Successfully investing in Azerbaijan

PrintMailRate-it

last updated on 27 May 2020 | reading time approx. 2 minutes

 

 

How do you assess the current economic situation in Azerbaijan?

Azerbaijan has very large oil and natural gas deposits, which are located below the Caspian Sea. For this reason, the economic situation in Azerbaijan is very much dependent on the development of the oil price. Economic growth of 1.4 per cent was recorded in Azerbaijan in 2018. The economy grew by 2.2 per cent in 2019 and an economic growth of 2.4 per cent was expected for 2020. On a positive note, the non-oil sector was the main contributor to economic growth in 2019.
 

How would you describe the investment climate in Azerbaijan? Which sectors offer the largest potential?

The investment climate in Azerbaijan is good. In the international ranking “Doing Business 2020” Azerbaijan ranks 34th out of 190 countries, which are examined for their economic friendliness. Azerbaijan received a particularly positive rating in the categories of business creation and loan maintenance.

 

As is well known, the economy of Azerbaijan is focused on oil and gas production and processing of these raw materials. Nevertheless, the Azerbaijan government has set itself the goal to diversify its economy in the next few years. Above all, the non-energy sectors are to be developed and the infrastructure is to be expanded. Above all, the government of Azerbaijan wants to focus more on the development of the following industries:

  • Agriculture;
  • Logistics;
  • Tourism;
  • Environmental engineering;
  • IT sector;
  • Transport
  • E-commerce.

   

All of these sectors offer very good investment opportunities and great potential for foreign investors.

   

What challenges do German companies face during their business ventures into Azerbaijan?

Foreign investors mostly complain in Azerbaijan about the still dominant monopoly economy, the bureaucracy in the authorities and the still relatively high level of corruption that affects normal business processes. Nevertheless, the situation in these areas unfortunately does not improve as quickly as would be desirable.

       

For Germany, Azerbaijan is the most important economic partner in the Caucasus. What importance does Germany have for Azerbaijan?

Germany is one of Azerbaijan´s most important trading partners. Germany mainly exports machines, motor vehicles, automotive parts and chemical products to the country. Azerbaijan mainly exports oil to Germany. In 2019, German exports to Azerbaijan increased by 1.4 per cent. The sales volume was 440 mio. Euros. Oil imports decreased by 6.5 per cent in 2019 and amounted to 1.3 billion Euros.
 

In your opinion, how will Azerbaijan develop?

Given the low oil and gas prices as well as the corona pandemic and the associated lockdown, it is very difficult to make binding statements as to how Azerbaijan will develop in 2020. In the long term, however, Azerbaijan will remain an interesting location with lots of resources, good infrastructure and an important geopolitical location.

Contact

Contact Person Picture

Elchin Usub

Associate Partner

+994 12 5944 351
+994 12 5944 359

Send inquiry

Contact Person Picture

Klaus Kessler

Partner

+380 44 5862 303
+49 911 9193 9058

Send inquiry

 How we can help

 Article series

We use cookies to personalise the website and offer you the greatest added value. They are, among other purposes, used to analyse visitor usage in order to improve the website for you. By using this website, you agree to their use. Further information can be found in our data privacy statement.
Deutschland Weltweit Search Menu