
Trading across borders Time and cost to export the product of comparative advantage and import auto parts
Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes
Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the
legal framework for insolvency
Labor market regulation Flexibility in employment regulation and aspects of job quality
Page 2Doing Business 2019 Azerbaijan
About Doing Business
The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected
cities at the subnational and regional level.
The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying
to them through their life cycle.
Doing Business captures several important dimensions of the regulatory environment as it applies to local firms. It provides quantitative
indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit,
protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also
measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market
regulation indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business, it does
present the data for these indicators.
By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time,
Doing Business encourages economies to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves
as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy.
In addition, Doing Business offers detailed subnational reports, which exhaustively cover business regulation and reform in different cities and
regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve
performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region
and with the 190 economies that Doing Business has ranked.
The first Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets
and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that
have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the
Russian Federation and the United States) where Doing Business also collected data for the second largest business city. The data for these
11 economies are a population-weighted average for the 2 largest business cities. The project has benefited from feedback from
governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving
the regulatory environment for business around the world.
More about Doing Business (PDF, 5MB)
Page 3Doing Business 2019 Azerbaijan
Ease of Doing Business in
Region Europe & Central Asia DB 2019 Rank
190 1
Azerbaijan
Income Category Upper middle income 25
DB 2019 Ease of doing business score
Population 9,862,429
0 100
City Covered Baku 78.64
DB 2019 Ease of Doing Business Score
0 100
78.64: Azerbaijan (Rank: 25)
77.37: Russian Federation (Rank: 31)
76.95: Poland (Rank: 33)
72.34: Regional Average (Europe & Central Asia)
72.30: Romania (Rank: 52)
71.24: Bulgaria (Rank: 59)
Note: The ease of doing business score captures the gap of each economy from the best regulatory performance observed on each of the indicators across all economies
in the Doing Business sample since 2005. An economy’s ease of doing business score is reflected on a scale from 0 to 100, where 0 represents the lowest and 100
represents the best performance. The ease of doing business ranking ranges from 1 to 190.
Rankings on Doing Business topics - Azerbaijan
2
1 9
17
22
28
28 40
45
55 61
74
84
82
Rank
109
136
163
190
Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving
a with Electricity Property Credit Minority Taxes across Contracts Insolvency
Business Construction Investors Borders
Permits
Ease of Doing Business Score on Doing Business topics - Azerbaijan
100 96.14
84.63 85.23
80.00 81.67
80 77.27 77.04
73.11
67.51
63.79
Score
60
40
20
0
Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving
a with Electricity Property Credit Minority Taxes across Contracts Insolvency
Business Construction Investors Borders
Permits
Page 4Doing Business 2019 Azerbaijan
Starting a Business
This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited
liability company to start up and formally operate in each economy’s largest business city.
To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has
start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10
and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two
types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the
other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a
business. These scores are the simple average of the scores for each of the component indicators.
The most recent round of data collection for the project was completed in May 2018. See the methodology for more information.
What the indicators measure Case study assumptions
Procedures to legally start and formally operate To make the data comparable across economies, several assumptions about the
a company (number) business and the procedures are used. It is assumed that any required information is
readily available and that the entrepreneur will pay no bribes.
• Preregistration (for example, name verification or
reservation, notarization) The business:
• Registration in the economy’s largest business - Is a limited liability company (or its legal equivalent). If there is more than one type
city
of limited liability company in the economy, the most common among domestic firms
• Postregistration (for example, social security is chosen. Information on the most common form is obtained from incorporation
registration, company seal) lawyers or the statistical office.
- Operates in the economy’s largest business city. For 11 economies the data are
• Obtaining approval from spouse to start a also collected for the second largest business city.
business or to leave the home to register the
- The entire office space is approximately 929 square meters (10,000 square feet).
company
- Is 100% domestically owned and has five owners, none of whom is a legal entity;
• Obtaining any gender specific document for has a start-up capital of 10 times income per capita and has a turnover of at least
company registration and operation or national 100 times income per capita.
identification card - Performs general industrial or commercial activities, such as the production or sale
of goods or services to the public. The business does not perform foreign trade
Time required to complete each procedure
activities and does not handle products subject to a special tax regime, for example,
(calendar days)
liquor or tobacco. It does not use heavily polluting production processes.
• Does not include time spent gathering - Leases the commercial plant or offices and is not a proprietor of real estate and the
information amount of the annual lease for the office space is equivalent to the income per
capita.
• Each procedure starts on a separate day (2 - Does not qualify for investment incentives or any special benefits.
procedures cannot start on the same day)
- Has at least 10 and up to 50 employees one month after the commencement of
• Procedures fully completed online are recorded operations, all of whom are domestic nationals.
as ½ day - Has a company deed that is 10 pages long.
• Procedure is considered completed once final The owners:
document is received
- Have reached the legal age of majority. If there is no legal age of majority, they are
• No prior contact with officials assumed to be 30 years old.
Cost required to complete each procedure (% of - Are sane, competent, in good health and have no criminal record.
income per capita) - Are married and the marriage is monogamous and registered with the authorities.
