If the reason you are opening something in Azerbaijan is that you and your family want to live there, the choice of structure is a residency question first and a tax question second. This guide explains why.
An Azerbaijani limited liability company is cheap to form: the state fee is 15 AZN and the charter capital can be nominal. The trouble starts when the founder wants a residence permit from it. The head of a company with a foreign founder is exempt from a work permit, which sounds good, but that exemption pushes him onto a specific residency ground, Art. 45.1.6-1 of the Migration Code. The notes to that article attach conditions: paid-in charter capital of about 50,000 AZN, and from the second year a turnover test as well. A startup certificate waives the capital condition, but only for companies that obtain one.
So a founder who registers a small LLC and appoints himself its head finds that his own company cannot give him residency without a capital deposit. The usual workarounds, a local nominee as head or a work permit for the founder as an employee of his own company, add cost, dependency on a third party, or a refusal risk at the work-permit stage.
A branch (filial) of a foreign legal entity is a registered subdivision of your existing company. It is not a separate legal person. It has no founder, no shareholders and no charter capital. It acts on the basis of a statute approved by the parent, through a Head appointed by the parent under a power of attorney, and the parent remains liable for what the branch does.
Registration is with the State Tax Service, Department of State Registration of Legal Entities, on the parent's decision, the branch statute, the power of attorney to the Head, the parent's legalised constitutional documents, the Head's identity document and a state fee of 300 AZN. The statutory term is two working days.
Art. 45.1.6 of the Migration Code grants temporary residence to persons who hold the position of head or deputy head of a branch or representative office of a foreign legal entity. The documents are the notarised statute, the registry extract and the parent's power of attorney to the Head, or the appointment document for the Deputy. The notes that attach capital and turnover conditions apply only to Arts. 45.1.6-1 and 45.1.7, not to this ground.
Art. 64.0.13 exempts heads of branches and representations of foreign legal entities, and their deputies, from the work permit requirement. The consolidated text still lists deputies; the 2023 amendment that removed deputies affected the local-company exemption in Art. 64.0.13-1, not branches.
What this means in practice. The parent appoints its founder as Head and a colleague as Deputy Head. Both file for residency directly from their positions. No capital, no work permit, no local hire. The founder's spouse and children follow under Art. 45.1.5 once his card issues.
One residual point. A practitioner note claims deputies lost the exemption in 2023. The official consolidated Code says otherwise, but if the State Migration Service ever took the narrow view, the Deputy Head would take a branch-sponsored work permit (1,000 AZN for one year) and residency under Art. 45.1.8 instead. Neither path involves a capital condition.
| Question | Branch of your foreign company | New Azerbaijani LLC |
|---|---|---|
| Legal person | No. A subdivision of the parent. | Yes. Separate, limited liability. |
| Charter capital | None. | Nominal is allowed, but residency for the head needs about 50,000 AZN paid in. |
| Residency for the founder | Art. 45.1.6 as Head, no conditions beyond the position. | Art. 45.1.6-1 with capital and turnover conditions, or a work permit as an employee. |
| Work permit | Not needed for Head or Deputy Head. | Not needed for the head; needed for every other foreign employee. |
| State fee | 300 AZN | 15 AZN |
| Parent documents | Legalised registration documents, decision, statute, power of attorney. | Legalised founder documents, charter, decision. |
| Tax | Permanent establishment: 20% profit tax on attributable profit, 5% on profit remitted to the parent, VAT registration. | Simplified 2% regime available to small businesses, or 20% profit tax. |
| Liability | The parent is liable for the branch's obligations. | Limited to the company's assets. |
| Best for | A founder and a small team relocating; a service office invoicing foreign clients. | Local hiring, local customers, raising capital, selling the business later. |
Many clients do both over time: a branch now, because it gives residency in weeks, and a subsidiary later, when the operation has grown and the capital condition is no longer a problem.
We draft items 1 to 3 on your letterhead, with placeholders only for the things only you know: the address, the starting amount and the dates.
Tell us who is moving and what company you have. We answer with the structure, the articles and the costs.
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