Shelf Company in Azerbaijan
The benefits of a shelf company in Azerbaijan
An aged company or a shelf company in Azerbaijan can have a corporate bank account opened, thus making it available for the first transactions. Such entity will offer suitable credibility if the future owner is interested in obtaining a corporate loan from a financial institution. Furthermore, there are numerous distributors or providers who trust a business with years behind instead of a newly registered company. Among the advantages of a shelf company in Azerbaijan, we mention that it is available for immediate transfer of the ownership. A ready-made company is not subject to debts or liabilities and this is another strong reason why you should direct your attention to shelf companies in Azerbaijan.
Below, we highlight the main advantages of purchasing a shelf company in Azerbaijan as opposed to the decision to open a company in Azerbaijan:
- almost instant purchase: the shelf company is already incorporated, all that is needed is a simple transfer of ownership to appoint the new director and administrator and alter the Articles of Association.
- overall processing time: investors who do not have the time to go through company incorporation in Azerbaijan have this option for a ready-made entity; in some cases, it is faster to set up the shelf company with the new owner than it is to go through the entire company formation phase.
- bank account opening: some shelf companies have a bank account, however, their price is higher; investors who purchase one without an account can open one once the transfer is complete.
- longevity: as previously mentioned, the longevity of the shelf company is one of its most important features and offers credibility, if the entrepreneur desires this.
Investors should note that when we are referring to the shorter overall processing time of the shelf company compared to opening a new company we include all of the required processes for the latter. This means drawing up the Articles of Association, gathering all of the founders (if this is the case) to sign the company documents and handling all of the registration matters.
As for the company registration process in Azerbaijan, we remind you that you can solicit complete details from our specialists in company incorporation in Azerbaijan. Some investors may prefer to start their own business instead of purchasing one. This is a business decision related to the business scope, the future goals, and evolution of the company and based on how fast the investors want to enter the Azerbaijan market. As previously stated, a shelf company will offer more credibility as it is already incorporated for some time and business partners may look at the incorporation date. However, the characteristics of the purchased shelf company should meet the business goals and investors are advised to decide upon a favorable business strategy before deciding whether or not a shelf company is the most suitable method of entering the market.
What to consider when deciding on a shelf company in Azerbaijan
Shelf companies in Azerbaijan have never been used and therefore, no trading activities have been registered. In this matter, a ready-made company will be purchased with a certificate that confirms there were no activities, and consequently no debts or liabilities. It is advisable to request this certificate when purchasing the company as proof of making a safe purchase. Investors who wish to perform a more thorough evaluation of the company they are about to buy can reach out to our agents specializing in company formation in Azerbaijan for complete details about the company due diligence procedure.
Investors should take the following issues into consideration before purchasing a shelf company in Azerbaijan:
- the type of company: there are several types of business forms available for incorporation in Azerbaijan and the ready-made one should be a type that suits the business needs in terms of size.
- the name of the company: the shelf company will already have a business name that was approved for registration and was decided by the entity that handles the shelf company purchases; changing the name will involve several steps if investors decide to use a specific one.
- the history: when performing due diligence on the shelf company, issues like the financial and tax compliance situation of the business are to be verified.
- the costs: shelf companies have varying prices based on their age, whether or not they have a bank account and several other criteria; to these, certain maintenance fees can also apply and verifying the total costs is important before agreeing on the purchase.
Once the company is verified and purchased, investors can move forward with the other steps. A usual subsequent one is to appoint their board of directors as soon as they signed the contract and purchased a shelf company in Azerbaijan.
Doing business in Azerbaijan
The oil and gas sector has been the primary one in Azerbaijan for many years and also the main recipient of foreign direct investments. However, this has changed and many other business sectors have developed and become attractive to foreign entrepreneurs. The Foreign Investment Law is the primary legal resource for the manner in which foreign companies or owners may enter the market. foreigners can either open a fully owned subsidiary, acquire shared in existing companies or enter into investment agreements or joint ventures with Azerbaijani companies or investors. Special licensing requirements are in place as directed by the Ministry of Economy.
Company formation in Azerbaijan is based on a number of steps and foreign investors may request specialized in order to open the company, such as the services offered by our experts.
According to the State Statistical Committee of the country, the following macro-economic indicators were available in January 2020:
- 6.520,2 million AZN – the value of the gross domestic product.
- 996,7 million AZN – investments directed to fixed capital.
- 335,3 million AZN – agricultural products.
Whether you would like to register a company or acquire a shelf company in Azerbaijan, it is recommended to ask for comprehensive information in this matter from our team of company formation representatives in Azerbaijan, by contacting us.