- Where the answer differs according to the legal system applicable to the woman or
• Official costs only, no bribes man in question (as may be the case in economies where there is legal plurality), the
• No professional fees unless services required by answer used will be the one that applies to the majority of the population.
law or commonly used in practice
Paid-in minimum capital (% of income per
capita)
• Funds deposited in a bank or with third party
before registration or up to 3 months after
incorporation
Page 5Doing Business 2019 Azerbaijan
Starting a Business - Azerbaijan
Standardized Company
Legal form Limited Liability Company (LLC)
Paid-in minimum capital requirement AZN 0
City Covered Baku
Indicator Azerbaijan Europe & OECD high Best Regulatory
Central Asia income Performance
Procedure – Men (number) 3 5.2 4.9 1 (New Zealand)
Time – Men (days) 3.5 12.9 9.3 0.5 (New Zealand)
Cost – Men (% of income per capita) 1.3 4.6 3.1 0.0 (Slovenia)
Procedure – Women (number) 3 5.2 4.9 1 (New Zealand)
Time – Women (days) 3.5 12.9 9.3 0.5 (New Zealand)
Cost – Women (% of income per capita) 1.3 4.6 3.1 0.0 (Slovenia)
Paid-in min. capital (% of income per capita) 0.0 2.3 8.6 0.0 (117 Economies)
Figure – Starting a Business in Azerbaijan and comparator economies – Ranking and Score
DB 2019 Starting a Business Score
0 100
96.14: Azerbaijan (Rank: 9)
93.04: Russian Federation (Rank: 32)
90.02: Regional Average (Europe & Central Asia)
85.38: Bulgaria (Rank: 99)
83.90: Romania (Rank: 111)
82.85: Poland (Rank: 121)
Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores
are the simple average of the scores for each of the component indicators.
Page 6Doing Business 2019 Azerbaijan
Figure – Starting a Business in Azerbaijan – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
3.5 1.4
3 1.2
Cost (% of income per capita)
2.5 1
Time (days)
2 0.8
1.5 0.6
1 0.4
0.5 0.2
0 0
1 2 3
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and
women, the graph shows the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.
Page 7Doing Business 2019 Azerbaijan
Details – Starting a Business in Azerbaijan – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Obtain electronic signature for online registration 1 day AZN 18 (e-signature
Agency : Data Processing Center under the Ministry of Transport, ASAN-Imza, per
Communication and High Technologies person)
An electronic signature is a pre-requisite to online registration. The most common
type of electronic signature is ASAN Imza, which can be activated on a sim-card.
ASAN Imza costs AZN 18 and is valid for 3 years. Each founder is required to
obtain e-signature (alternatively, a PoA needs to be issued and notarized, which
will then require only one person to obtain e-signature).
2 Apply for registration; obtain TIN number and register for VAT 2 days no charge
Agency : One Stop Shop, Ministry of Taxes
Online application for registration is available at https://www.e-taxes.gov.az/ as of
December 2011 (Article 5-1. has been added to the Law of Azerbaijan Republic
"On state registration of legal entities and state registry.") Online application for
registration is exempted from state fee and is completely free (Article 20-1.3 of
the Law of Azerbaijan Republic “On State Fee”).
Details are available at http://www.taxes.gov.az/modules/birpencere/eng/1.html
The time limit for online application for registration is 1 day. A hard copy of
registration documents are obtained from the Tax Office the day after application
was submitted. Having a registration number is sufficient to start operation.
Expedited registration is available for companies that have one founder.
For online application for registration, it is required to have e-signature. The only
document required to be submitted online is the charter.
Documents required for paper registration include the following:
-Standard application form
-Founding documents – the charter of the entity approved by the founder or
his/her legal representative, minutes of the foundation meeting;
-Resolution of establishment
-If the founder is an individual – copy of his/her identity card (notarization of the
signature is optional);
-A document confirming the legal address of the entity.
3 Register employees with the Ministry of Labor and Social Protection Less than one day no charge
Agency : Ministry of Labor and Social Protection (online procedure)
As of February 9, 2014, all employment agreements must be registered with the
Ministry of Labor and Social Protection. Registration is done at the website of the
Ministry of Labor and Social Protection (accessible through www.e-gov.az). After
that, immediate confirmation is obtained and employees can start actual
employment.
A fine of AZN 25 000 AZN applies if employment agreements were not
registered.
Takes place simultaneously with previous procedure.
Page 8Doing Business 2019 Azerbaijan
Dealing with Construction Permits
This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all
required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with
Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of
quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of
data collection was completed in May 2018. See the methodology for more information
What the indicators measure Case study assumptions
Procedures to legally build a warehouse To make the data comparable across economies, several assumptions about the
(number) construction company, the warehouse project and the utility connections are used.
• Submitting all relevant documents and obtaining The construction company (BuildCo):
all necessary clearances, licenses, permits and
certificates - Is a limited liability company (or its legal equivalent) and operates in the economy’s
largest business city. For 11 economies the data are also collected for the second
• Submitting all required notifications and receiving largest business city.
all necessary inspections
- Is 100% domestically and privately owned; has five owners, none of whom is a
• Obtaining utility connections for water and legal entity. Has a licensed architect and a licensed engineer, both registered with
sewerage the local association of architects or engineers. BuildCo is not assumed to have any
other employees who are technical or licensed experts, such as geological or
• Registering and selling the warehouse after its
topographical experts.
completion
- Owns the land on which the warehouse will be built and will sell the warehouse
Time required to complete each procedure upon its completion.
