Azerbaijan has experienced impressive economic growth since it gained independence, and foreign investment has been encouraged and welcomed. So, expats doing business in Azerbaijan will 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 find work in Azerbaijan. However, as the economy has expanded, business opportunities have diversified. 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.
Azerbaijan has seen much development of its infrastructure and experienced improved services in recent years. Unfortunately, the gap between rich and poor has widened and wealth is increasingly held in the hands of a small elite, while corruption also continues to plague the country and can affect business dealings.
Despite its challenges, Azerbaijan is viewed as a relatively easy destination in which to do business and has fared well in international business surveys. The country achieved a rank of 34 out of 190 countries in The World Bank’s Ease of Doing Business Survey for 2020. Azerbaijan ranked highly in terms of getting credit, and expats will find that starting a business is easy. That said, the economy falls short in protecting minority investors (ranked 105th) and trading across borders (83rd).
Business hours are usually Monday to Friday, 9am to 5pm or 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. It's also advised to offer a gift or food to business partners and colleagues at least three times, or, when offered a gift, to only accept after three offerings.
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.
Presenting a business card with details in Azeri on one side and a translation in English or Russian on the other side can be helpful.
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 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 and 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 Armenia 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.
Do understand that while most citizens are Muslim, religion is largely a private matter and Azerbaijan is a largely secular country.