Thousands of people around the world start a business every year, but only a certain number of them can achieve a successful result. The reason for this is that people start their activities without fully analyzing the market and without proper business planning. The first and most important step to start a successful business is finding a business idea. For this, first of all, the needs of the people in the geographical area where you want to establish a business, gaps in the market, and business opportunities should be investigated, in the next stage, a business plan should be drawn up covering issues such as the resources required for the activity you want to engage in (financial resources, manpower, office, warehouse, land, etc.), and the organization of sales. One of the main points when looking for a business idea is to correctly identify the needs and business opportunities in the geographical area where you will start your business activity. At this point, it is more appropriate for someone who is not familiar with the culture, people’s needs, and gaps in the market of the new country to contact business consulting companies when starting business activities here. Thus, you can get a quality result by identifying ideas that can be invested and getting help in their planning.
There are wide business opportunities for starting a business in Azerbaijan. Thus, the fact that Azerbaijan is a country that has recently restored its economic freedom, the state’s economic policy supporting business development, and the country has rich natural resources create wide business opportunities in many areas of the market. What areas are suitable for starting a business in Azerbaijan, and what are the business opportunities here? In this blog post, based on our internal market research, we will talk about some business opportunities in our country to create an initial impression among local and foreign investors.
I. Business opportunities in the Tourism Sector in Azerbaijan
One of the most favorable areas for investment in Azerbaijan is the tourism sector. Azerbaijan’s vast tourism resources and opportunities, rich nature, and natural resources attract tourists here. If we pay attention to the statistics, it can be seen that the number of tourists who came to Azerbaijan in the last year also confirms this. Thus, 791.8 thousand foreign tourists came to the Republic of Azerbaijan in 2021. It should be taken into account that these statistics show the arrivals to the country during the COVID-19 pandemic, and this indicator will increase in the coming years. On the other hand, tourism is a very broad field and contains many issues such as transportation, temporary accommodation, food, visa, etc. Despite this, there are serious shortcomings in terms of quality service provision in this rapidly developing field. Therefore, it is possible to achieve successful results by identifying existing gaps, deficiencies, and business opportunities in the local tourism sector and starting a business activity that offers more advanced and quality service to tourists.
A. Health Tourism
Health tourism, which is in high demand worldwide, has developed rapidly in the last decade. This area brings millions of dollars to world tourism every year. In 2018, the revenue of the healthcare market was 4.2 trillion dollars, and this market is expected to grow even more soon.
There are very favorable opportunities for the development of health tourism, especially thermal tourism, in Azerbaijan. The rich climate and natural resources of the country create conditions for the creation of businesses related to thermal tourism. The presence of many hydromineral reserves in different geographical regions of Azerbaijan allows for the development of the sanatorium-resort business. Also, the landscape-climate features create a basis for the development of the recreation and resort-tourism industry here. On the other hand, the large-scale dry subtropical climate of the area has a positive effect on human health. Hydrocarbon mineral waters near Nabran-Yalama, Gilezi-Zarat, Absheron, and Lankaran-Astara beaches of the Caspian coast, mineral waters rich in iodine, bromine, and other substances with great therapeutic effects, which come out of Surakhani, Sabunchu, and Shikh cape, are extremely beneficial for health. Big Shor and Masazir lakes are considered a source of healing mud. Naphthalan oil is useful for the treatment of 19 diseases. The presence of many sources of mineral water, healing oil, and mud creates invaluable conditions for the organization of thermal tourism in Azerbaijan. At present, several famous sanatoriums such as Naftalan, Galaaltı, and Istisu are clear examples showing the development prospects of thermal tourism.
In addition to providing services to tourists coming to Azerbaijan, it is also possible to start a successful business activity in the direction of providing services to tourists traveling from Azerbaijan to different countries for health and other purposes. In many cases, due to health problems, people are forced to go abroad. However, this is not easy and brings with it many questions: “Which country’s healthcare system is more advanced concerning the relevant disease?”, “What are the related costs?”, “How to solve the issues such as visa, accommodation, etc.?”. Therefore, you can achieve a successful result in your business by providing high-quality service to people in this area.
B. Entertainment tourism
Another sector where there are ample opportunities to start a business is entertainment tourism. The entertainment industry, which was formed at the beginning of the XX century, developed further after World War II. In modern times, entertainment tourism is an important part of the world economy. The entertainment industry is very broad and includes many areas. Various attractions, theme parks, water parks, famous theaters, carnivals, national holidays, festivals, etc. can be shown as an example.