(calendar days)
The warehouse:
• Does not include time spent gathering
- Will be used for general storage activities, such as storage of books or stationery.
information
- Will have two stories, both above ground, with a total constructed area of
• Each procedure starts on a separate day— approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3
though procedures that can be fully completed meters (9 feet, 10 inches) high and will be located on a land plot of approximately
online are an exception to this rule 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the
• Procedure is considered completed once final warehouse is valued at 50 times income per capita.
document is received - Will have complete architectural and technical plans prepared by a licensed
architect. If preparation of the plans requires such steps as obtaining further
• No prior contact with officials documentation or getting prior approvals from external agencies, these are counted
as procedures.
Cost required to complete each procedure (% of
- Will take 30 weeks to construct (excluding all delays due to administrative and
income per capita)
regulatory requirements).
• Official costs only, no bribes
The water and sewerage connections:
Building quality control index (0-15)
- Will be 150 meters (492 feet) from the existing water source and sewer tap. If there
• Quality of building regulations (0-2) is no water delivery infrastructure in the economy, a borehole will be dug. If there is
no sewerage infrastructure, a septic tank in the smallest size available will be
• Quality control before construction (0-1)
installed or built.
• Quality control during construction (0-3) - Will have an average water use of 662 liters (175 gallons) a day and an average
• Quality control after construction (0-3) wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of
1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300
• Liability and insurance regimes (0-2) gallons) a day.
• Professional certifications (0-4) - Will have a constant level of water demand and wastewater flow throughout the
year; will be 1 inch in diameter for the water connection and 4 inches in diameter for
the sewerage connection.
Page 9Doing Business 2019 Azerbaijan
Dealing with Construction Permits - Azerbaijan
Standardized Warehouse
Estimated value of warehouse AZN 340,512.30
City Covered Baku
Indicator Azerbaijan Europe & OECD high Best Regulatory
Central Asia income Performance
Procedures (number) 18 16.0 12.7 None in 2017/18
Time (days) 116 170.1 153.1 None in 2017/18
Cost (% of warehouse value) 1.9 4.0 1.5 None in 2017/18
Building quality control index (0-15) 12.0 12.0 11.5 15.0 (3 Economies)
Figure – Dealing with Construction Permits in Azerbaijan and comparator economies – Ranking and Score
DB 2019 Dealing with Construction Permits Score
0 100
75.46: Bulgaria (Rank: 37)
75.18: Poland (Rank: 40)
74.61: Russian Federation (Rank: 48)
73.11: Azerbaijan (Rank: 61)
69.02: Regional Average (Europe & Central Asia)
58.20: Romania (Rank: 146)
Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with
construction permits. These scores are the simple average of the scores for each of the component indicators.
Figure – Dealing with Construction Permits in Azerbaijan – Procedure, Time and Cost
Time (days) Cost (% of warehouse value)
1
100
Cost (% of warehouse value)
0.8
80
Time (days)
0.6
60
0.4
40
0.2
20
0 0
1 2 *3 *4 *5 6 7 8 9 10 11 12 * 13 14 15 16 17 18
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and
women, the graph shows the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.
Page 10Doing Business 2019 Azerbaijan
Figure – Dealing with Construction Permits in Azerbaijan and comparator economies – Measure of Quality
15 14.0 14.0
13.0
12.0 12.0
Index score 10.0
10
5
0
Azerbaijan Bulgaria Poland Romania Russian Federation Europe & Central Asia
Details – Dealing with Construction Permits in Azerbaijan – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Obtain geotechnical study / soil test 14 days AZN 1,750
Agency : Private licensed company
The soil investigation helps to determine the bearing capacity of the land, which
in turn helps to determine the load capability, the type and depth of foundation, in
order to make sure to select a suitable construction technique.
2 Obtain technical conditions from the Baku City Sanitation and 15 days no charge
Epidemiology Center
Agency : Baku City Sanitation and Epidemiology Center
Technical conditions from the Baku City Sanitation and Epidemiology Center are
required for the preparation of the project.
According to the new Building Code, the Baku city executive authority will have to
obtain all technical conditions and approvals on behalf of BuildCo. However, in
practice building companies obtain the technical conditions directly from the
issuing authorities.
3 Obtain technical conditions from the State Fire Control Service of the 15 days no charge
Ministry for Emergency Situations (MES)
Agency : Fire Department (Ministry for Emergency Situations)
Under the law “On Fire Safety” and according to other norms of Azerbaijan, the
authorities (taking into account prohibitions and limitations) shall grant a permit
and, if necessary, present specific guidelines for the construction design and
implementation phases. A fire inspection must be carried out.
According to the new Building Code, the Baku city executive authority will have to
obtain all technical conditions and approvals on behalf of BuildCo. However, in
practice building companies obtain the technical conditions and project approvals
directly from the issuing authorities.
4 Obtain technical conditions from the Ministry of Ecology and Natural 15 days no charge
Resources
Agency : Ministry of Ecology and Natural Resources
According to the law “On Environmental Protection”, a permit shall be granted
and the conditions adjusted to meet environmental protection regulations, land
reclamation, rehabilitation and efficient use of natural resources, improvement of
territories, and enhancement of the environment.
