Freedom for Small and Medium Business

To ensure the freedom of small and medium enterprises in Azerbaijan the spirit and implementation of local legislation must comply with the European standards. As noted in the ranking of world economies «Doing-Business-2015", the development of this segment in the country has been slow and inconsistent, and the "protection of the rights of small investors" is located on the 51st place among 189 countries.

The reason for this, according to the chairman of the non-governmental Centre for Economic Research Ghalib Togrul, is the absence of the concept of "medium-sized businesses." Even in the decisions of the Cabinet of Ministers classification refers exclusively to small business - with an annual turnover of finance in retail trade and the agricultural sector at 250 000 AZN, in building - up to 500 000 AZN, and in wholesale trade - up to 1 million manat. "Europe, to which the officials refer, relates differently to this - there the annual turnover of an average business owner with the number of staff up to 250 people is up to 50 million euros, in small businesses about 50 people create a turnover of up to 10 million euros, and in the micro sector about 10 persons create a turnover of up to 2 million euros," said the expert.

According to him, the development of an independent business is hindered, first of all, by checks, although their number has declined. If entrepreneurs met representatives of 10 government agencies before, now they meet local executive power, the Ministry of Taxes, as well as the Ministry of Economy and Industry. There is also a technical problem (at first glance), of obtaining licenses and registration of real estate, which, however, casts the country back in the rankings.

According to the Doing Business-2015, on free enterprise in 2014 Azerbaijan is at the 80th place among 189 countries (last year it was at the 70th place). In particular, on the indicator "registering property" Azerbaijan took the 10th place, "tax" - the 33rd, "dealing with construction permits" – the 150th, "access to power" - the 159th, "the development of cross-border trade"- the 162nd, "performance of contracts"- the 31st, "investor protection"- the 51st,"solving problems of insolvency and transparency of bankruptcy proceedings”- the 94th,"getting credit"- the 104th.

Interestingly, though Azerbaijan has improved its position on the construction permit for representatives of big business, middle and, especially, small business is facing great challenges in negotiations - because of paperwork and 28 mandatory procedures, stretching for about 9 months. So the country is the 150th in row (the year before it was at the 180th position).

Small entrepreneurs are willing to reduce the rates of tax deductions, improve access to electronic services, raise awareness of the legislation through the TV channels and the Internet resources. It would be good to simplify customs procedures and reduce their volume, said the respondents. --17D-

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