Doing Business in Azerbaijan 2009 - Azerbaijan Export ...

70 DOING BUSINESS IN AZERBAIJAN
Privatization
Foreign investment under Privatization Programmes
Under the Privatization Law, the following are considered to be
foreign investors:
• foreign legal entities and their subsidiaries;
• Azerbaijani legal entities in which participation of foreign
investment exceeds 50% of the entity’s charter capital;
• foreign nationals; and
• stateless persons.
To date, Azerbaijan has undergone a long process of transferring
from a state-dominated economy to the current situation where
84.5% of the economy is held in private hands. This became
possible largely thanks to the denationalization of state owned
enterprises and property. Privatization occurred in two stages.
The denationalization of small sized enterprises was carried out
within the First Stage Privatization Programme (1995-1998). Thirtynine
thousand enterprises as well as 1.3 million hectares of land
were sold and distributed to private persons and legal entities,
more than 1,550 medium and large enterprises were transformed
into stock-companies.
Few large enterprises were also sold to investors as part of the
Programme. They include, among others, a brewery, and cement
and steel plants transferred to foreign investors.
In general, the sum of revenues from privatization in 1995-2008
was 388.454 million AZN (more than 480 million USD). As a result
of privatization, more than 500,000 job places were made available.
Currently, the Second Stage Privatization Programme adopted in
2000 is underway and covers more strategic and broader sectors of