Azerbaijan Country Profile

Snapshot of the Azerbaijan Country Profile


Azerbaijan is a transitional economy with important oil reserves and significant agricultural potential. Its annual GDP has grown by an average 21% year on year for the past several years, providing a potentially very attractive market for foreign investors despite problems in trying to curb inflation. It is widely recognised that corruption is deeply entrenched and institutionalised throughout Azerbaijani society and poses an obstacle to both social and economic development in the country.

Positive developments in relation to corruption and investment:

  • Azerbaijan was the best reformer country in 2007-2008, with improvements on 7 out of 10 indicators of reform. These reforms were in business registration, protection of investor rights, property registration, and tax administration.
  • The government has created a new business registration mechanism based on the principle of a one-stop shop under the Ministry of Taxes, allowing for companies to register within 3 days.
  • Recent years have seen rising salaries for civil servants in Azerbaijan and training being undertaken to raise awareness in the bureaucracy about corruption.

Risks of corruption:

  • Azerbaijan is a challenging market for doing business, not least of all because of the systemic level of corruption which has deterred many potential investors from entering the market.
  • Citizens as well as companies frequently face bureaucrats who are not subject to oversight during the course of their duties, which offers significant leverage for bureaucrats to demand bribes, for instance, offer undue advantages to friends. 
  • The Azerbaijani system has few institutional checks on graft and the rapid growth in the energy sector has offered considerable opportunities for the institutionalisation of corruption.