Doing Business in Azerbaijan 2009 - Azerbaijan Export ...

104 DOING BUSINESS IN AZERBAIJAN
gives relevant instructions to the Ministry of Labour and Social
Protection of Population, the Ministry of Taxes and State Committee
for Town-planning and Architecture. As for the law “On the
Basics of City Construction” foreigners and foreign legal entities
may engage in construction works in Azerbaijan only in conjunction
with Azerbaijani nationals or legal entities.
Azerbaijan is a booming construction market. There are several
reasons behind the rapid development of the business in Azerbaijan
in the last few years. The major one is the large capital investment
in local infrastructure related to oil and gas projects. As a result
this business area has evolved into a very competitive sector with a
number of strong companies able to deliver the highest international
standards in construction.
The sector is growing year by year. Substantial increases in
business and residential construction have been registered since
the late 1990s in response to the growth of both commercial and
household purchasing power. With the grown of demand for better
living conditions the real estate prices in Azerbaijan are increasing
on yearly basis. The construction industry has been undergoing a
large further development. Since 2004 the trend changed in favour
of residential development. Because the income of the population
is growing with the state and industry development, the demand
for new construction has been increasing.
Therefore, it is highly likely that the proportion of residential
construction will increase substantially as a result of increasing
income of population. However, the construction growth is also
observed in agricultural, transport and industrial sectors, which are
the results of positive economical reforms and target programs
carried out by the Azerbaijan government, for developing the
non-oil sectors.