Doing Business in Azerbaijan
Azerbaijan has experienced impressive economic growth over the past two decades and foreign investment has been encouraged and welcomed. Expats doing business in Azerbaijan will, therefore, find themselves in a friendly and hospitable business environment.
The economy is centred on the country’s oil and gas industry and it is within this sector that most foreigners will find themselves working in Azerbaijan. However, the government has tried to diversify the economy in recent years, and other business opportunities exist within the agricultural, construction, education, communications and tourism sectors.
The capital, Baku, is the centre of business in Azerbaijan. It’s viewed as the most Western of Azerbaijan’s cities, and where most expats working in Azerbaijan are based. Despite high oil revenues, the gap between rich and poor has widened and wealth is increasingly held in the hands of a small elite. Despite regulatory improvements and legislative reforms, corruption also continues to plague the country and can affect business dealings. Nevertheless, Azerbaijan has seen much development of its infrastructure and experienced improved services in recent years.
Azerbaijan is viewed as a relatively easy destination in which to do business and in recent years has fared well in international business surveys. The country achieved a rank of 25 in The World Bank’s Ease of Doing Business Survey for 2019. There was a slight improvement on factors such as starting a business and dealing with construction permits.
Business hours are usually Monday to Friday, 10am to 6pm. Some government offices are open on Saturdays. Azeris have an alternate view of punctuality and it’s not unusual to start meetings late.
Azerbaijani (Azeri) is the official language of business in Azerbaijan. Russian is also widely spoken. Although English is increasingly being used in business, it is not common and it’s best to hire an interpreter when doing business in Azerbaijan.
It is customary for men to greet each other with a handshake. Businesswomen may also greet with a handshake, but it’s best to wait for a woman to extend her hand first.
Both men and women usually dress in Western-style clothing. Business attire is formal and conservative.
Gifts generally won’t be opened immediately.
Although Azerbaijan practises gender equality, there are still few women in high-level corporate positions. The country remains quite traditional in terms of gender roles.
Business culture in Azerbaijan
Azerbaijan is a hierarchical society and status is important. This is carried through into business dealings. Decision-making can be a time-consuming affair, so expats doing business in Azerbaijan should learn patience.
Building relationships is essential to doing business in Azerbaijan. Azeris will always do business with those they know well and trust. Networking is therefore essential as many business deals are done through personal recommendations. It’s therefore important to first strike up a rapport with local business associates in order to build their trust.
Although English is becoming more common in business circles, the two main languages are Azeri and Russian, and expats seeking to do business in Azerbaijan would do well to try to learn at least a few key phrases in these languages. An interpreter may be necessary when conducting business meetings in Azerbaijan.
It is customary to begin a meeting with casual conversation about work and family before getting to the formal side of things. Azeris are tough negotiators, so be prepared to bargain and haggle. But first, establishing a friendly relationship is paramount to doing business in Azerbaijan. Time is viewed differently in Azerbaijan, and it’s not unusual for business meetings to begin late.
Although there has been a privatisation drive in recent years, many businesses are still state-owned, so expats are likely to deal with government officials at some point or another during their business dealings in Azerbaijan. Corruption remains an unfortunate reality of business in Azerbaijan, and expats should be wary of any corrupt dealings while conducting their business.
Dos and don’ts of business in Azerbaijan
Don’t discuss politics with local business associates; criticism of the leading regime should be avoided at all costs. The issue of Azerbaijan’s relationship with Albania and ongoing conflict over the Nagorno-Karabakh region should also be avoided.
Do be punctual for meetings, even though local associates may not have the same attitude towards punctuality.
Do learn a few key phrases in either Azeri or Russian, as English is not widely spoken outside of the oil and gas sector, and an interpreter may be required when conducting business in Azerbaijan.
Do begin meetings with friendly talk about issues other than business such as family; this can go a long way to building a good relationship and trust before any business is dealt with.