According to the new Building Code, the Baku city executive authority will have to
obtain all technical conditions and approvals on behalf of BuildCo. However, in
practice building companies obtain the technical conditions and project approvals
directly from the issuing authorities.
5 Obtain technical conditions from the water and sewage authority (Azersu 10 days no charge
OJSC)
Agency : Azersu OJSC
Under the law “On Water Supply and Waste Waters”, the water and sewage
authority will grant a permit and issue guidelines for the construction design and
implementation phases. In doing so, the authorities must consider prohibitions
and limitations for the water system and wastes. Connection to the main lines is
permitted after construction is done.
According to the new Building Code, the Baku city executive authority will have to
obtain all technical conditions and approvals on behalf of BuildCo. However, in
practice building companies obtain the technical conditions and project approvals
directly from the issuing authorities.
Page 11Doing Business 2019 Azerbaijan
6 Register construction passport at Baku City Executive Authority 1 day no charge
Agency : Baku City Executive Authority (Department of Architecture and City
Building)
Based on the technical conditions and the opinions received from the various
agencies, BuildCo creates a construction passport that will allow for the project
design phase to begin. Once the passport is registered at the Baku City
Executive Authority (Department of Architecture and City Building), BuildCo
obtains a number assigned to the project. The project must be registered this
way for all of the agencies involved to have access to the information.
7 Request and obtain a building permit through the single window 30 days AZN 3,221
Agency : Single Window at the Baku City Executive Authority
According to Article 75 of the Urban Planning and Construction Code, BuildCo
submits an application to the Single Window at the Baku City Executive Office.
The building permit application includes the following:
- copy of document certifying the right of ownership, lease or use of the land plot;
- construction project;
- copy of excerpt from state register of legal persons, if the customer is a legal
person.
BuildCo gets the building permit together with a mark for construction (i.e. signing
board with all the relevant information about construction: the name of the
construction company, the duration of construction, the area of construction, etc)
which will be placed at the site to inform the neighbors and public about the
construction.
8 Receive inspection of foundation works 1 day no charge
Agency : Chief Agency for Construction Supervision and Safety
According to the Article 96.2.1 of the Building Code of the Republic of Azerbaijan,
the competent state bodies have to conduct supervision of construction. State
supervision of construction is carried out in the order stipulated in the "Rules of
state supervision of construction", approved by Presidential Decree of November
17, 2014, № 349". The inspections are conducted in all major phases of the
construction and inspection results are recorded in the Registry of State
Supervision in Construction.
9 Receive inspection of structural works 1 day no charge
Agency : Chief Agency for Construction Supervision and Safety
According to the Article 96.2.1 of the Building Code of the Republic of Azerbaijan,
the competent state bodies have to conduct supervision of construction. State
supervision of construction is carried out in the order stipulated in the "Rules of
state supervision of construction", approved by Presidential Decree of November
17, 2014, № 349". The inspections are conducted in all major phases of the
construction and inspection results are recorded in the Registry of State
Supervision in Construction.
10 Receive inspection of plumbing works 1 day no charge
Agency : Chief Agency for Construction Supervision and Safety
According to the Article 96.2.1 of the Building Code of the Republic of Azerbaijan,
the competent state bodies have to conduct supervision of construction. State
supervision of construction is carried out in the order stipulated in the "Rules of
state supervision of construction", approved by Presidential Decree of November
17, 2014, № 349". The inspections are conducted in all major phases of the
construction and inspection results are recorded in the Registry of State
Supervision in Construction.
11 Receive inspection of roofing works 1 day no charge
Agency : Chief Agency for Construction Supervision and Safety
According to the Article 96.2.1 of the Building Code of the Republic of Azerbaijan,
the competent state bodies have to conduct supervision of construction. State
supervision of construction is carried out in the order stipulated in the "Rules of
state supervision of construction", approved by Presidential Decree of November
17, 2014, № 349. The inspections are conducted in all major phases of the
construction and inspection results are recorded in the Registry of State
Supervision in Construction.
12 Receive examination from Labor Inspection and other state authorities 1 day no charge
during construction works
Agency : Ministry of Economic Development
All examinations, except for tax, may be carried out only with the participation of
a representative from the Azerbaijan Republic Ministry of Economic
Development. Pursuant to the Labor Code and its implementing rules and
regulations, the state labor authorities may examine the workplace and labor
protection and technical security policies. A report is issued with the examination
results.
Page 12Doing Business 2019 Azerbaijan
Receive inspection from Ministry of Ecology and Natural Resources 1 day no charge
13 Agency : Ministry of Ecology and Natural Resources
If environmental standards were not in full compliance during construction, the
Ministry of Ecology and Natural Resources could inspect the site. An act or
statement is issued with the examination results.
14 Receive inspection from State Fire Control Service of the Ministry of 1 day no charge
Emergency Situations
Agency : Ministry for Emergency Situations (Chief Agency of Supervision on
Safety at Construction)
Fire inspections could be conducted to check if fire prevention measures are in
order. A report is issued with the examination results.
15 Obtain water and sewage connection 7 days AZN 200
Agency : AzerSu (State Water Agency)
Connecting to the water supply and sewage systems is done in accordance with
the "Rules of issuing of technical specifications and connection of consumers to
the water supply and sewage", approved by the Cabinet of Ministers of
Azerbaijan Republic dated August 13, 2014, № 275.
