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Ease of Doing Business in

Azerbaijan

Azerbaijan Download Profile (1751.1KB, pdf)
Region Europe & Central Asia
Income Category Upper middle income
Population 9,651,349
GNI Per Capita (US$) 6,560
City covered Baku

190

1

DB 2017 Rank

1

100

DB 2017 DTF (% points)

  • local_library
  • group
Topics DB 2017 Rank DB 2016 Rank info_outline Change in Rank DB 2017 DTF (% points) info_outline DB 2016 DTF (% points) info_outline Change in DTF (% points) info_outline
Overall 65 61 down
4
67.99 67.84 down
0.15
Starting a Business 5 5
-
97.74 97.75 down
0.01
Dealing with Construction Permits 127 121 down
6
63.63 64.13 down
0.50
Getting Electricity 105 104 down
1
64.83 64.10 up
0.73
Registering Property 22 21 down
1
82.52 82.55 down
0.03
Getting Credit 118 109 down
9
40.00 40.00
-
Protecting Minority Investors 32 30 down
2
65.00 65.00
-
Paying Taxes 40 41 up
1
83.52 83.08 up
0.44
Trading across Borders 83 85 up
2
72.28 71.48 up
0.80
Enforcing Contracts 44 43 down
1
65.66 65.66
-
Resolving Insolvency 86 82 down
4
44.77 44.68 up
0.09

Positive= Doing Business reform making it easier to do business.Negative= Change making it more difficult to do business.

DB 2017 Rank:

86

DB 2016 Rank:

82

Change in Rank:

down4

DB 2017 DTF (% points):

44.77

DB 2016 DTF (% points):

44.68

Change in DTF (% points):

up0.09

Indicator Azerbaijan Europe & Central Asia OECD high income
Recovery rate (cents on the dollar) info_outline 39.6 38.2 73.0
Time (years) info_outline 1.5 2.2 1.7
Cost (% of estate) info_outline 12 13.1 9.1
Outcome (0 as piecemeal sale and 1 as going concern) info_outline 0 .. ..
Strength of insolvency framework index (0-16) info_outline 7.5 9.9 12.1
  • Indicator Explanation Answer
    Recovery rate (cents on the dollar) 39.6
    Proceeding BizBank will initiate foreclosure proceeding, because it is cheaper and faster than insolvency proceeding. Additionally, secured creditors have the right to enforce their security interest even if other parties (debtor, unsecured creditors) start insolvency proceedings. foreclosure
    Outcome It will be difficult to find a buyer willing to purchase the hotel as a going concern. piecemeal sale
    Time (in years) Before BizBank can initiate foreclosure proceedings, it must give at least two months after the debtor fails to pay and then give one month notice of default to the debtor. The debtor or any other interested party may appeal the notice of default in the court within 21 days from the date of service. The creditor must register the notice of default with the State Register Service of Immovable Property within 7 days from its service upon the debtor. Once the notice of default is registered, BizBank may apply to a court for a judgment to foreclose upon the secured assets. During a preliminary hearing (0.5-1 month after filing), the judge reviews material and accepts Bizbank's case for consideration. A hearing will take place where Mirage and BizBank will present their claims. The court will issue a decision in Bank’s favor within several months. Mirage will likely appeal the decision (within 30 days), and the appeal will be decided within a few months and the decision becomes effective immediately. Within 3 days of receipt of the effective court judgment, the court bailiff must send an order on foreclosure to a specialized auctioneer. The entire adjudication process will take about 1 year. After that, a specialized auctioneer must publish two announcements – 30 days and 15 days before the proposed public auction sale. The first auction requires that the property be sold for at least 70% of the starting price. The second auction allows the sale of the foreclosed property at a price which covers the auction expenses and the secured obligations to the mortgagee and any senior mortgagee(s). In our case, it is likely that there will be two auctions, as it will not be easy to find a buyer. The entire process will take approximately 6 months until the proceeds are paid to BizBank. 1.5
    Cost (% of estate) The main expenses will include attorneys' fees of AZN 10,000 + a success fee of 10% of the value of the assets. 12.0
    Answer Score
    Strength of insolvency framework index (0-16) 7.5
    Commencement of proceedings index (0-3) 2.5
    What procedures are available to a DEBTOR when commencing insolvency proceedings? (a) Debtor may file for both liquidation and reorganization 1.0
    Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor? (b) Yes, but a creditor may file for liquidation only 0.5
    What basis for commencement of the insolvency proceedings is allowed under the insolvency framework? (a) Debtor is generally unable to pay its debts as they mature 1.0
    Management of debtor's assets index (0-6) 3.0
    Does the insolvency framework allow the continuation of contracts supplying essential goods and services to the debtor? Yes 1.0
    Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts? Yes 1.0
    Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0
    Does the insolvency framework allow avoidance of undervalued transactions? No 0.0
    Does the insolvency framework provide for the possibility of the debtor obtaining credit after commencement of insolvency proceedings? No 0.0
    Does the insolvency framework assign priority to post-commencement credit? (c) No priority is assigned to post-commencement creditors 0.0
    Reorganization proceedings index (0-3) 1.0
    Which creditors vote on the proposed reorganization plan? (b) Only creditors whose rights are affected by the proposed plan 1.0
    Does the insolvency framework require that dissenting creditors in reorganization receive at least as much as what they would obtain in a liquidation? No 0.0
    Are the creditors devided into classes for the purposes of voting on the reorganization plan, does each class vote separately and are creditors in the same class treated equally? No 0.0
    Creditor participation index (0-4) 1.0
    Does the insolvency framework require approval by the creditors for selection or appointment of the insolvency representative? Yes 1.0
    Does the insolvency framework require approval by the creditors for sale of substantial assets of the debtor? No 0.0
    Does the insolvency framework provide that a creditor has the right to request information from the insolvency representative? No 0.0
    Does the insolvency framework provide that a creditor has the right to object to decisions accepting or rejecting creditors' claims? No 0.0

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”.