Exporting to Azerbaijan

Azerbaijan, or officially the Republic of Azerbaijan, is a partially Turkic country located between Western Asia and Eastern Europe with a population of 10 million. Rich in underground resources, Azerbaijan has a significant economy as the world's ninth-largest oil producer. Azerbaijan, which ranks as the 39th country in Turkey's foreign trade activities, has many commercial agreements with our country. These agreements facilitate trade exchanges between the two countries while also serving as an incentive for investors and companies.

Ranking 77th in the world economy classification, Azerbaijan, thanks to its developed oil reserves, is a country with advanced commercial relationships. Let's take a close look at the essential factors to consider regarding what needs to be done and the pathway to be followed in Turkey’s export to Azerbaijan.

How to Export to Azerbaijan?

In the context of exporting to Azerbaijan, the first thing that should be looked at thanks to today's technology is the e-commerce sites and user behaviors on these sites. Understanding the general structure and the audience is one of the most critical factors in selling your products and increasing your performance. The countries located within the borders of Azerbaijan are influenced, and countries like Russia and Georgia also show interest in their products. According to 2019 data, 81% of the country's population uses the internet, offering significant opportunities for Turkish retailers and export companies. With over 32% of users, average sales per user on e-commerce sites exceed $122. This situation facilitates the entrance of companies that will export to Azerbaijan into the market.

In this period where e-commerce and e-export sites are rapidly increasing and developing, making the right financial decisions, following strategic paths, and getting to know the audience and the market can become challenging. As ODS Consultancy, we stand by your side as a second perspective in making the most beneficial decisions for your company in line with your vision, contributing to your growth.

What Firms Export to Azerbaijan?

The relations between Azerbaijan, which we also consider as a brother country, and Turkey have always progressed positively over the years. This situation reflects in economic and political developments and has favored Turkish companies in foreign trade. Many Turkish companies send hundreds of products from different sectors to Azerbaijan. The country, which is also in focus for investors, has always had an important position for Turkey. In Turkey's exports to Azerbaijan, aircraft and their parts stand out, followed by the chemical products and furniture sectors. Azerbaijan, to which we export over 2.3 billion dollars, is purchasing more products from Turkey every year.

What Documents are Required for Exporting to Azerbaijan?

• To be able to export to Azerbaijan, you must establish a company and carry out all your commercial activities under the documents and regulations of this company.
• According to the Rules of the Republic of Azerbaijan for the Regulation of Import-Export Transactions, companies wishing to operate in their own currencies must obtain permission from authorized institutions and tax organizations in Azerbaijan.
• Permission from the Council of Ministers is required for the trade of strategic goods (weapons, gunpowder, explosive substances, etc.).
• The control standards of the products are conducted under the GHOST standards and are associated with the Ministry of Standardization of the Republic of Azerbaijan. Necessary permits and certifications must be prepared.
• The exported product must have product details written on it, and general information must be provided in the Azerbaijani language.
• If requested, a certificate of origin of discretion must be arranged. This document is proof that the exported product is produced in the originating country.
• International cargo and delivery documents should be prepared and submitted to the relevant cargo companies.
• For products to be sent under micro-export, obtaining ETGB (Electronic Trade Customs Declaration) is mandatory.
• Commercial invoices should be prepared in detail and shown to relevant institutions when requested.
• Necessary health certificates must be obtained for some food and chemical products. Products deemed unsafe by Azerbaijan are not allowed to enter customs.
• You must document and convey information regarding your product's details (place of production, type of product, quantity, weight, sizes, etc.) to the relevant institutions. These institutions are generally cargo companies, but in some cases, they may also be the institutions directly associated with the country's commercial activities.
• It is recommended to review the Azerbaijan Standardization Institute (AZSTAND) site, which is responsible for standards in Azerbaijan.

What are the Export Taxes to Azerbaijan?

All taxation regulations for products entering and exiting the country are shaped within the framework of the Customs Law of the Republic of Azerbaijan. According to the rules and regulations, a taxation between 0% and 15% is applied to third-country origin goods at the import stage depending on product groups, and Turkey is among these countries. Tax rates vary according to characteristics such as product size, quantity, and weight. Additionally, due to some customs agreements, there are also tax exemptions. No customs tax is levied on products exported to Azerbaijan from the countries with which Azerbaijan has Free Trade Agreements (Russia, Ukraine, Georgia, Moldova, Kazakhstan, etc.). The only applicable tax for these countries is the VAT, which is set at 18%.

Additionally, for those wishing to establish a company within the country, it is essential to mention the subject of internal taxes. Internal taxes applied in the Republic of Azerbaijan can be listed as follows:
- Income tax for individuals
- Profit tax for legal entities
- Value Added Tax (VAT)
- Excise taxes (special consumption taxes)
- Property tax for legal entities
- Land tax
- Road tax
- Mining tax
- Simplified tax (taxes subject to simple procedures)

What Products are Exported to Azerbaijan?

In the context of Turkey's exports to Azerbaijan, the data regarding the exported products and relevant figures for the year 2021 according to the Trademap TR source are as follows:
• Helicopters, airplanes, etc.; space vehicles (including satellites), launch vehicles for space vehicles, and suborbital vehicles = 175,893 (an increase of +2.3% compared to the previous year).
• Human blood, animal blood, serum, vaccines, toxins, etc. = 96,004 (+3022.1%)
• Medicines prepared for treatment or prevention (dosed) = 46,251 (-19.9%)
• Construction and construction components made of iron or steel, prepared iron or steel plates, bars, etc. for use in construction = 39,881 (-1.5%)
• Washing, cleaning agents (excluding soaps) = 39,509 (-12.1%)
• Other nuts (fresh/dried) (shelled/peeled) = 39,276 (-7.8%)
• Other furniture and their parts and components = 37,851 (+36%)
• Motor vehicles designed to carry 10 or more people = 37,322 (+37.1%)
• Bulldozers, graders, land leveling machines, scrapers, mechanical shovels, excavators, road rollers, etc. = 34,971 (+260.1%)
• Oils obtained from petroleum oils and bituminous minerals = 32,159 (+89.8%)
• Hygienic towels and pads, baby diapers, and other similar hygienic items = 31,578 (-6.6%)
• Insecticides, disinfectants, pest control products, etc. = 27,487 (+2.8%)
• Taps, faucets, valves, and fittings = 27,367 (+22.8%)
• Sweet biscuits and wafers = 27,316 (+19.9%)
• Refrigerators, freezers, and other cooling and freezing devices, and heat pumps = 25,662 (+6.5%)

What is the Volume of Trade Between Azerbaijan and Turkey?

One of the most critical factors strengthening the commercial relations of the two countries is their positive approaches towards each other. Thanks to the long-lasting friendship between Turkey and Azerbaijan, their economic relations have also risen every year. We can say that reciprocal investments have increased significantly in terms of investment relations. Especially in the oil and natural gas sectors, Azerbaijan is entering the global market with many Turkish companies. As of 2021, our exports to Azerbaijan are around 2.3 billion dollars, while our imports are nearly 1 billion dollars. The trade volume between Azerbaijan and Turkey is 4.1 billion dollars.