background image
1.1.1. Main Forms of Doing Business

Azerbaijan stipulates the following legal forms for doing business in the country:

  • Company (Limited Liability or Joint Stock)
  • Partnerships (General or Limited)
  • Foreign Business (Branch or Representative Office or Subsidiary)


Companies can be formed either as Limited Liability Company (LLP), Additional Liability Company (ALC) or Joint-Stock Company (JSC).

The key aspects of an LLC include:

  • Can be formed by a minimum of one shareholder
  • Liability of the shareholders is limited to their contribution
  • There is no minimum charter capital requirement

An ALC is similar to an LLC in respect of its legal structure. The main distinction is that the participants in an ALC may assume liability for the company in excess of their contributions as regulated by the charter.

The key aspects of a JSC include:

  • May be established as “open” or “closed” business entities. A closed JSC with more than 50 shareholders must be reorganized into an open JSC
  • Can be formed by a minimum of one shareholder
  • Liability of the shareholders is limited to their contribution
  • Shares of an open JSC are publicly sold and can be alienated by shareholders to third parties without restriction
  • The Company must appoint a general meeting body as well as board of directors. It must also have an internal audit commission or auditor if certain thresholds are met
  • The minimum charter capital is AZN 2,000 for a closed JSC, and AZN 4,000 for an open JSC


Partnerships can be registered as either General Partnership or Limited Partnership. The key difference between a general and limited partnership, is that under a general partnership, the liability of all the partners towards third-party creditors is unlimited, whereas in a limited partnership the liability of at least one partner is limited to the extent of his interest in the partnership (limited partner). A limited partnership can be constituted by one or more general partners and one or more limited partners.

Foreign Business

Foreign businesses can conduct their operations in Azerbaijan through the constitution of a Branch office or a Representative Office (RO) or a Subsidiary Company. Subsidiary company can be registered as a limited liability company or joint-stock company.

Representative Office and Branch are not regarded as separate legal entities in Azerbaijan. An RO is the locally registered presence of a foreign legal entity. An RO cannot engage in commercial or business activity, whereas a Branch, being able to carry out all or part of a legal entity’s functions, may engage in business or commercial activity.

Further information on the general investment, tax and regulatory regime about the country is available at the following external references: