Table of Contents:

1) Business forms in Azerbaijan

2) What Documents Are Required for Company Registration in Azerbaijan?

3) How to register a Company in Azerbaijan

4) How to register Subsidiary company in Azerbaijan

5) Required Documents for Subsidiary Registration

6) Individual Entrepreneur Registration in Azerbaijan

Company registration in Azerbaijan is the process of obtaining official state registration for businesses planning to engage in commercial activity within the country. Company formation is the first stage for starting business activities in Azerbaijan. Of course, individuals have the legal right to start entrepreneurship without the creation of a legal entity. However, usually, local and foreign individuals and entities prefer business registration to conduct business activities in Azerbaijan. Let’s also note that, as in most countries, the most preferred organizational and legal form for the company in Azerbaijan is the Limited Liability Company (LLC).

Business Forms in Azerbaijan

What is Business Registration?

Setting up a company in Azerbaijan is the official state process of registering a business entity or an individual intending to start a commercial activity in Azerbaijan. This is a mandatory first step to lawfully operate a business in the country. Businesses in Azerbaijan can be registered in two primary forms, as mentioned in the photo above.

Foreigners have the same rights and requirements as Azerbaijani citizens when registering their businesses.

Types of Businesses and Their Legal Structures

Although there are various types of company structures in Azerbaijan, we will mainly focus on two forms — the Limited Liability Company (LLC) and the Joint Stock Company (JSC). Among these, the most commonly used and preferred form by individuals and companies is the Limited Liability Company.

Limited Liability Company (LLC)

A Limited Liability Company (LLC) can be established by one or more individuals or legal entities. The founders’ liabilities are limited to the extent of their shares in the Charter capital. Notably, there is no minimum Charter Capital requirement for LLC registration in Azerbaijan. Entrepreneurs can register an LLC as a Sole Proprietorship or a Partnership.

Joint Stock Company (JSC)

A Joint Stock Company (JSC) is typically chosen for larger business entities. Azerbaijani law defines two types of JSCs:

• Open Joint Stock Company (OJSC)
• Closed Joint Stock Company (CJSC)

What Documents Are Required for Company Registration in Azerbaijan?

To register a company in Azerbaijan, you need the following documents:

Subsidiary Company Registration

A subsidiary in Azerbaijan is considered an independent company and follows the same registration requirements as other company forms. Foreign businesses must legalize certain documents according to international standards when registering a subsidiary.

Many people confuse a Limited Liability Company (LLC) with a Subsidiary Company. A Subsidiary Company is established in Azerbaijan by a foreign legal entity, while an LLC (Independent Company) is created by individuals, whether local or foreign.

The main difference lies in the founders — companies establish subsidiaries, while individuals establish LLCs.

📄 Required Documents for Subsidiary Registration

Understanding the Difference Between an Independent Company and a Subsidiary Company in Azerbaijan

When starting or expanding a business in Azerbaijan, one crucial decision is whether to establish an independent company or a subsidiary company. This choice can significantly impact your business operations, legal obligations, and financial performance. Below, we’ll explore the key differences between these two business structures.

Independent Company in Azerbaijan

An independent company is a standalone entity with full legal autonomy. It operates without being controlled by any other company. Key characteristics include:

• Full Control: An independent company has complete control over its operations, decision-making, and financial management.
• Separate Legal Entity: It is a separate legal entity from its owners, meaning it can own property, enter into contracts, and sue or be sued in its name.
• Tax Obligations: The company is responsible for its own tax liabilities and must comply with Azerbaijani tax regulations independently.

Characteristics of a Subsidiary Company

A subsidiary company, on the other hand, is a company controlled by a parent company, which holds a majority of its shares. Important aspects include:

• Controlled by a Parent Company: The parent company can influence decisions, including management appointments, and financial policies.
• Separate Legal Entity: While a subsidiary is legally separate from its parent, the parent company may still bear some responsibility for its liabilities, especially if it holds 100% ownership.
• Tax Benefits: In some cases, subsidiaries may enjoy tax advantages or be part of a consolidated tax group, depending on the parent company’s structure and international tax treaties.
• Alignment with Parent Company Goals: A subsidiary typically operates in alignment with the parent company’s objectives and may be restricted in terms of diversification or strategic shifts.

How to Register a Company in Azerbaijan: Step By Step

Step 1: Determine the Legal Structure

Choose the legal form of your company. You may also consider registering a branch or subsidiary.

Step 2: Gather and Organize Documents

Gather the necessary documents and pay the associated fees.

Step 3: Fund the Charter Balance

Deposit the required Charter capital. For an LLC, there is no minimum requirement.

Step 4: Submit Documents for Registration

Submit your application to the State Tax Service. The registration process typically takes 2 working days. Upon completion, you will receive a Tax Identification Number, Registration Certificate, and Company Charter.

Step 5: Obtain Necessary Permits

Certain businesses may require additional licenses or permits to operate legally in Azerbaijan.

Step 6: Opening a Bank Account for Your Company

After we receive your company’s founding documents, we will electronically apply to open a bank account in Azerbaijan. This process typically takes 1 to 2 working days.

Individual Entrepreneur Registration in Azerbaijan

Starting your own business as an individual entrepreneur in Azerbaijan? Here’s a straightforward guide to help you through the registration process:

What is Individual Entrepreneur Registration?

Individual Entrepreneur Registration is the process of officially setting up your own business as a sole proprietor in Azerbaijan. This allows you to operate a business under your own name without forming a separate legal entity. However, if you want to live in Azerbaijan as an individual entrepreneur and register as a sole proprietor, you must first obtain a residence permit in Azerbaijan.

Steps to Register as an Individual Entrepreneur

1. Prepare Your Documents:
   • Valid ID (passport or national ID card)
   • Proof of residence
   • Application form
2. Submit Your Application:
   • Visit the State Tax Service or a local registration office.
   • Submit your completed application and documents.
3. Get Your Registration Certificate:
   • Once approved, you’ll receive a registration certificate.
   • This document confirms your status as an individual entrepreneur.
4. Open a Bank Account:
   • Open a business bank account in your name.
   • This is necessary for handling business transactions.
5. Start Your Business:
   • With your registration complete, you can begin your business operations.

In Conclusion: Legal Assistance for Register and Start a Business in Azerbaijan

For assistance with company or subsidiary registration in Azerbaijan, or for consulting services to start a business, contact ACON Consulting. We are dedicated to providing comprehensive legal support and are here to welcome you as a valued client. We are here to help you every step of the way.