Azerbaijan expects huge benefits from its first ever free trade zone
By Nigar Abbasova
Azerbaijan is currently engaged in creating its first-ever free trade zone. Special economic area is located in the Alat settlement of Baku’s Garadagh district and includes the territory of Azerbaijan’s Baku Sea Trade Port.
Creating a free trade zone is considered to be a milestone of Azerbaijan's policy to strengthen the country's position as a regional logistics and transportation hub.
Taleh Ziyadov, director general of the port, said that the registration of the residents of the free trade zone will begin in January 2017. Currently, preparation of legal documents required for the activities of the free trade zone is underway.
He noted the port has already attracted large companies from all over the world.
The free trade zone is expected to encourage transport-logistical industry, pharmaceutical cluster, and bases for the supply of oil plants as well as the spheres of manufacturing, packing and labeling.
Being located at a crossroads of Europe and Asia nearby important markets such as China, Turkey, Iran and Russia the new port has huge opportunities to become one of the leading trade and logistics hubs of Eurasia.
Ziyadov underlined that the free trade zone will make a huge contribution not only to the economy of Azerbaijan but a whole region. “We have set a goal to become the transport and trade hub in Eurasia. From this point of view it is essential to strengthen cooperation with large world ports and adopt their experience,” he said
The free trade zone will boost country’s economy, bring huge revenues to the state budget, and attract foreign investors.
Ziyadov underlined that the use of uniform tariffs will increase competitiveness of the Trans-Caspian International Transport Route which is considered to provide transport links between China and Europe.
Addressing a seminar on operations and management in sea ports Malena Mard, head of the EU Delegation to Azerbaijan, mentioned that Azerbaijan due to its advantageous geographical location has a great potential to turn into transportation and logistics centre connecting the North with South and the East with West. She underlined that the expansion of cooperation between the Baku Sea Trade Port and European ports, the use of advanced world technologies there is an important step to reach this goal.
The free trade zone is expected to bring up to $1 billion just in the first few years. Special tax and customs policy, which will be pursued in the territory of the free trade zone will also stipulate further development and simplification of a number of procedures. The privileges can cover the income tax, VAT, tax of profit and property tax. Growth of rivalry and absence of duties will give an impetus for the reduction in price of certain products and force local producers to improve the quality of products and expand the range of goods in the country.
Main objective of creating free trade zone in the territory of the port is to provide sustainable development of national economy, to raise its competitiveness, to strengthen the position of the country as a logistics and transport centre as well as to create diversified transport infrastructure.
Baku International Sea Trade Port located in the Alat settlement, 40 miles south of Baku. The construction of the Baku International Sea Trade Port started in November 2010.
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