Starting a Food Service Business in Azerbaijan

August 19, 2023

Many of us dream of opening restaurants, cafes, coffee shops, bars or starting other types of food service businesses. Concurrently, some plan to expand their existing food service business into new markets. In certain cases, we look towards new countries that hold the potential to realize our entrepreneurial dreams. Expanding businesses to new countries’ markets and starting businesses in new countries has become a trend in our globalized world. Following this trend, there has also been a notable increase in recent years in the number of foreigners starting food service businesses in Azerbaijan, particularly in Baku. We can see numerous restaurants, coffee shops, cafes, pubs, bars and similar food service businesses established by foreign investors in Azerbaijan, especially in the central streets of Baku.

If you’re planning to open your own restaurant, cafe, coffee shop, fast food store, bar or start another type of food service business in Baku, Azerbaijan, we hope this blog post will be informative for you. Accordingly, this blog post provides our business consulting advice on starting a food service business in Azerbaijan. It also covers essential details about legal requirements, regulations, and taxes relevant to this sector. Additionally, for consulting and legal services needed when starting a food service business in Azerbaijan, you can apply for the expertise of DLB Consulting.

Points to Consider When Starting a Restaurant, Cafe, Coffee Shop, Bar or a Similar Business in Azerbaijan:

Business Planning:

Business planning is a significant first step in establishing any venture, especially when opening businesses such as restaurants, cafes, coffee shops or similar enterprise, whether you are starting a business in Azerbaijan or elsewhere. This becomes even more important when starting a food service business in a new country, as it is essential not only for minimizing risks but also for ensuring the business’s success. We strongly advise against underestimating this stage, especially if it’s your first venture into the food service business sector. Furthermore, when planning your restaurant, cafe, coffee shop, or similar business, ensure you conduct thorough market research. Additionally, be sure to develop a detailed business concept or adapt your concept to the local market, as well as engage in comprehensive financial and marketing planning, among other nuances. If you face challenges with business planning or any of its stages, do not hesitate to seek the expertise of business consultants. Keep in mind that the planning of your business forms the foundation of your future success in business.

Legal Requirements and Regulations for Starting a Food Service Business in Azerbaijan:

In terms of legal requirements, it is quite straightforward to open a restaurant, cafe, coffee shop or similar business in Azerbaijan. So, to start a restaurant, cafe, coffee shop, or any similar business in Azerbaijan, legally, it is sufficient to simply register the business. To clarify, unlike in many countries, in Azerbaijan, obtaining specific permissions is not required to engage in any type of food service business. Furthermore, in Azerbaijan, obtaining permits is not required even for the sale of alcoholic beverages in restaurants, bars, pubs, etc. However, this doesn’t imply a lack of legal regulation in the aforementioned business sector. Therefore, it is necessary to comply with standard requirements concerning food quality, safety, technical aspects and more.

As you can see, the legal requirements to start a restaurant, cafe, coffee shop or similar business in Azerbaijan are minimal. However, to reduce legal risks associated with your business activities, we strongly recommend paying attention to certain legal nuances. Firstly, it’s important to get legal advice on the terms of a lease agreement before signing it. Secondly, be sure to register your business trademark right after business registration. In general, we strongly recommend to seek the expertise of lawyers for every legal matter, and remember that neglecting necessary legal details can expose your business to legal risks.

Tax Regulations for Food Service Businesses in Azerbaijan:

As with any type of business activity, tax regulations are also important consideration when starting businesses like restaurants, cafes, coffee shops and similar businesses. Furthermore, it’s evident that high taxes in some countries can raise concerns when starting a business. However, the good news for those planning to start a food service business in Azerbaijan is that the tax rates are relatively low. In the food service business sector, Azerbaijan applies a Simplified Tax rate of either 2% or 8% of turnover. Generally, businesses with an annual turnover of up to 200,000 AZN are subject to a 2% turnover tax, while those exceeding this threshold face an 8% turnover tax. Indeed, while these are general guidelines, we strongly advise obtaining detailed tax consultations according to your specific type of business activity in each case.

How to Open a Restaurant, Cafe, Coffe Shop and a Similar Business in Azerbaijan:

The Process of Opening Food Service Businesses in Azerbaijan:

Business Registration or Obtaining a Tax ID as an Individual Entrepreneur: This is the first legal step to start a food service business in Azerbaijan, whether it’s a restaurant, cafe, coffee shop or any similar venture. To register a company, you simply need to collect the necessary documents, complete the application forms, pay the required fees and submit your application accordingly. Additionally, for your information, to obtain a TAX ID as an Individual Entrepreneur, you can apply either online or offline. However, it’s important to note that having a temporary or permanent residence permit is a must to obtain a TAX ID as an Individual Entrepreneur in Azerbaijan.
Opening Bank Accounts and Obtaining a Digital Signature (ASAN IMZA): Once your business is registered, the process of opening bank accounts typically takes two to three working days. Additionally, obtaining a Digital Signature (ASAN IMZA) for your company only takes one working day. This enables you to perform numerous online operations on behalf of your company.
Leasing a Commercial Space: You’ll need to rent a commercial space to start your food service business in Azerbaijan, whether it’s a restaurant, cafe, coffee shop or a similar venture.
Obtaining a POS Terminal and Cash Register: It is legally necessary to obtain a POS Terminal and Cash Register for the restaurants, cafes, coffee shops and similar businesses.
Start the Business Activities: Once all necessary stages are completed, your food service business is ready to start operating in Azerbaijan.

We hope you found this article informative, with valuable business consulting details and advice for starting a restaurant, cafe, coffee shop or a similar business in Azerbaijan. If you need business consulting and legal services for launching your food service business in Azerbaijan, consider reaching out to DLB Consulting.

Read More: