Study of Small and Medium Enterprises in Azerbaijan - IFC

Contents
Abbreviations....................................................................................... 4
Foreword and Acknowledgements................................................... 5
Executive Summary............................................................................. 6
Policy Recommendations..................................................................11
Introduction........................................................................................22
1. Methodology.................................................................................27
1.1 Background........................................................................................................ 27
1.2 Purpose of survey.............................................................................................. 27
1.3 Sampling strategy.............................................................................................. 27
1.4 Firm classification in the Azerbaijani economy.................................................. 28
1.5 Data collection................................................................................................... 29
1.6 Qualitative method of data collection............................................................... 29
1.7 Distribution of official data and survey sample, by sector of activity................ 29
2. SMEs in Azerbaijan.......................................................................33
2.1 Individual entrepreneurs.................................................................................... 35
2.2 Small enterprises................................................................................................ 38
2.3 Main source of investments: own funds........................................................... 39
2.4 State subsidies for SME development............................................................... 40
2.5 Legal environment and SME confidence........................................................... 41
3. Business Registration....................................................................45
3.1 Registration: the legal framework..................................................................... 45
3.2 Registration of legal entities.............................................................................. 46
3.3 Registration of individual entrepreneurs............................................................ 48
3.4 Economic impact estimate................................................................................. 49
3.5 Introducing registration one-stop-shop............................................................. 49
3.6 The new legal framework................................................................................. 50
3.7 Registration procedure for legal entities............................................................ 50
3.8 Registration procedure for individual entrepreneurs......................................... 52
3.9 Unofficial payments........................................................................................... 54
3.10 Recommendations........................................................................................... 54
4. Business Licensing.........................................................................64
4.1 Licensing: the legal framework.......................................................................... 65
4.2 Licensing coverage............................................................................................. 66
4.3 Licensing procedure........................................................................................... 67
4.4 Economic impact of licensing............................................................................ 70
4.5 Recommendations............................................................................................. 71
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St u d y o f Sma l l a n d Me d i u m Ent e r p r i s es in Az e r b a i j a n