The Alat Free Economic Zone (AFEZ) is a free economic zone in Azerbaijan, established by the decree of the President of the Republic of Azerbaijan dated 22nd of May 2020 and located adjacent to the Baku International Sea Trade Port and at the intersection of international transport corridors.
Alat Free Economic Zone gives preference to investors engaged in high-value added and export-oriented manufacturing and internationally traded services, using innovative technologies and approaches to work, in accordance with best international standards.
The legal framework for the development, operation, and governance of the Alat Free Economic Zone is based on the “Law of the Republic of Azerbaijan on the Alat Free Economic Zone” (AFEZ Law) adopted by the Parliament of the Republic of Azerbaijan and signed by the President of Azerbaijan as a prevailing law of the Republic of Azerbaijan and internal regulations of AFEZ issued by the AFEZ Authority.
• Exemption from value-added tax, withholding tax and any other corporate taxes;
• Exemption from customs duties and taxes on import to the free zone and export from the free zone. In addition to that, goods produced in the AFEZ will be exempt from customs duties in 10 surrounding countries (Russia, Georgia, Ukraine, Moldova, Belarus, Kazakhstan, Uzbekistan, Kyrgyzstan, Turkmenistan, Tajikistan) which Azerbaijan has Free Trade Agreement with;
• No personal income tax for employees (if the monthly salary does not exceed 8000 manat - approximately 4700$ per month);
• Social security payments for foreign skilled personnel are optional and for local personnel are obligatory;
• No restrictions on foreign ownership;
• No requirement for a local partner;
• No restrictions on currency transactions or profit repatriation;
• Investors’ property is immune from any nationalization, expropriation measures or any other restrictions on private ownership;
• Full protection of intellectual property rights;
• Assistance in finding local skilled personnel;
• On-site one-stop shop business appraisal, licensing, permitting, etc. without any involvement of base economy authorities or agencies;
• Independent regulatory body.
Alat Free Economic Zone has a strategic geographic location, which is positioned adjacent to the Baku International Sea Trade Port and at the intersection of international transport corridors, enabling easy transportation via highways, sea, railroad, and air. At the first stage, one logistics and transportation center has been established in the Alat Free Economic Zone on the territory of 5 hectares with annual capacity of 500,000 tons for goods transported by road. Additionally, Cargo Airport will be established at the territory of the Alat Free Economic Zone. It is expected that the Cargo Airport will be operational not later than the first quarter of 2026 with the capacity of 500,000 tons annually at the first stage, and with further gradual increase reaching up to 1.5-2 million tons per year.
The process of setting up a legal entity in the AFEZ is conducted by the AFEZ Authority in an efficient way. The AFEZ Authority (AFEZA) team guides each investor through every step and assure that establishing a legal entity in the AFEZ is as easy as possible. Based on the investor’s intention and readiness, the whole process could take from a few hours up to a few days. The relevant procedures are regulated by the Alat Free Economic Zone Authority in the one-stop shop business center of the Alat Free Economic Zone, which is responsible for issuing licenses, permits, visas, certificates without any involvement of base economy authorities or agencies.
At least 75% of goods produced in the Alat Free Economic Zone by investors must be exported outside of the Republic of Azerbaijan.
The land lease rates are determined individually in the Alat Free Economic Zone, based on the proposal made by investor. These rates may vary depending on factors, such as the size of the plot area, the extent of value added, the scale of production, the investment amount, the number of employees, and other relevant considerations.
Minimum requirement for the size of the plot area available for investors in the Alat Free Economic Zone is 2 ha. According to the internal policy and procedures, the site coverage ratio is 50%, which means that 1 ha should be closed area, allocated for production and warehousing, while the remaining 1 ha should be designated for open area such as parking spots, pedestrians, roads, sidewalks, landscaping, and other such necessities. For example, in practice, there are registered legal entities with different plot areas such as 2.5 hectares, 4.8 hectares, 21 hectares, 16 hectares, etc.
There are no restrictions on the required number of employees.
The utility rates in the Alat Free Economic Zone are the same as in the base economy.
Eligible investors who meet the target investor criteria of the Alat Free Economic Zone, should fill in the Preliminary Enquiry Form or send enquiry via email or website.