The fee to obtain a water and sewage connection is AZN 2.00 multiplied by the
water volume to be delivered in 24 hours (based on the connected pipe’s
diameter). In this case, it is assumed that 100 cubic meters can be delivered in
24 hours.
16 Receive final inspection 1 day no charge
Agency : Chief Agency for Construction Supervision and Safety and Baku City
Executive Authority (Department of Architecture and City Building)
Once the building is complete and the water and sewage connection is obtained,
a final inspection is performed by representatives from the Chief Agency for
Construction Supervision and Safety and the Baku City Executive Authority
(Department of Architecture and City Building), with the investor and BuildCo
present. Only after the final inspection may BuildCo apply for an occupancy
permit.
17 Request and obtain occupancy permit 30 days no charge
Agency : State control authorities: Architecture and City Building Department and
ecology, energy, sanitation, fire inspection, and supply organizations
After BuildCo completes construction, a commission will examine the building
quality and determine the feasibility of putting the building into operation. The
commission consists of representatives from the state control authorities,
especially the Architecture and City Building Department, and representatives of
organizations for ecology, energy, sanitation, supply, and fire inspection.
18 Register building with Real Estate Registry 9 days AZN 1,395
Agency : Real Estate Registry
This procedure is governed by the Civil Code of the Azerbaijan Republic and the
Law of the Azerbaijan Republic on State Registry of Real Estate. Attached to the
application must be the documents defining the company status, construction
documents, and a copy of the act or the statement on the operation license.
Relevant fees must also be paid. The State Registry of Real Estate registers the
building (warehouse) accoridng to the following schedule:
- Regular Service: 10 business days (14 calendar days); regular fee
- Faster Service: 7 business days (9 calendar days); fee multiplied by 1.5
- Express Service: 3 business days (4 calendar days); fee multiplied by 2
- One-day Service: 1 business day; fee multiplied by 3
BuildCo will obtain the complete property right (ownership, order, and use) over
the building (warehouse) from the date the certificate is registered.
Takes place simultaneously with previous procedure.
Page 13Doing Business 2019 Azerbaijan
Details – Dealing with Construction Permits in Azerbaijan – Measure of Quality
Answer Score
Building quality control index (0-15) 12.0
Quality of building regulations index (0-2) 2.0
How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0
Free of charge;
In official gazette.
Which requirements for obtaining a building permit are clearly specified in the building List of required 1.0
regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees
to be paid;
Required
preapprovals.
Quality control before construction index (0-1) 1.0
Which third-party entities are required by law to verify that the building plans are in Licensed 1.0
compliance with existing building regulations? (0-1) architect;
Licensed
engineer.
Quality control during construction index (0-3) 2.0
What types of inspections (if any) are required by law to be carried out during construction? Inspections by in- 1.0
(0-2) house engineer;
Inspections at
various phases.
Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0
inspections are
always done in
practice.
Quality control after construction index (0-3) 3.0
Is there a final inspection required by law to verify that the building was built in accordance Yes, final 2.0
with the approved plans and regulations? (0-2) inspection is
done by
government
agency; Yes, in-
house engineer
submits report for
final inspection.
Do legally mandated final inspections occur in practice? (0-1) Final inspection 1.0
always occurs in
practice.
Liability and insurance regimes index (0-2) 0.0
Which parties (if any) are held liable by law for structural flaws or problems in the building No party is held 0.0
once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) liable under the
law.
Which parties (if any) are required by law to obtain an insurance policy to cover possible No party is 0.0
structural flaws or problems in the building once it is in use (Latent Defect Liability Insurance required by law
or Decennial Insurance)? (0-1) to obtain
insurance .
Professional certifications index (0-4) 4.0
What are the qualification requirements for the professional responsible for verifying that the Minimum number 2.0
architectural plans or drawings are in compliance with existing building regulations? (0-2) of years of
experience;
University degree
in architecture or
engineering;
Passing a
certification
exam.
Page 14Doing Business 2019 Azerbaijan
What are the qualification requirements for the professional who supervises the construction Minimum number 2.0
on the ground? (0-2) of years of
experience;
University degree
in engineering,
construction or
construction
management;
Passing a
certification
exam.
Page 15Doing Business 2019 Azerbaijan
Getting Electricity
This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly
constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of
tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2018. See the methodology
for more information.
What the indicators measure Case study assumptions
Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions about the
(number) warehouse, the electricity connection and the monthly consumption are used.
• Submitting all relevant documents and obtaining The warehouse:
all necessary clearances and permits
- Is owned by a local entrepreneur and is used for storage of goods.
• Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the data are
receiving all necessary inspections
also collected for the second largest business city.
• Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is in an
purchasing material for these works area with no physical constraints. For example, the property is not near a railway.
- Is a new construction and is being connected to electricity for the first time.
• Concluding any necessary supply contract and - Has two stories with a total surface area of approximately 1,300.6 square meters
obtaining final supply
(14,000 square feet). The plot of land on which it is built is 929 square meters
Time required to complete each procedure (10,000 square feet).
(calendar days)
The electricity connection:
• Is at least 1 calendar day
- Is a permanent one with a three-phase, four-wire Y connection with a subscribed
• Each procedure starts on a separate day capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1
kilowatt (kW).
