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Obtaining a Temporary Residence Permit (TRP) in Azerbaijan by starting a business

August 16, 20220

One of the grounds for obtaining a temporary residence permit (TRP) in the Republic of Azerbaijan is that a person holds the position of head and deputy of a company (business) reg in the Republic of Azerbaijan and whose founder or at least one of the founders is a foreign company or natural person. In other words, starting in business activity in the territory of the Republic of Azerbaijan is the basis for obtaining a temporary residence permit (TRP). Thus, a person who has registered a company and is started a business in the Republic of Azerbaijan can apply for a temporary residence permit(TRP). State policy is aimed at the development of business activity in the country, encouraging people to start a business. For this reason, the process of establishing a company is convenient and does not require a long time. However, the creation of a company is not enough to obtain a temporary residence permit. This blog post will discuss how to get a temporary residence permit (TRP) in Azerbaijan by starting a business, what stages this process consists of, and other legal issues related to the process.

I. Company Registration

The first step for obtaining a temporary residence permit (TRP) in Azerbaijan is the registration of a company. When registering a company, its charter must be prepared. If at this time there are several founders, they conclude a contract and determine the legal entity’s charter, the procedure for joint action on its establishment, the conditions for transferring their property to it, and participating in its activities. To obtain the status of a legal entity, the company must be entered into the state register. Representative offices or branches and other institutions of companies registered in the Republic of Azerbaijan must also be entered into the state register.

A. Charter and Authorized Capital of a Company

There are different types of commercial legal entities. In many cases, the establishment of limited liability companies is preferred. In the charter of a limited liability company, the amount of the charter capital of the company, as well as the share of each participant, the composition of the funds invested by them and the procedure for investing funds, the responsibilities of the participants for violating the obligations on the investment of funds, the composition and authority of the management bodies of the company, their decision-making,

as well as the conditions on the procedure for making decisions on the issues on which decisions are taken unanimously or by the conditioned majority of votes should be specified.

The authorized capital of a limited liability company consists of the value of the capital of its participants. The charter capital determines the minimum amount of property that guarantees the interests of its creditors. The legislation does not specify any minimum requirements for the amount of authorized capital. Nevertheless, the amount of capital should not be less than the amount that guarantees the interests of creditors.

If the charter of the company does not provide for the payment of the charter capital for a certain period, the founders must pay the charter capital in full until the company is state registered. If the charter of the limited liability company stipulates a period for the payment of the authorized capital, this period cannot exceed three months.

The authorized capital of the company can be increased only after its full payment, at the expense of the company’s property, proportionally increasing the value of the participants’ shares in the authorized capital, or by placing additional shares by the participants, or at the expense of new participants admitted to the company.

B. State Registration of Company

To obtain state registration of an institution that wishes to receive the status of a company, an application must be submitted to the State Tax Service under the Ministry of Economy of the Republic of Azerbaijan. The application must be signed by the founder, legal representative, or their duly authorized representative and notarized. If a founder is a natural person, his/her name, surname, father’s name, place of residence, identity document number, and date of issuance should be indicated in the application. If the founder is a company, his/her name, location, and registration number are indicated.

The following documents are attached to the application:

  • constituent documents – the charter approved by the founder or its authorized representative of the organization seeking to obtain legal entity status, decisions on the establishment of this organization, approval of its charter, and formation of management bodies;
  • document on payment of state duty;
  • if the founder is a company – a notarized copy of its state registration certificate (extract from the state register) and articles of association, and if this is a natural person, a copy of his/her identity document;
  • a copy of the document confirming the identity of the legal representative;
  • a document confirming the payment of the charter capital in funds;
  • document about approval of the nomination of the head and his deputy of the educational institution whose founders are foreigners, stateless persons, or foreign companies, including more than 51 percent of the authorized capital or shares which are owned by foreigners, stateless persons, or foreign companies, with the body determined by the relevant executive authority.

It is submitted along with a copy of the application. The original of the application is kept in the relevant executive authority of the Republic of Azerbaijan, and the copy is returned to the applicant with a note indicating the time of acceptance of the original of the application. Acceptance of the application may be confirmed in any other form.

In addition to these documents for the state registration of a foreign-invested company seeking to obtain the status of a legal entity, if the founder is a foreign company, a document confirming its registration – extracted from the trade register, registration certificate, etc. must be submitted. In this case, that document must be legalized by the diplomatic representation of the Republic of Azerbaijan in the country where the company is located or by the diplomatic representation of another country representing the interests of the Republic of Azerbaijan in this country in the manner prescribed by the legislation.

II. Tenancy Relations

One of the basics of doing business is related to finding a place suitable for the direction of activity. In this regard, the next legal issue that a person may face is how to regulate the tenancy. The relations between the lessor and the lessee are regulated based on a notarized lease agreement.

The amount of rent and the order of payment are specified in the contract. Unless otherwise specified in the lease agreement, depreciation deductions from the value of the leased property are included in the rent. When reproduction of the leased property is carried out entirely by the lessee, depreciation deductions are not given to the lessor and belong only to the lessee. When prices, tariffs, fees, or depreciation norms regulated by the government change, when the rate of inflation increases sharply, one of the parties may request a change in the rent amount.

If the conditions of the use of the property stipulated in the contract or the condition of the property deteriorate due to reasons for which the lessee is not responsible, the lessee may request a reduction of the rent. In addition to the rent, the tenant must also pay taxes and other payments, which are not included in the lessor’s duties, provided for in the legislation of the Republic of Azerbaijan.

