Azerbaijan Country Presentation

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1 Azerbaijan Country Presentation Rufat Mammadov AZPRPOMO

Favourable Location Azerbaijan is the country on the

Independence: 18 October 1991 I Official Language:

2 Favourable Location Azerbaijan is the country on the crossroads of Eurasia I Establishment: 28 May 1918 I Independence: 18 October 1991 I Official Language: Azerbaijanian I Political system: Presidential Republic I Area: 86.6 ths. sq. km. I Population: 9 million I Capital: Baku I Autonomous Republic: Nakhchivan I Currency: Manat * * (0.8 AZN=1 USD)

3 Interesting facts I First Baku oil boom I Nobel s first Kerosene factory I 1846 first hand-dug oil wells I First Baku-Batumi Pipeline I Nobel s distribution system I First rail tank cars

4 Macroeconomic figures GDP growth rate 9,3 % GDP per capita ($) Investments ($) 9.1 bln FDI ($) 2.9 bln Inflation 1,5 % Unemployment rate 4.6% Poverty level 11% Average monthly salary ($) 372 GDP growth 9.3% Income growth rate per capita productivity Unemployment rate 4,6% 6,7% Average monthly salary 372 $ Inflation 1,5%

Economic reforms Methodology Starting a business Employing workers Registering Property Protecting investors Enforcing contracts The Doing Business

5 Economic reforms Methodology Starting a business Employing workers Registering Property Protecting investors Enforcing contracts The Doing Business project provides objective measures of business regulations and their enforcement across 183 economies and selected cities at the subnational and regional level.

Country Ratings Rating Parameters 2010 Payment balance Stability of local currency I Long term credit rating: BBB - (Investment Grade) I Short-term credit rating: F3 Solvency State budget *Azerbaijan

6 Country Ratings Rating Parameters 2010 Payment balance Stability of local currency I Long term credit rating: BBB - (Investment Grade) I Short-term credit rating: F3 Solvency State budget *Azerbaijan was BB+ and B, which is an average value equivalent to 13th place out of 27 Macroeconomic indicators The Fitch Ratings Leading global rating agency committed to providing the world's credit markets with independent, timely and prospective credit opinions. Political stability

7 One-stop-shop Type of legal entity: I Banks, stock exchanges, insurance companies, branches of foreign legal entities I Agricultural business I Other legal entities Duty: 220 AZN 3 AZN 11 AZN Statistical Committee Effective

8 Taxation I Corporate Tax 20% I Value Added Tax 18% I Simplified Tax 4% and 2% I Agriculture Tax I No limits on the Repatriation of profits I Inheritance and Gift Tax

metals and products Pharmaceuticals Wood and products Other I More than 40 Free Trade

9 Foreign Trade (import) 2009 I Trade turnover I Import 20.8 bln US dollars 6.1 bln US dollars Machinery, equipment Vehicles and spare parts Foodstuffs Ferrous metals and products Pharmaceuticals Wood and products Other I More than 40 Free Trade Agreements I 138 trade partners I GSP, GSP + (Generalized system of preferences) I WTO negotiations process

10 Foreign Trade (export) I Trade turnover I Export 20.8 bln US dollars 14.7 bln US dollars 2009 Raw oil and petrochemicals Fruit and vegetables Plant and animal oil Ferrous metals and products Chemical industry products Cotton Aluminum and products Alcoholic and non-alcoholic beverages Tobacco and products Other

11 Why invest in Azerbaijan? POLITICAL & FINANCIAL STABILITY Good climate and welcoming culture Well-developed infrastructure Abundant resources

12 Abundant resources I 9 out of 11 climatic zones I Mild winters and hot summers I Rich mineral and climatic resources I Ferrous and non-ferrous metals I Raw construction materials

13 Well-developed infrastructure I Logistical hub for Asia Europe, Middle East CIS I 2 nd largest port in the Caspian Sea I Developed rail infrastructure I Easy access to the Black Sea region I Baku Tbilisi Kars railroad (The Iron Silkway)

6%) I Excellent IT and foreign languages skills I Human resources

14 Low-cost and skilled labor force 2009 I 372 USD Average monthly salary I Entrepreneurial culture I High literacy level (99.6%) I Excellent IT and foreign languages skills I Human resources development strategy/ State Program on education abroad ( ) * Source: The State Statistical Committee

15 Where to invest in Azerbaijan? Agriculture/ food industry Alternative energy Tourism Construction

16 Where to invest in Azerbaijan? Chemical industry ICT Transportation and logistics Light industry

Leading FDI destination I National Legislation Law on

Law on Special Economic Zones I International Agreements

Institutional Support Azerbaijan and Export and Investment

17 Leading FDI destination I National Legislation Law on Investment Activity Law on Protection of Foreign Investments Law on Special Economic Zones I International Agreements Avoiding of double taxation Bilateral treaties I Government Institutional Support Azerbaijan and Export and Investment Promotion Azerbaijan Investment Company National Fund for support of Entrepreneurship

18 About AZPROMO I Azerbaijan Export and (AZPROMO) was established by the Ministry of Economic Development in 2003 I AZPROMO Vision: Balanced growth of economy I AZPROMO Mission: To sustain economic growth by maximizing the flow of non-oil extraction FDI and development of export oriented sectors I Main directions of activities: Investment and Export Promotion

visits, organisation and providing information I Investor servicing + aftercare Helping investors get established and be

19 I Image building marketing campaigns (perception=reality), communication strategy I Investment generation Identification of potential investors, marketing campaigns, presentations, seminars, road shows I Investment facilitation Investment information, site visits, organisation and providing information I Investor servicing + aftercare Helping investors get established and be operational, expansion and re-invest I Advocacy+strategy formulation Advocating for investment friendly business climate, inputs to national FDI policy

Export Promotion I New exporters Consultancy, assessment of export capabilities,

price research, trade shows/fairs research I Looking for new customers Search for new

building Trade shows/fairs, PR activities abroad, outward foreign investment,

20 Export Promotion I New exporters Consultancy, assessment of export capabilities, training and guidance I Entering a new market Market information, legal analysis, price research, trade shows/fairs research I Looking for new customers Search for new business contacts, matchmaking and sector/product events, trade missions I Image building Trade shows/fairs, PR activities abroad, outward foreign investment, international relations I Policy advocacy Advice in foreign trade policies and input on export regulations

21 Foreign Network I AZPROMO Georgia Mission: Support in development of economic and business relations between Azerbaijan and Georgia I Main activities Market researches and analyses Legal framework in Georgia Business consultancy Public relations, country promotion I Partners and proxies 2 Memorandums of Understanding in 2010 Membership in the World Association of Agencies (WAIPA) Steering Committee and Regional office for Central Asia and South Caucasus Diplomatic/Trade missions and Chambers of Commerce

22 Investment Project I Baku White City

23 Investment Project I Tile Production Factory

24 Investment Project I Industrial line of solar modules and collectors

25 Investment Project I Baku Garden City

26 Success Story

27 Thank you for the attention! Azerbaijan Export and (AZPROMO) 11, H. Abdullayev str., Baku, Azerbaijan Tel.: (+99412) /48; Fax: (+99412)

Azerbaijan Export and Investment Promotion Foundation. Azerbaijan Country Presentation

Azerbaijan Export and Investment Promotion Foundation. Azerbaijan Country Presentation Azerbaijan Country Presentation Basic information I UN Security Council non-permanent member for 2012-2013 I Establishment: 28 May 1918 I Independence: 18 October 1991 I Official Language: I Political