• Does not include time spent gathering
information - Has a length of 150 meters. The connection is to either the low- or medium-voltage
distribution network and is either overhead or underground, whichever is more
• Reflects the time spent in practice, with little common in the area where the warehouse is located and requires works that involve
follow-up and no prior contact with officials the crossing of a 10-meter road (such as by excavation or overhead lines) but are all
carried out on public land. There is no crossing of other owners’ private property
Cost required to complete each procedure (% of
because the warehouse has access to a road.
income per capita)
- Does not require work to install the internal wiring of the warehouse. This has
• Official costs only, no bribes already been completed up to and including the customer’s service panel or
switchboard and the meter base.
• Value added tax excluded
The monthly consumption:
The reliability of supply and transparency of
tariffs index (0-8)
- It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00
• Duration and frequency of power outages (0–3) p.m. (8 hours a day), with equipment utilized at 80% of capacity on average and that
there are no electricity cuts (assumed for simplicity reasons) and the monthly energy
• Tools to monitor power outages (0–1) consumption is 26,880 kilowatt-hours (kWh); hourly consumption is 112 kWh.
• Tools to restore power supply (0–1) - If multiple electricity suppliers exist, the warehouse is served by the cheapest
supplier.
• Regulatory monitoring of utilities’ performance
(0–1) - Tariffs effective in January of the current year are used for calculation of the price of
electricity for the warehouse. Although January has 31 days, for calculation
• Financial deterrents limiting outages (0–1) purposes only 30 days are used.
• Transparency and accessibility of tariffs (0–1)
Price of electricity (cents per kilowatt-hour)*
• Price based on monthly bill for commercial
warehouse in case study
*Note: Doing Business measures the price of
electricity, but it is not included in the ease of doing
business score nor the ranking on the ease of
getting electricity.
Page 16Doing Business 2019 Azerbaijan
Getting Electricity - Azerbaijan
Standardized Connection
Price of electricity (US cents per kWh) 5.4
Name of utility Azerishiq OJSC
City Covered Baku
Indicator Azerbaijan Europe & OECD high Best Regulatory
Central Asia income Performance
Procedures (number) 7 5.3 4.5 3 (25 Economies)
Time (days) 41 110.3 77.2 18 (3 Economies)
Cost (% of income per capita) 140.4 325.1 64.2 0.0 (3 Economies)
Reliability of supply and transparency of tariff 7 5.5 7.5 8.0 (27 Economies)
index (0-8)
Figure – Getting Electricity in Azerbaijan and comparator economies – Ranking and Score
DB 2019 Getting Electricity Score
0 100
94.00: Russian Federation (Rank: 12)
81.35: Poland (Rank: 58)
77.27: Azerbaijan (Rank: 74)
71.66: Regional Average (Europe & Central Asia)
54.93: Bulgaria (Rank: 147)
53.53: Romania (Rank: 154)
Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are
the simple average of the scores for all the component indicators except the price of electricity.
Page 17Doing Business 2019 Azerbaijan
Figure – Getting Electricity in Azerbaijan – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
160
40
140
35
Cost (% of income per capita)
30 120
Time (days)
25 100
20 80
15 60
10 40
5 20
0 0
1 *2 3 4 5 6 7
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and
women, the graph shows the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.
Figure – Getting Electricity in Azerbaijan and comparator economies – Measure of Quality
8
8
7 7 7
7
6
6 5.5
Index score
5
4
3
2
1
0
Azerbaijan Bulgaria Poland Romania Russian Federation Europe & Central Asia
Page 18Doing Business 2019 Azerbaijan
Details – Getting Electricity in Azerbaijan – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Submit application to Asan Communal and receive technical conditions 12 calendar days AZN 0
Agency : Asan Communal
The customer submits an application for a new electricity connection to Asan
Communal. The following documents must be submitted in paper format:
• copy of state registration certificate of legal entity;
• copy of document proving the right of ownership or use of a facility and a land
plot where the facility is situated;
• the permit of local executive power authority on the construction of a facility;
• breakdown of the power load
2 Receive site inspection by Azerishiq OJSC for preparing technical 1 calendar day AZN 0
conditions
Agency : Azerishiq OJSC
A network engineer from Baku Electric Shabaka will visit the site to determine the
arrangements for an optimal connection and prepare the technical conditions. It
is required that someone from the applicant’s party is present at the site during
the inspection.
3 Await completion and approval on the design of the external connection 11 calendar days AZN 0
Agency : Azerishiq OJSC
Azerishiq OJSC prepares the design of the external electrical connection based
on the technical conditions.
4 Submit notification on the commencement of the external works 2 calendar days AZN 0
Agency : Local Municipality and Ministry of Interior
After the receipt of the application for technical conditions and electrical
connection, Asan communal submits an application for an excavation permit
without involving the customer. However, a letter must be sent to the Local
Municipality and Ministry of Interior (Police) notifying the beginning of the
excavation works.
5 Await completion of external works 7 calendar days AZN 9,562.5
Agency : Electrical contractor
The customer hires a licensed electrical installation organization to carry out the
external connection works.
6 Receive external and internal inspections and obtain operation permit 2 calendar days AZN 0
Agency : Energonadzor (State Energy Inspectorate)
After the completion of the external connection works there is a final inspection
by Energonadzor (State Energy Inspectorate) which issues an operation permit.
Energonadzor checks the compliance of the installation with the technical
conditions.