As mentioned above, the field of tourism in Azerbaijan is developing rapidly, and large tourism resources attract tourists here. Taking advantage of Azerbaijan’s existing tourism prospects, various new types of services can be offered for both local tourists and foreigners. Despite this, there are serious deficiencies related to the services provided in the field of entertainment tourism. For example, attractions that form an important part of entertainment tourism are few in Azerbaijan and many of them do not have the quality expected by tourists. For this reason, it is possible to build a highly profitable business by creating different types of attractions.
II. Business Opportunities in the IT Sector in Azerbaijan
In the 60s of the XX century, the field of information technologies emerged with the creation of the first information systems. As a result of the development of the Internet, the creation of new programs and systems, and globalization, this field began to develop rapidly from the 90s of the XX century. In modern times, information technologies play a very important role in people’s daily life and make up a large part of the world economy. It is obvious to everyone that this field has great development prospects in the future.
Currently, many countries attach importance to the development of information technologies and implement domestic and foreign policies that support this. Azerbaijan is also on the list of these countries. There are wide opportunities for building businesses in various fields related to information technologies in Azerbaijan. These include activities such as Cyber Security, Graphic Design, Marketing, Web Development, App Development, etc. It should be noted that there are experts offering services in these areas in the local market. Nevertheless, competition in the field of information technologies in Azerbaijan is at a very low level. For this reason, the market prices for the services provided in this area are quite high. Therefore, a highly profitable business can be established by offering quality service in this area.
III. Business Opportunities in the Real Estate Sector in Azerbaijan
The real estate sector is one of the most profitable types of business in any country. Currently, one of the most favorable areas for investment in Azerbaijan is the real estate sector. There are enough investment opportunities in Azerbaijan in this field. In recent times, the development of the tourism sector has also had a positive impact on the development of the property market.
It is obvious that, running a successful business takes a lot of hard work and time. If you avoid such an active mode of work and want to get high profits with a more passive activity, the most suitable field for you is undoubtedly the real estate sector.
In this regard, it should be noted that foreigners and stateless persons have equal rights when buying and selling real estate in Azerbaijan. That is, foreigners can easily own real estate in the territory of Azerbaijan.
Thus, by owning real estate in Azerbaijan, you can make regular profits without having to work hard and without spending a large part of your day on business development. You can also make your job easier and ensure the most successful outcome for you by entrusting the management of the real estate to local real estate agencies that are experienced and familiar with the market.
IV. Business Opportunities in the Catering Sector in Azerbaijan
As in the whole world, one of the most profitable business areas in Azerbaijan is the catering sector. Although there is strong competition in the market in this field, it is possible to achieve a successful result by providing quality service. In particular, it is observed that catering facilities specialized in a certain field can achieve more successful results. Specialized catering facilities mean, for example, restaurants that offer dishes from Italian and Japanese cuisines. So, when people make a choice, they believe that this catering facility can offer better quality services in the chosen field.
Thus, it is possible to build a successful business in Azerbaijan by opening public catering facilities that offer food from various cuisines such as Japanese, Chinese, Indian, etc., specializing only in these cuisines.
V. Business Opportunities in the Agricultural Sector in Azerbaijan
Agriculture is one of the main and oldest fields of human activity and is in high demand worldwide. Since the 60s and 70s of the last century, as a result of the large-scale “Green Revolution”, both plant and animal husbandry production has intensified at the global level. A clear example of this is the increase of approximately 9 percent of cultivated land around the world during the last 40 years. In modern times, the field of agriculture is experiencing a period of transition from the “Green Revolution” stage to the “Second Green Revolution” stage. This field, which meets such an important need of mankind as food, is a very important part of the economy of all the countries of the world. For this reason, states pay special attention to the development of the agricultural production and processing industry.
The development of this field in Azerbaijan is also under the special attention of the state. Thus, the economic policy of the state is aimed at strengthening the production potential of competitive agricultural and processing industry products in the domestic and foreign markets, improving financing mechanisms in this field, and promoting and supporting exports of relevant products.
Currently, there are quite large tax concessions in the field of agriculture in Azerbaijan. Incomes received directly from the production of agricultural products are exempt from income tax. Also, persons engaged in the production of agricultural products are exempted from VAT, simplified, and profit taxes for 10 years from January 1, 2014. At the same time, according to legislation, tax exemptions and concessions are applied in various fields of agriculture. This economic policy leads to the creation of many business opportunities in the field of agriculture.
On the other hand, gaps in the agricultural market create favorable conditions for establishing a successful business in this field. So, at present, the country cannot fully meet its needs related to agricultural products, and for this reason, these products are imported from different countries. Therefore, you can achieve successful results by engaging in a business that produces or processes agricultural products in Azerbaijan. Also, the geographical position of the country creates conditions for exporting these products to different countries and thus further developing this business.
As the ACON team, we would be glad to provide consulting services to local and foreign investors when creating or investing in a business in the Republic of Azerbaijan!