AZERBAIJAN VALUE PROPOSITION PROVEN TRACK RECORD AND STABILITY - PowerPoint PPT Presentation

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VALUE PROPOSITION PROVEN TRACK RECORD AND STABILITY STRATEGIC LOCATION FAVOURABLE BUSINESS CLIMATE QUALIFIED WORK FORCE

VALUE PROPOSITION PROVEN TRACK RECORD AND STABILITY

STATE OF ECONOMY 2015 GDP 53 34% 5558,7 US$ GDP PER CAPITA BLN US$ 19% 9 593 000 12% POPULATION 10% 8% 6% 5% 3% 2% 6,894.3 MLN US$ EXTERNAL PUBLIC DEBT Industry Construction Trade Taxes Agriculture Transport Tourism Telecom Other Source: State Statistical Committee of Azerbaijan

ECONOMIC DIVERSIFICATION DIVERSIFICATION OF ECONOMY AND DEVELOPMENT OF NON-OIL SECTORS AS A KEY STRATEGIC PRIORITY 69.3% NON-OIL GDP non-oil oil GDP STRUCTURE (%) (2015) 31 36 42 48 49 51 53 57 59 60 69 64 58 52 51 49 47 43 41 40 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: State Statistical Committee of Azerbaijan

PROVEN INVESTMENT DESTINATION TOP NON OIL INVESTORS UK TURKEY Non-oil FDI, bln. USD 2,6 BLN US$ 1.5 BLN US$ 1.32 1.09 1.04 USA NETHERLANDS 0.89 0.9 BLN US$ 1 BLN US$ 0.86 0.62 0.66 0.45 0.49 0.36 UAE GERMANY 0.7 BLN US$ 0.4 BLN US$ 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 TOP NON-OIL RECIPIENT SECTORS TRANSPORT AND OTHER INDUSTRY CONSTRUCTION TRADE COMMUNICATION 5% 10% 57% 15% 13%

PROVEN TRADING PARTNER US$ 16.56 BLN 2015 US$ 9.22 BLN TOTAL VALUE OF EXPORTS TOTAL VALUE OF IMPORTS TOP 5 EXPORT MARKETS (%) TOP 5 IMPORT (%) ITALY RUSSIA 20 16 GERMANY TURKEY 11 13 FRANCE USA 8 9 ISRAEL GERMANY 7 7 CZECH ITALY 5 6 TOP 5 NON-OIL EXPORT PRODUCTS (%) TOP 5 IMPORT PRODUCTS (%) EQUIPMENT FRUITS 14 27 SUGAR METALS 13 17 VEG/ANIMAL OILS TRANSPORT TOOLS 10 13 PLASTIC PRODUCTS FOODSTUFFS 7 11 VEGETABLES TOBACCO 6 3 Source: State Statistical Committee of Azerbaijan

COMPETITIVENESS The Global Competitiveness Report 2015-2016 AZERBAIJAN AZERBAIJAN #40 KAZAKHSTAN #42 RUSSIA #45 GEORGIA #66 UKRAINE #79 TAJIKISTAN #80 ARMENIA #82 MOLDOVA #84 KYRGYZSTAN #102

VALUE PROPOSITION A PERFECT HUB

HUGE SURROUNDING MARKET GLOBAL OUTREACH 50 COUNTRIES WITH 50% OF WORLD CONSUMERS WITHIN 4 HOURS FLIGHT (MEDIUM-HAUL FLIGHT) FREE ACCESS TO CIS + GEORGIA MARKETS OF 270 MIL CONSUMERS AND OVER 1.6 TRILLION US$ GDP TRANSIT HUB AT EAST-WEST, SOUTH-NORTH AND SOUTH-WEST TRANSIT ROUTS UNIQUE ACCESS TO THE UNTAPPED MARKETS OF IRAN, AFGHANISTAN, IRAQ

EFFECTIVE TIME SAVING ROUTS 70% TIME SAVING (CHINA - EUROPE) 60% TIME SAVING (INDIA - EUROPE)

VALUE PROPOSITION BUSINESS ENVIRONMENT

WB DOING BUSINESS REPORT 2016 OVERALL STARTING A REGISTERING RANKING BUSINESS PROPERTY 63 / 189 7 / 189 22 / 189 PROTECTING ENFORCING PAYING TAXES INVESTORS CONTRACTS 34 / 189 36 / 189 40 / 189