Leasing the property does not lead to the transfer of ownership rights over this property. However, the lessee owns the products and income obtained as a result of the use of the leased property, as well as the property obtained due to the income received from the leased property. If with the consent of the lessor, non-movable buildings and facilities are built at the expense of the lessee in the leased area, they belong to the lessee. When the contract expires or the contract is terminated, the lessor must pay the lessee the market value of those buildings and facilities. However, if these buildings and facilities are built without the consent of the lessor, they are considered to belong to the lessor.

Reorganization of the leasing organization, as well as the change of the owner of the leased property, are not grounds for changing the terms of the contract or breaking it.

After the contract expires, the tenant can request to renew the contract. If there is no application of one of the parties to terminate or change the contract after the expiration of its term, it is considered to be extended for the same period and under the same conditions as stipulated in the contract.

III. Additional Requirements Related to Starting a Business in Azerbaijan

Another thing to consider when starting a business is the need for licenses and permits depending on the type of activity. Licensing and permits are required for activities that affect state security, involve the use of limited natural resources, can hurt the ecological state of the environment, and pose a threat to the life, health, and property of an unlimited number of people. Licenses are required for disposal, neutralization of toxic industrial waste, private medical activity, private veterinary service activity, pharmaceutical activity, educational activity, communication services, etc. types of activities such as.

A. Application for License and Permit

To obtain a license and permit, an application must be submitted to the license and permit granting authority by the Law of the Republic of Azerbaijan “On Administrative Proceedings”.

The following documents are attached to the application:

  • if the applicant is a company, a branch, or representative office of a foreign company, a copy of the extract from the state register of a company;
  • if the applicant is an individual entrepreneur, a copy of the identity card;
  • a copy of the certificate of registration of the applicant as a taxpayer;
  • a copy of the document confirming the applicant’s ownership, use, or lease right over each of the facilities mentioned in the application (if the activity for which a license is required and the activity for which a permit is required are related to the facility);
  • documents confirming the fulfillment of license and permit conditions.

It should be noted that the licensing and permitting authority uses electronic information resources maintained by state bodies and other institutions to obtain information about these documents. In cases where this is not possible, the applicant is required to submit those documents.

The state fee or payment for the issuance of the license and permit shall be paid by the applicant within 5 working days from the date of receipt of the information provided by the licensing and permitting authority, and the document confirming the payment shall be submitted to that authority.

B. Grant of License and Permit

At the next stage, the compliance of the application submitted by the applicant and the documents attached to it with the requirements of the legislation is checked. If deficiencies that can be eliminated in the application and the documents attached to it are found, and which do not lead to the refusal of the license, the license and permitting authority shall provide the applicant with information on their elimination or send it by registered mail no later than 5 working days from the date of registration of the application, and explains to him the legal consequences of non-compliance with formal requirements.

The applicant must eliminate those deficiencies no later than 10 working days after receiving the information. At this time, the flow of the period related to the issuance of the license is suspended, and the suspended period is not included in the period of issuance of the license. After the applicant’s request to eliminate the deficiencies, the period is restored. If the applicant does not eliminate these deficiencies promptly, an administrative act on keeping the application pending is adopted and information about this is provided to the applicant within 2 working days. The applicant may re-apply for the license and permit after eliminating the identified deficiencies. In this case, it is not required to re-submit the documents and information submitted during the previous special license issuance, as well as the approved documents, legal and factual circumstances are not re-checked. After reviewing the submitted application and the documents attached to it, the licensing authority issues the license or adopts an administrative act on refusal to issue it no later than 10 working days from the date of registration of the application. For permits, this period is 7 days.

If the application and the documents attached to it contain information that does not comply with the law, or if the applicant does not fulfill the required conditions, the license and permit will be refused and administrative action will be drawn up. The applicant can file a complaint against that act administratively and to the court.

IV. Issuance of Temporary Residence Permit (TRP) for the ones starting a business in Azerbaijan

After creating a company, the company’s founding documents and other documents are collected and an application is made for a temporary residence permit(TRP) in Azerbaijan. These documents are:

  • application questionnaire, a sample of which has been approved by the relevant executive authority;
  • copy of passport or other border crossing document;
  • a document confirming the existence of circumstances that are the basis for issuing a temporary residence permit in a notarial manner or equivalent manner;
  • a certificate that the person is not a carrier of the disease virus specified in the list of dangerous infectious diseases approved by the relevant executive authority;
  • copy of the document granting the right to temporary stay or temporary residence in the territory of the Republic of Azerbaijan;
  • two photos of 3.5×4.5 cm in size;
  • document of the residential area to be registered;
  • application of a person who provides a residence to a foreigner or stateless person;
  • a copy of the identity document of the person providing the residence to a foreigner or stateless person;
  • document on payment of state duty.

Documents are submitted in the form of an electronic application. Then, the relevant executive body gives an opinion on the application for a temporary residence permit within 10 working days. If the relevant opinion is not given within 10 working days, it is considered as no objection to the issuance of the temporary residence permit.

If the requirements are not met, the application for a temporary residence permit is rejected. Such grounds include less than 3 months remaining before the validity period of the passport or other border crossing document expires, the person being a carrier of the disease virus specified in the list of dangerous infectious diseases approved by the relevant executive authority, violates the declared purpose of coming to the Republic of Azerbaijan during the period of temporary residence in the territory of the Republic of Azerbaijan, and other grounds.

Therefore, the mere formal existence of a company is not enough to obtain a temporary residence permit based on establishing a business. When considering the application on this basis, the real activity of the company, the steps taken for business purposes during this period are investigated, the authenticity of the business activity is checked, and if no real activity is found, the application is rejected. Thus, simply creating a company does not constitute any basis for issuing a temporary residence permit. For this reason, it is advisable for people who intend to do business to apply for a temporary residence permit on this basis.

As the ACON team, we are pleased to provide consulting services related to obtaining a permanent and temporary residence permit, and work permit in the Republic of Azerbaijan!

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