Study of Small and Medium Enterprises in Azerbaijan - IFC

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• Subject to the nature of each permit, establish an authority responsible for the clear functioning of the one-stop-shop; • Create an effective mechanism for coordination between state bodies engaged in permit issuance; • Identify rights and responsibilities of each state agency engaged in the issuance process; • Clarify clear deadlines for document review. Box 5.7 Setting priorities A one-stop-shop is far more intensive to operate and requires substantial back-office process re-engineering among the various administrations involved, whereas the “silence is consent” and “self-certification” approaches are quicker to introduce institutionally and organizationally. Therefore, it is recommended to start with the guillotine review and the introduction of both “silence is consent” and “self-certification” in an initial phase of the project and then move to a second phase with the creation of a one-stop-shop once it becomes clear that the public administration has the appropriate capacity in place. Expected impact Application of the one-stop-shop would increase the standards of administrative operations and reduce the burden for entrepreneurs in terms of time and money spent. One-stop-shop would also reduce the number of “unofficial” settlements between entrepreneurs and officials. 5.7.6 Increase the legal awareness of entrepreneurs and government officials. The following tools can be used: • Simple brochures distributed to entrepreneurs; • Clear procedural maps, available in issuance offices; • Seminars, training, and informational roundtables aimed at increasing dialogue between the private sector and government; • Public service announcements on television presenting information on procedural changes. Expected impact While introducing higher standards regulating the procedure of obtaining permits, improved accessibility to information, decreased opportunities for unofficial payments and increased legal protection of entrepreneurs supplement the reforms in terms of direct benefits. 86 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
Annex 5.1 Procedure for obtaining conformity certificate for retail sale of foodstuff produced in Azerbaijan Step 1. Submit a standard application form to the State Agency for Standardization, Metrology and Patent or certified private agency. The following shall be stated in the application form • for legal entities: its name and legal address; • for individuals – name, surname, patronymic name, information on identity card (series, number, the date of issue and issuing authority), type of activity. The following documents shall be attached to the application form: a) For food stuff produced in a serial order: • normative – legal documents (if necessary); • copy of certificate on quality control (if available); • protocols of tests carried out by the producer; • copy of hygienic certificate (to be issued by the Ministry of Health within 10 working days, cost -3 Azerbaijani manats ($ 3.70) + expenses related to laboratory expertise); • copy of veterinary certificate for the foodstuff of animal origin (to be issued by the Ministry of Agriculture within 7 days, cost - 5 Azerbaijani manats ($ 6.17) + expenses related to laboratory expertise); • copy of phytosanitary certificate for the processed food stuff of plant origin (issued by the Ministry of Agriculture within 5 days, cost -1 Azerbaijani manat ($ 0.81) + expenses related to laboratory expertise); • copy of special permit required by the law. b) For food stuff produced in a lot order: • copy of contract; • protocols of tests carried out by the producer (if available); • copy of hygienic certificate (to be issued by the Ministry of Health within 10 working days, cost -3 Azerbaijani manats ($ 3.70) + expenses related to laboratory expertise); • copy of quality certificate issued by the producer (if available); • copy of veterinary certificate for the food stuff of animal origin (to be issued by the Ministry of Agriculture within 7 days, cost - 5 Azerbaijani manats ($ 6.17) + expenses related to laboratory expertise ); • copy of fitosanitary certificate for the processed food stuff of plant origin (issued by the Ministry of Agriculture within 5 days, cost -1 Azerbaijani manat ($ 0.81) + expenses related to laboratory expertise). Step 2. Receive conformity certificate within 15 days from the date of acceptance of the application form by certifying agency – official cost: 16, 80 Azerbaijani manats ($ 20.70) for each day of the application review process. NOTE: conformity certification process includes the following stages: • review of the submitted documents; • selection of mechanism for certification; selection of laboratory for testing a foodstuff; • making appropriate decision on the application; • selecting sample from, and identification of the food stuff; • testing sample of the food stuff; • subject to results of the test, issuance or refusal of conformity certificate Conclusion: Total number of days (including collecting of necessary documents) required for obtaining conformity certificate is approximately 33 days: Approximate amount of official payments is 270 Azerbaijani manats ($ 333). Focus group results: Total number of days (including collecting of necessary documents) required for obtaining conformity certificate is approximately 11-13 days: Approximate amount of official and unofficial payments is 2000-2300 Azerbaijani manats ($ 2470 - 2840). Aze r b a i j a n Bu s i n e s s En a b l i n g En v i r o n m e n t Pr o j e c t 87
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Study of Small and Medium Enterpris
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Study of Small and Medium Enterpris
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5. Business Permits................
