Starting IT Business in Baku, Azerbaijan

October 25, 2023

Starting an IT business is a significant part of the plans for many business people and those working in the IT field. At times, our focus turns towards new countries that present great potential for realizing these business plans. Certainly, we typically decide on the country to start a business in the IT field by considering factors such as current market demand, tax considerations, and similar nuances. It’s also true that the flexibility of doing business online in various IT businesses simplifies the process of starting and operating our business in countries that offer more favorable conditions. In the line with this trend, over the past five years many foreign businesspeople have increasingly turned to Azerbaijan to launch their business in the IT Sector. The business environment and opportunities, along with low taxes, tax concessions, and exemptions in Azerbaijan, are among the factors encouraging entrepreneurs to start an IT business here.

If you are also planning starting a business in the IT field in Azerbaijan, we believe this blog post will provide you with valuable information. It aims to offer business consulting advice on starting an IT Business in Azerbaijan, including also essential details about the legal requirements, regulations and taxes relevant to this sector. Furthermore, if you need consulting and legal services to start a business in the IT field in Azerbaijan, you can apply for the expertise of DLB Consulting.

Points to Consider When Starting a Business in the IT Sector in Azerbaijan:

Business Environment and Opportunities. Business Planning:

Azerbaijan, a country with significant business opportunities in the field of IT Sector, has only recently been discovered by the international IT business community. So, substantial tax concessions and exemptions are offered for certain types of business activities in the IT sphere in Azerbaijan. Additionally, businesses in the IT field, unlike other sectors, can more easily employ professional foreign workers by obtaining work permits. It’s also worth noting that, especially in recent years, we are witnessing a growing trend where both state institutions and large corporations are increasingly seeking the expertise of foreign professionals and companies for essential IT services. This, in turn, is related to the high demand for IT services, as well as the intention to obtain more professional IT services.

Taking all these considerations into account, we strongly recommend Azerbaijan to those thinking about starting an IT business. However, remember that in any case, before starting a business, it is recommended to get a business consultation, as well as plan the business. If you require business consulting and business planning services to start your IT business in Azerbaijan, do not hesitate to seek the expertise of DLB Consulting.

Legal Requirements and Regulations for Starting a Business in the IT Sector:

In terms of legal requirements, it is quite straightforward to start a business in the IT Field in Azerbaijan. So, to start an IT business in Azerbaijan, legally, it is sufficient to simply registering the business. IT Businesses are not required to obtain any type of specific permissions for the business activities. Additionally, as noted earlier, unlike other sectors, IT Businesses in Azerbaijan can more easily employ professional foreign workers by obtaining work permits. This privilege is related to the demand of IT businesses in Azerbaijan for professionals.

As you can see, the legal requirements to start a business in the field of IT in Azerbaijan are minimal. However, to reduce legal risks associated with your business activities, we strongly recommend seeking the consultation of lawyers for every legal matter. Remember that neglecting necessary legal details can expose your business to legal risks.

Tax Regulations in Azerbaijan for the Businesses in the IT Field:

The standard Simplified Tax rate for businesses in the field of IT is 2% of their turnover, and the standard Profit Tax rate is 20%. For micro businesses in the field of IT, the Profit Tax rate is in the range of 5%. If your IT business is a VAT payer, it’s important to note that the standard VAT rate in Azerbaijan is 18%. However, it’s essential to mention that significant tax concessions and exemptions are available for IT businesses in Azerbaijan under specific conditions. Indeed, certain business categories and activities in the field of IT are even exempt from all taxes. For instance, IT companies that obtain a Startup Certificate in Azerbaijan are tax-exempt for a designated period. While these are general guidelines, we strongly recommend seeking detailed tax consultations according to your specific type of business activity in the field of IT in Azerbaijan.

How to Start an IT Business in Azerbaijan:

The Process of Starting an IT Business in Azerbaijan:

Business Registration or Obtaining a Tax ID as an Individual Entrepreneur: This is the first legal step to start an IT Business or any other in Azerbaijan. To register a company, you are simply required to collect the all necessary documents, complete the application forms, pay the required fees and apply 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 IT business is registered in Azerbaijan, the process of opening bank accounts typically takes only two to three working days. Additionally, obtaining a Digital Signature (ASAN IMZA) for your company takes just one working day. The Digital Signature (ASAN IMZA) enables you to perform numerous online operations on behalf of your company.
Start the Business Activities: Once all necessary stages are completed, your IT business is ready to start operating in Azerbaijan.

We hope you found this article informative, with valuable business consulting and also legal details and advice for starting an IT Business in Azerbaijan. If you need business consulting and legal services for starting a business in Azerbaijan in the IT field, consider reaching out to DLB Consulting.

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