Azernews.Az

By Nigar Orujova

Azerbaijan and Russia are continuing to strengthen business cooperation, thus increasing number of mutual agreements and business forums.

The Russian Federation Council ratified on October 28 the Russian-Azerbaijani intergovernmental agreement on the encouragement and mutual protection of investments, Russian News Agency TASS reported.

The document, which was signed in Astrakhan on September 29, 2014, aims to provide the most favorable environment to the investors of the two countries.

The agreement also guarantees the protection of investments against forcible seizure under nationalization or expropriation – except in cases where such measures are taken in the public interest – subject to procedures established by the laws of the contracting parties.

It applies retroactively to investments made by investors since January 1, 1992. “Investors are provided with a fair and equitable investment regime, that assumes the same conditions as domestic investors or investors of third countries,” reported the relevant committee on international affairs.

The ratification of this agreement will allow investors from Russia and Azerbaijan to operate in a long-term, stable and predictable legal environment, protect their interests, as well as strengthen economic and trade cooperation between the two countries, which meets the interests of Russia, the committee of the Federation Council said.

Last year Russia ranked seventh among all countries investing in Azerbaijan, and in the first half of this year, Russia has rose to fourth place.

Expanding economic cooperation with Russia will give an additional impetus to the development of entrepreneurship in Azerbaijan, according to a statement by Intigam Huseynov, the deputy chairman of the Azerbaijani-Russian Chamber of Business Cooperation.

“A big export market is needed for the continuous development of businesses. At present, Russia is the largest export market for Azerbaijani entrepreneurs,” he stressed.

“Therefore, the expansion of economic cooperation with Russia will be an additional impetus for entrepreneurship. I would like to specially highlight the North-South international transport corridor, which will not only increase the transit potential of Azerbaijan, but will also be an additional shipping route to Russia,” noted Huseynov.

Azerbaijan pays special attention to the development of entrepreneurship, confirmed by the recent amendments to the legislation.

Earlier, President Ilham Aliyev signed a decree minimizing the number of licenses, ensuring transparency and simplifying the rules on issuing licenses.

“Taking away even the smallest obstacle to the development of entrepreneurship is a huge help to the private sector. A decision taken recently by the government has eliminated a very large obstacle, so I think that this will give a great impetus to the development of entrepreneurship in Azerbaijan,” he added.

Huseynov noted that the violations committed in the course of inspections, led to the closure of many small and medium-sized enterprises, as employers could not withstand such loads.

Entrepreneurs are one of the main economic pillars of any country, he noted.

At present, Azerbaijan and Russia plan to strengthen the strategic partnership that has been established between the countries.

Recently, the two countries have held a number of business forums both in Russia and Azerbaijan, reaching several agreements that will help develop cooperation in many sectors.

Azerbaijan is interested in intensifying investment and expanding the operations of its companies, further increasing trade turnover volumes in general, with Russia and its regions.

The trade turnover between Azerbaijan and Russia amounted to $1.34 billion in this January-September (8.74 percent in the total volume of foreign trade turnover of the country), which is almost two percent less than the same period last year. The decrease is connected with economic troubles around the world.

To date, Russia has invested more than $1.8 billion in Azerbaijan's economy, while Azerbaijan has invested over $1 billion in Russia.

There are over 600 companies operating with Russian capital in Azerbaijan, including major manufacturers like Gazprom, LUKOIL, KAMAZ and VTB Bank.

About 200 Russian companies in Azerbaijan are 100 percent financed by Russian capital and 300 are part of a joint venture.

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Nigar Orujova is AzerNews’s staff journalist, follow her on Twitter: @o_nigar

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