Investment Climate Project, Azerbaijan
This investment climate program seeks to improve the business environment for Small and Medium Enterprises (SMEs) and takes place against the background of declining oil-revenus and the need to diversify the economy. Beyond diversification, reducing barriers for SMEs is a conduit for more equal access to economic opportunities
| Country/region | Topic | Period | Budget |
|---|---|---|---|
|
Azerbaijan |
Private sector and entrepreneurship |
01.04.2013
- |
CHF 1'197'000
|
- International Finance Corporation
-
Sector according to the OECD Developement Assistance Commitiee categorisation BUSINESS & OTHER SERVICES
Sub-Sector according to the OECD Developement Assistance Commitiee categorisation Business support services and institutions
Cross-cutting topics principal
Project number UR00721
| Background |
While the first phase of the project, implemented by the International Finance Corporation, has led to considerable improvement for business entry for SMEs, the overall environment needs further reforms. The project will, on the one hand, continue to improve permits and inspection regime. On the other hand, it seeks to address second generation reforms in the area of agriculture and tax administration. The former sector is critical in view economic diversification and is in need of investments. The latter is of relevance given Azerbaijan?s exposure to inward and outward Foreign Direct Investment flows. |
| Objectives |
The project will seeks to (i) improve the inspection and permits regime, (ii) initiate reforms to improve the competitiveness of the agribusiness sector and (iii) enhance transparency of taxation procedures for SMEs and in transfer pricing. |
| Medium-term outcomes |
Adoption of Laws on Inspections and Permits providing compliance cost savings. Reduction of informal payments to obtain licenses and permits. Reduction of the average number of inspections. |
| Results |
Expected results: Draft transfer pricing legislation reflecting Organization for Economic Co-operation and Development OECD principles and tax reform plan to simplify tax regime for SME's. Diagnostic of regulatory and administrative constraints in 2-3 value chains in horticulture Establish a transparent seed registration mechanism. Results from previous phases: Establishment of an efficient business registration system consisting of a one-stop-shop and of an online registration system- supported by parallel investments by the Government of Azerbaijan with USD 8 million. Gains in reduced compliance costs are estimated at USD 15.5 million per annum. Time required to register a business has dropped from 36 days in 2007 to three days or less. Supported the design of decrees and laws on business permits and inspections reflecting international good practice. Establishment of a centralized inspections registry which increased transparency. |
| Directorate/federal office responsible |
SECO |
| Credit area |
Development cooperation |
| Project partners |
Contract partner |
| Budget | Current phase Swiss budget CHF 1'197'000 Swiss disbursement to date CHF 0 Budget inclusive project partner CHF 1'260'000 |
| Project phases | Phase 1 01.04.2013 - 31.03.2016 (Completed) |