7 Conclude supply contract with Azerishiq OJSC and await final connection 7 calendar days AZN 0
Agency : Azerishiq OJSC
The customer must submit the operation permit to the utility and concludes a
supply contract. Once this is completed, the customer is connected to the
electrical network and electricity starts flowing.
Takes place simultaneously with previous procedure.
Page 19Doing Business 2019 Azerbaijan
Details – Getting Electricity in Azerbaijan – Measure of Quality
Answer
Reliability of supply and transparency of tariff index (0-8) 7
Total duration and frequency of outages per customer a year (0-3) 3
System average interruption duration index (SAIDI) 0.9
System average interruption frequency index (SAIFI) 1.0
What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0
Mechanisms for monitoring outages (0-1) 1
Does the distribution utility use automated tools to monitor outages? Yes
Mechanisms for restoring service (0-1) 1
Does the distribution utility use automated tools to restore service? Yes
Regulatory monitoring (0-1) 1
Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of Yes
supply?
Financial deterrents aimed at limiting outages (0-1) 0
Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages No
exceed a certain cap?
Communication of tariffs and tariff changes (0-1) 1
Are effective tariffs available online? Yes
Link to the website, if available online http://www.azerishiq.
az/index.php?
lang=az&menu=law_
base&id=68
Are customers notified of a change in tariff ahead of the billing cycle? Yes
Note:
If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff
index.
If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index.
If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index.
Page 20Doing Business 2019 Azerbaijan
Registering Property
This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to
purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land
administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency
of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for
the project was completed in May 2018. See the methodology for more information.
What the indicators measure Case study assumptions
Procedures to legally transfer title on To make the data comparable across economies, several assumptions about the
immovable property (number) parties to the transaction, the property and the procedures are used.
• Preregistration procedures (for example, The parties (buyer and seller):
checking for liens, notarizing sales agreement,
paying property transfer taxes) - Are limited liability companies (or the legal equivalent).
- Are located in the periurban area of the economy’s largest business city. For 11
• Registration procedures in the economy's largest economies the data are also collected for the second largest business city.
business city.
- Are 100% domestically and privately owned.
• Postregistration procedures (for example, filling - Have 50 employees each, all of whom are nationals.
title with municipality) - Perform general commercial activities.
Time required to complete each procedure The property (fully owned by the seller):
(calendar days)
- Has a value of 50 times income per capita, which equals the sale price.
• Does not include time spent gathering - Is fully owned by the seller.
information - Has no mortgages attached and has been under the same ownership for the past
10 years.
• Each procedure starts on a separate day -
- Is registered in the land registry or cadastre, or both, and is free of title disputes.
though procedures that can be fully completed
online are an exception to this rule - Is located in a periurban commercial zone, and no rezoning is required.
- Consists of land and a building. The land area is 557.4 square meters (6,000
• Procedure is considered completed once final square feet). A two-story warehouse of 929 square meters (10,000 square feet) is
document is received located on the land. The warehouse is 10 years old, is in good condition, has no
• No prior contact with officials heating system and complies with all safety standards, building codes and legal
requirements. The property, consisting of land and building, will be transferred in its
Cost required to complete each procedure (% of entirety.
property value) - Will not be subject to renovations or additional construction following the purchase.
- Has no trees, natural water sources, natural reserves or historical monuments of
• Official costs only (such as administrative fees, any kind.
duties and taxes).
- Will not be used for special purposes, and no special permits, such as for
• Value Added Tax, Capital Gains Tax and illicit residential use, industrial plants, waste storage or certain types of agricultural
payments are excluded activities, are required.
- Has no occupants, and no other party holds a legal interest in it.
Quality of land administration index (0-30)
• Reliability of infrastructure index (0-8)
• Transparency of information index (0–6)
• Geographic coverage index (0–8)
• Land dispute resolution index (0–8)
• Equal access to property rights index (-2–0)
Page 21Doing Business 2019 Azerbaijan
Registering Property - Azerbaijan
Indicator Azerbaijan Europe & OECD high Best Regulatory
Central Asia income Performance
Procedures (number) 3 5.3 4.7 1 (4 Economies)
Time (days) 5.5 20.3 20.1 1 (New Zealand)
Cost (% of property value) 0.1 2.6 4.2 0.0 (Saudi Arabia)
Quality of the land administration index (0-30) 17.5 19.6 23.0 None in 2017/18
Figure – Registering Property in Azerbaijan and comparator economies – Ranking and Score
DB 2019 Registering Property Score
0 100
88.74: Russian Federation (Rank: 12)
84.63: Azerbaijan (Rank: 17)
76.09: Poland (Rank: 41)
75.57: Regional Average (Europe & Central Asia)
74.96: Romania (Rank: 44)
69.32: Bulgaria (Rank: 67)
Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These
scores are the simple average of the scores for each of the component indicators.
Figure – Registering Property in Azerbaijan – Procedure, Time and Cost
Time (days) Cost (% of property value)
0.09
5
0.08
Cost (% of property value)
0.07
4
0.06
Time (days)
3 0.05
0.04
2
0.03
0.02
1
0.01
0 0
1 2 3
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and
women, the graph shows the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.
