Azerbaidjan: Invertir a Azerbaidjan
According to UNCTAD's 2021 World Investment Report, FDI inflows fell by 66% to USD 507 million in 2020, as a result of the global economic crisis triggered by the Covid-19 pandemic. Lockdown measures to contain the impact of the pandemic have weighed on economic activity. In addition, the negative effects of low oil prices - which account for almost nine-tenths of exports - have hit the pipeline of new greenfield projects in the sector. A number of foreign investors have embarked on renewable energy projects. Among others, ACWA Power (Saudi Arabia) has signed an agreement with the government of Azerbaijan to build, own and operate a 240 MW wind farm for USD 216 million, in order to diversify the country's energy mix. FDI inward stocks in Azerbaijan were estimated at USD 32.8 billion in 2020. Azerbaijan inflows focus on the oil and gas sector, although one of the top priorities of the Azerbaijani Government is to diversify the country’s economy and attract FDI to agriculture, transportation, tourism and information/communication technology. Russia is the main source of FDI, but beyond that Azerbaijan is part of the customs union between Russia, Kazakhstan, Armenia and Belarus that, in terms of volume, is the most important in the region and is almost exclusively involved in major projects for oil/gas pipelines and related services.
The Azerbaijani Government has stressed the importance of improving the business climate. The country ranks 34th out of 190 countries in World Bank's latest Doing Business rankings, falling by nine spots from the previous edition. To promote investments, Azerbaijan established a single online portal to issue business licenses and permits. This was against a backdrop of slow structural and anti-corruption reforms. Nonetheless, the country was also designated as one of the top 20 reformer countries by the UNCTAD for its efforts on registering property, obtaining credit, protecting minority investors, and enforcing contracts. Russian invests heavily in Azerbaijan's construction, trade, services, banking, insurance, information technologies, transportation and agriculture sectors. The EU has prioritized the construction of the Southern Gas Corridor, which would transport Azerbaijani gas through Georgia, Turkey, and Europe. Under the recently amended Customs Tariff law, entrepreneurs importing capital equipment for priority sectors will be exempted from taxes for up to seven years. Following the release in 2021 of a tripartite ceasefire declaration by Armenia, Azerbaijan, and Russia over the conflict in the Nagorno-Karabakh region, the Azerbaijani government is seeking new investments in the nearby territories that were previously under the control of Armenian-backed separatists. The problem of corruption remains unresolved and may act as an impediment to the country's development. Azerbaijan ranked 128th out of 180 countries on Transparency International's Corruption Perceptions Index 2021.
Foreign Direct Investment | 2019 | 2020 | 2021 |
FDI Inward Flow (million USD) | 1,504 | 507 | -1,708 |
FDI Stock (million USD) | 32,285 | 33,186 | 31,607 |
Number of Greenfield Investments* | 20 | 6 | 3 |
Value of Greenfield Investments (million USD) | 741 | 325 | 43 |
Source: UNCTAD, Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Country Comparison For the Protection of Investors | Azerbaijan | Eastern Europe & Central Asia | United States | Germany |
Index of Transaction Transparency* | 10.0 | 7.5 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 7.0 | 5.0 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 8.0 | 6.8 | 9.0 | 5.0 |
Source: Doing Business, Latest available data
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
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Actualitzacions: January 2023