Alat Free Economic Zone (AFEZ) with a strategic geographic location, adjacent to the Baku International Sea Trade Port and global transport corridors, will serve as a regional investment hub and will deliver an outstanding business environment by providing fiscal and non-fiscal incentives and well-established infrastructure, through an independent legal framework and regulatory authority.
The legal framework for the development, operation and governance of the AFEZ is based on the Law of the Republic of Azerbaijan “On the Alat Free Economic Zone”, adopted by the Parliament of Azerbaijan, and signed by the President of the Republic of Azerbaijan as a prevailing law of the Republic of Azerbaijan and internal regulations of thhe AFEZ issued by the AFEZ Authority. The Law of the Republic of Azerbaijan on the Alat Free Economic Zone declares that the AFEZ legislation, which consists of the Law on AFEZ and internal regulations of the AFEZ, takes precedence over base economy legislation.
In line with international benchmark locations, the AFEZ will provide a package of fiscal and non-fiscal incentives for investors engaged in high value-added and export-oriented manufacturing and internationally traded services:
- Exemption from value-added tax, withholding tax and any other corporate taxes;
- Exemption from customs duties and taxes on import to the free zone and export from the free zone. In addition to that, goods produced in the AFEZ will be exempt from customs duties in 10 surrounding countries (Russia, Georgia, Ukraine, Moldova, Belarus, Kazakhstan, Uzbekistan, Kyrgyzstan, Turkmenistan, Tajikistan) which Azerbaijan has Free Trade Agreement with;
- No personal income tax for employees (if the monthly salary does not exceed 8000 manat – approximately 4700$);
- Social security payments for foreign skilled personnel are optional and for local personnel are obligatory;
- No restrictions on foreign ownership;
- No requirement for a local partner;
- No restrictions on foreign currency transactions or profit repatriation;
- Trade facilitation-based customs regime;
- Investors’ property is immune from any nationalization expropriation measures or any other restrictions on private ownership;
- Full protection of intellectual property rights;
- Assistance in finding local skilled personnel;
- On-site one-stop shop business appraisal, licensing, permitting, etc. without any base economy authorities or agencies involvement;
- Access to visas for foreign nationals;
- Independent dispute resolution procedures in accordance with best international standards;
- Independent regulatory body
The AFEZ serves the needs of investors engaged in high-value added and export-oriented manufacturing and internationally traded services, using innovative technologies and approaches to work, in accordance with best international standards. Export-oriented indicates that, at least 75% of goods produced in the AFEZ by investors must be exported outside of the Republic of Azerbaijan.
In addition to business-friendly legislation, fiscal and non-fiscal incentives,the AFEZ provides its clients with industrial land plots with ready-to-use off-site and on-site infrastructure and utilities.
The approved Master Plan of the AFEZ covers 850 hectares of area, spread over three separate zones. FEZ 1 (206 ha) and FEZ 2 (433 ha) focuses on light and standard manufacturing, while FEZ 3 (211 ha) focuses on heavy manufacturing. All three zones are strategically positioned at the intersection of international transport corridors in vicinity of the Baku International Sea Trade Port.
Furthermore, the Government reserved more than 7000 hectares for future expansion of the AFEZ.
In order to meet the needs of our clients in transportation and logistics services, two logistics and transportation centers will be established: one on the territory of 50,000 square meters for goods, transported by road and the second on the territory of 160,000 square meters for goods transported by rail.