Page 22Doing Business 2019 Azerbaijan
Figure – Registering Property in Azerbaijan and comparator economies – Measure of Quality
30
26.0
25
Index score 19.0 19.0 19.6
20 17.5 17.0
15
10
5
0
Azerbaijan Bulgaria Poland Romania Russian Federation Europe & Central Asia
Details – Registering Property in Azerbaijan – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Verification of title and obtaining non-encumbrance certificate Less than one day, AZN 31; (AZN 31 for
Agency : Notary online online certificate)
According to the Law of the Republic of Azerbaijan "On introduction of changes
into the Civil Code of the Republic of Azerbaijan" and the Law of the Republic of
Azerbaijan "On introduction of changes into the Law on the State Registry of
Real estate" (both dated December 27, 2013) starting from March 3, 2014,
notaries in Azerbaijan are now responsible for checking against encumbrances.
Notaries now have an access to the database of SSRRE under SCPI and can
get information about encumbrances on real estate and issue non-encumbrance
certificates online.
The new online service provided by the State Property Committee is available at
www. e-emdk.gov.az. The cost of online procedure is AZN 31.
Territorial offices of SSRRE under SCPI provide this services to applicants via
electronic system connected with electronic system of notaries. "
2 Notarization of sale-purchase agreement 1 day AZN 200; (
Agency : State Notary )
Under the law, the sale-purchase agreement and the transfer and acceptance act
duly signed by both parties must be notarized. In order to get the agreement
notarized the seller must provide evidence of his title to the property, i.e.
registration certificates . In addition to the above, both the seller and the buyer
must provide the notary public with other documents certifying their powers to
enter into the sale-purchase agreement (e.g. corporate documents, powers of
attorney). There is no legal requirement for the agreement to be prepared by a
lawyer. Accordingly, the parties are free to prepare the agreement
themselves.The stamp duty is paid to the notary, which in turn he shall transfer to
the Treasury within two banking days since the date of receipt of the duty.
However, in practice the stamp duty can be paid at a commercial bank. If the
parties pay at the bank, receipt of payment should be submitted.
The documentation shall include:
• Sale-purchase agreement and transfer and acceptance act
• Registration certificates
• Seller’s cadastral package of documents
• Corporate documents of the parties (e.g. charters, foundation agreements,
powers of attorney)
• Technical passport of the property (according to Article 144.2 of the Civil Code,
amended by the law of the Republic of Azerbaijan No. 201-IVQD dated
September 30, 2011 "On Making Amendments to the Civil Code of the Republic
of Azerbaijan", the notary certifies the agreement, which transfers immovable
property in accordance with the technical specifications of such immovable
property as recorded in the Real Estate State Registrar Service)
• Deposit slip (the buyer presents the deposit slip from the bank, confirming that
the funds were properly deposited before notary notarizes the transfer
agreement. After the completion of transaction, the notary write a cheque
payable to the seller to be presented to the bank to collect the purchase price for
the property)
Page 23Doing Business 2019 Azerbaijan
3 The buyer obtains the updated title 4 days AZN 277.88; (- AZN
Agency : Real Estate State Register Service under State Committee on Property 159.48 payable for
Issues the registration of a
Registration of the land as well as the property takes place simultaneously at the
title transfer for the
State Committee on Property Issues of the Republic of Azerbaijan.
warehouse of 929
In accordance with Resolution of Cabinet of Ministers of the Republic of square meters of the
Azerbaijan No. 266 dated 31 July 2014, the electronic service on "receipt of total area;
applications and documents for issuance of technical documents (passport and - AZN 18.4 payable
plan) regarding real estate registered in state registry of real estate at the for the registration of
discretion of owner" added to the list of electronic services provided by State a title transfer for the
Registry Service of Real Estate. land of 557.4 square
meters of the total
Collegium of State Committee on Property Issues approved on 18 November
land area;
2014 the administrative regulation on receipt of applications and documents for
issue of technical documents (passport and plan) regarding real estate registered - AZN 50 state duty
in state registry of real estate at the discretion of owner. On basis of these for technical
documents, it has become possible to apply for technical documents (passport passport;
and plan) via online procedure. - AZN 30 state duty
for an extract;
Service fees for building: - AZN 20 official
Technical re-inventory of real estate (service fee of this section is determined by
service fee)
applying 0,2 ratio to relevant tariffs of 1st section, but minimum amount must not
be under AZN 14,0)
Non-residential buildings (facilities), property complexes and enterprises.
- up to 50 m 2 50.0
- for every 1 m 2 area exceeding 50 m 2 to 100 m 2 1.40
- for every 1 m 2 area exceeding 100 m 2 to 200 m 2 1.0
- For every 1 m 2 area exceeding 200 m 2 to 300 m 2 0.95
- for every 1 m 2 area exceeding 300 m 2 to 400 m 2 0.90
- for every 1 m 2 area, exceeding 400 m 2 to 500 m 2 0.85
- for every 1 m 2 area exceeding 500 m 2 to 600 m 2 0.80
- for every 1 m 2 area exceeding 600 m 2 to 700 m 2 0.75
- for every 1 m 2 area exceeding 700 m 2 to 800 m 2 0.70
Land Plot - Other land plots
- When the area is less than 0,01 hectares = 60
- For each 0.01 ha of 0.01 hectares, when the area is from 0.01 ha to 0.10 ha = 7
Takes place simultaneously with previous procedure.
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