Study of Small and Medium Enterprises in Azerbaijan - IFC

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PROCESS MAP FOR OBTANING CONFORMITY CERTIFICATE FOR SALE OF FOODSTUFF PRODUCED IN AZERBAIJAN DE-JURE Entrepreneur Obtain all required documents from the government agencies 17 days Submit an application form and relevant documents State Agency for Standardization/ certified private agency 1 day Receive a conformity certificate State Agency for Standardization/ certified private agency 15 days Total number of days: 32-33 Total official costs: 270 Azer baijani manats ($333) DE-FACTO Entrepreneur Obtain all required documents from the government agencies 8-9 days Submit an application form and relevant documents State Agency for Standardization/ certified private agency 1 day Receive a conformity certificate State Agency for Standardization/ certified private agency 3 days Total number of days: 13 Total official and unofficial costs: 2300 Azerbaijani manats ($2840) 88 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 5.2 Checklist of issues for drafting the Law on Granting Permits 37 General Issues: • What law governs permits and other certifications? • Who issues these regulations and how are they issued? • Is the purpose of the law clearly stated? • Does the law state who is subject to it (e.g., business entities, individuals, NGOs)? • Does the law contain all necessary definitions? (e.g., definitions of permits, issuance of permits, violation, etc.) • Does the law state the objectives of issuance of permits (e.g., a limited list of legitimate regulatory purposes)? • Does the law prohibit the use of permits for certain purposes (e.g., fiscal policy/revenue generation)? • Does the law state the principles of issuance of permits (e.g., simplicity, impartiality, transparency)? • Does the law contain a list of all activities that require obtaining permits? • Does the law specify the agency responsible for issuing each permit? • Does the law categorize activities that require permits according to the level of potential impact on health, safety, and the environment? • Does the law specify terms of validity for the permits? • Under what circumstances may the government establish new permits? • Does the law provide for mechanisms for review and evaluation of existing or new permits? Application Procedure: • Does the law specify procedures for obtaining extensions to validity periods? • What are the rights and duties of the permit issuing authorities? • What are the rights and duties of an applicant? • Does the law provide an exhaustive list of documents required for each permit? • Does the law contain a disclaimer stating that the permit issuing agency may not ask the applicant to submit other documents other than those specified in the law? • Does the law specify reasons for which permit issuing authorities may deny applications for permits and their extensions? • Does the law specify limits for the amount of time agencies may take to process applications? • Are the procedures for application and fees publicly accessible? • Is there a one-stop-shop application process or web-based application system? Costs: • Does the Law clearly indicate the cost of each permit? • Do permits have fixed costs or do costs depend on the lengths for which the permits are valid? • If the Law does not precisely specify fees for obtaining permit, does it contain a “cost-only” provision? • If fees are to be fixed in lesser legal instruments, does the law include a provision limiting the number of times fees may be changed within a one year period? • Does the law specify whether fees will go to the state budget or to individual permit issuing agencies? Decision Making: • Who is the authorized person / body to decide on the application? • Are there legally set deadlines / timeframes to respond to the applicant? • Does the law establish the “silence is consent” principle? • Does the law provide the reasons for denying or suspending permit? Appeals: • Does the law specify procedures by which applicants may appeal the decisions of permit issuing authorities? • Does the law specify detailed hearing procedures? • What kind of authority is responsible for examining appeals cases? • What is the time limit for hearing cases? • In what cases may the appellate authority reject appeal requests? • What forms of legal redress does the appeals process offer successful applicants? 37 Source: IFC, 2006. Business Licensing Reform: A Toolkit for Development Practitioners. 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 89
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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
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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 and 88: 2.4. Specifying in the law a unifor
Page 89: Annex 5.1 Procedure for obtaining c
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
Page 139 and 140: 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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