Article
3 min read
Author
Anja Simic
Published
August 12, 2021
Last Update
July 04, 2024
Table of Contents
What is a sole proprietorship in Azerbaijan?
The registration process for a sole proprietorship in Azerbaijan
Azerbaijan is a country in the Caucasus region of Eurasia, located at the crossroads of Eastern Europe and Western Asia. Recent legislative development in Azerbaijan regarding companies' registration made the entrepreneurial environment attractive to initiate the business. According to the World Bank Doing Business Report 2018, Azerbaijan has ranked among the top 20 countries in the world, under the starting business category.
A sole proprietorship is an entrepreneurial activity carried out by individuals without establishing a legal entity for the purpose of obtaining income on an individual basis, based on private property, taking on risks and responsibilities.
An individual must have full legal capacity in order to operate a business personally. Full legal capacity is reached at the age of 18. However, a 16-year-old person may engage in entrepreneurial activity with the parent's approval, which amounts to having the full legal capacity in this case.
As in many areas, proper and comprehensive planning of the work you will do in business is the foundation of a successful business. Resources, sales organization, market analysis, and finances are vital for your business to be successful.
After detailed business planning, the sole proprietors are registered by the Ministry of Taxes. There is no fee specified for the registration, and the process can be done online. There is a video tutorial (in the Azerbaijani language) on how to use the e-taxes. These documents are required for the registration:
The tax authority issues the entrepreneur a tax ID (VOEN) used to fulfill the tax obligations.
The VAT rate is 18%. All works, goods, services provided, and taxable imports constitute the base for taxation. VAT registration may be voluntary or mandatory. VAT registration is mandatory if the taxable supplies exceed AZN 200,000 (approximately USD 120,000) in any 12-month period; or the value of a single transaction or contract exceeds AZN 200,000.
VAT registration is also done via the e-taxes website. You will need to fill the Application for the registration of a taxpayer for the purposes of VAT.
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Disclaimer: This article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.
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