ENABLING BUSINESS ENVIRONMENT THE ONE-STOP-SHOP REDUCED RED TAPE SYSTEMS No state inspections of businesses Business registration (except for tax, human health and state security reasons) Streamlined licensing system Customs (no. of licensed activities - 37, no validity period, low (inspection of goods and transport means crossing the fees, max 10 working days waiting period) state border) E-Gov services for business Construction permits (incl. e-registration, e-taxation, e-licensing, e-trade, e- intellectual property, e-payment) Streamlined public services (State Agency for Public Service and Social Innovations Licensing (ASAN) is among the global best practices in rendering public services)

ENABLING BUSINESS ENVIRONMENT STIMULATION COMPETITIVE OF EXPORTS TAX REGIME No export duties Streamlined procedures Competitive tax rates Export reimbursement system Corporate tax - 20%, VAT - 18%, Simplified tax – 4 or 2%, Personal income tax - 14 or 25%, WHT - 10% Tax holidays Export grant scheme Tax holidays for agriculture, industrial and technological parks, holders of investment promotion document

INVESTMENT INCENTIVES RESIDENTS OF HOLDERS OF INVESTMENT INDUSTRIAL AND PROMOTION DOCUMENT TECHNOLOGY PARKS 50% REDUCED 7 7 0% CORPORATE TAX CORPORATE TAX 0% LAND AND PROPERTY 0% LAND AND PROPERTY TAX TAX 0% VAT ON HARDWARE, 0% VAT ON HARDWARE, Y Y TECHNOLOGICAL TECHNOLOGICAL EQUIPMENT AND EQUIPMENT AND E E STRUCTURES IMPORTED STRUCTURES IMPORTED BY IPD HOLDERS BY RESIDENTS A A 0% CUSTOMS DUTY ON 0% CUSTOMS DUTY ON R R HARDWARE, HARDWARE, TECHNOLOGICAL TECHNOLOGICAL S S EQUIPMENT AND EQUIPMENT AND STRUCTURES IMPORTED STRUCTURES IMPORTED BY RESIDENTS BY IPD HOLDERS

INVESTMENT CLIMATE NO LIMITS ON THE NO TECHNOLOGY LIMITED PRICE CONTROL AMOUNT OF FOREIGN TRANSFER CAPITAL IN COMPANIES RESTRICTIONS NO RESTRICTIONS ON NO FOREIGN EXCHANGE REPATRIATION OF RESTRICTIONS PROFITS NO PRIOR NO DISCRIMINATION AUTHORISATION OF BETWEEN FOREIGN AND NO LOCAL COUNTERPART FOREIGN INVESTMENT DOMESTIC INVESTOR REQUIREMENT REQUIRED

AZERBAIJAN INVESTMENT COMPANY  SUPPORT NON-OIL SECTOR DEVELOPMENT VIA EQUITY INVESTMENTS IN COMMERCIALLY VIABLE PROJECTS AND INVESTMENT FUNDS  INCREASE MARKET VALUE AND COMPETITIVENESS OF INVESTEE COMPANIES BY INTEGRATING NEW TECHNOLOGIES AND KNOW- HOW, AND PROMOTE MODERNIZATION AND INNOVATION  ORGANIZE AND MANAGE THE INDUSTRIAL ESTATES IN ORDER TO DEVELOP THE NON-OIL INDUSTRY THROUGH EFFECTIVE USE OF LOCAL RESOURCES

VALUE PROPOSITION QUALIFIED WORKFORCE

YOUNG AND QUALIFIED WORKFORCE LABOUR MARKET EFFICIENCY PLACE LABOUR FORCE = 4.8 MILLION PERSONS KAZAKHSTAN 1 AZERBAIJAN 2 GEORGIA APPROX. 40% OF THE POPULATION IS 3 TAJIKISTAN 4 UNDER THE AGE OF 30 RUSSIA 5 UKRAINE 6 HIGH EMPLOYMENT RATE (95%) ARMENIA 7 MOLDOVA 8 EXTREMELY HIGH LITERACY RATE KYRGYZSTAN 9 (99.8%) AVAILABILITY OF SCIENTISTS 30 THOUSAND STUDENTS GRADUATE AND ENGINEERS FROM 51 UNIVERSITY ANNUALLY PLACE STATE PROGRAMME ON EDUCATION UKRAINE 1 OF AZERBAIJANI YOUTH ABROAD IN AZERBAIJAN 2 ARMENIA 2007-2015 3 RUSSIA 4 TAJIKISTAN 5 A LARGE R&D CENTER, THE KAZAKHSTAN 6 NATIONAL ACADEMY OF SCIENCES GEORGIA 7 WITH 28 RESEARCH INSTITUTES KYRGYZSTAN 8 MOLDOVA 9 The Global Competitiveness Index 2015-2016

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