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Foreword and Acknowledgements IFC,
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critically examines all areas of op
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of each formality. Special attentio
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Policy Recommendations Business Reg
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Problems Sources of Problem Recomme
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Business Taxation Problems Sources
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Capital: Baku Country’s populatio
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The state, ultimately responsible f
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1. Methodology 1.1 Background The s
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the share of economically active co
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Scope of activity Official statisti
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2. SMEs in Azerbaijan The aim of th
Page 37 and 38: Meanwhile, the number of small and
Page 39 and 40: Table 2.2 Statistical information o
Page 41 and 42: The “typical” small enterprise
Page 43 and 44: According to the IFC survey, more t
Page 45 and 46: 2.5.3 Legal disputes Most entrepren
Page 47 and 48: 3. Business Registration In January
Page 49 and 50: According to the law previously in
Page 51 and 52: 3.4 Economic impact estimate Accord
Page 53 and 54: tion duplicate is addressed to the
Page 55 and 56: the local tax inspectorate for regi
Page 57 and 58: 3.10.3 Introduce the electronic reg
Page 59 and 60: 3.10.7 Simplify the liquidation pro
Page 61 and 62: Business registration before ‘one
Page 63 and 64: Process map of one-stop-shop busine
Page 65 and 66: Registration for individual entrepr
Page 67 and 68: 4.1 Licensing: the legal framework
Page 69 and 70: Chart 4.1 Number of activities requ
Page 71 and 72: While the Rules specify limits for
Page 73 and 74: Chart 4.6 Economic impact of licens
Page 75 and 76: Annex 4.1 Checklist of issues for d
Page 77 and 78: Based on the IFC survey estimates,
Page 79 and 80: 5.2 Permits coverage The Azerbaijan
Page 81 and 82: Box 5.4 An example of overlapping p
Page 83 and 84: 5.4 Permit expenses Azerbaijani leg
Page 85 and 86: Chart 5.9 40% Average percentage of
Page 87: 2.4. Specifying in the law a unifor
Page 91 and 92: Annex 5.2 Checklist of issues for d
Page 93 and 94: The most significant legal act in i
Page 95 and 96: 6.1.2 There is no effective mechani
Page 97 and 98: 6.1.4 Entrepreneurs are not aware o
Page 99 and 100: IFC’s analysis showed that only h
Page 101 and 102: 6.2.2.1 The inspections process and
Page 103 and 104: View from an entrepreneur: “The s
Page 105 and 106: Chart 6.11 Average registration in
Page 107 and 108: going in the opposite direction. In
Page 109 and 110: clearly defined circumstances, or a
Page 111 and 112: Annex 6.2 Presidential Decree No. 7
Page 113 and 114: The bulk of individual entrepreneur
Page 115 and 116: Items 1-9 are collected at the firs
Page 117 and 118: The IFC survey reveals that one in
Page 119 and 120: Table 7.5 Main tax obligations of a
Page 121 and 122: Chart 7.3 IFC Survey: Complexity of
Page 123 and 124: 7.3.2 Tax inspections negatively af
Page 125 and 126: 7.3.5 The cumbersome VAT administra
Page 127 and 128: • Introducing clearer and more el
Page 129 and 130: Chart 8.1 Development of Credit Ins
Page 131 and 132: More than 90 percent of entrepreneu
Page 133 and 134: Chart 8.9 The loan interest rates o
Page 135 and 136: Case study of a Baku-based glass an
Page 137 and 138: View from a bank employee: “One p
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Box 8.2 Examples of a successful cr
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Box 8.3 Examples of alternative mec
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9. Foreign Trade The volume of fore
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Box 9.1 Customs regimes under the C
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As Chart 9.1 illustrates, 98 percen
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Table 9.1 A comparison of the proce
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The comprehensive system of mandato
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Table 9.2 Average costs for imports
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Box 9.5 Customs payments The Custom
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Box 9.8 An excessive number of docu
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Moreover, due to the underdeveloped
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Expected impact More comprehensible
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9.5.6 Accelerate WTO accession of A
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Chart 9.5 Goods importable upon app
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Azerbaijan has been long pending a
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List of Laws 1. The Tax Code of the
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Statistical Annexes Aze r b a i j a
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Chart A1.3 Individual Entrepreneurs
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Chart A1.7 Individual Entrepreneurs
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Chart A1.14 Three Major Types of Ob
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Registration Chart A2.1 Entrepreneu
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Chart A2.8 Three Major Problems Occ
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Chart A3.3 Existence of Licenses by
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Chart A3.9 Three Major Obstacles to
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Chart A4.4 Obtaining of Any Permits
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Chart A4.10 Time Required to Obtain
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Chart A5.4 Application for Credit o
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Chart A5.12 Average Interest Rate (
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Chart A6.3 Entrepreneurs That Under
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Chart A6.8 Authorities That Made In
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Chart A6.13 Breakdown of Number of
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Chart A6.19 Average Duration of One
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Chart A6.25 Small and Medium Enterp
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Chart A7.3 Small and Medium Enterpr
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Chart A7.8 Reported Share of Busine
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Chart A8.3 Usage of Optional (not c
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Azerbaijan Business Enabling Enviro
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