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AZE - CHANGES TO LEGISLATION

Considerable changes have been made to the Labour Code, Migration Code and other Laws of the Republic of Azerbaijan.

Thus, the Labour Code of the Republic of Azerbaijan has been amended. Accordingly, the Labor Code now defines certain categories of specialists working in the newly liberated territories of the Republic of Azerbaijan. These categories include persons who have state issued document on profession, secondary qualification, and higher education and have at least 24 months of work experience during the last 60 months and, those who work on the basis of a labor contract in the liberated territories of the Republic of Azerbaijan.  According to the changes, those persons are given the right for an additional leave for a period of 5 calendar days, regardless of the duration of already available annual and additional leaves. Also, compensation in special cases provided by the labour legislation should be applied to such specialists provided they have signed employment contract for a minimum of one year. Furthermore, actual address along with the legal address of employer must be stated in employment contract. Please note that these changes are effective January 1, 2023 to January 1, 2028.

Moreover, the on Law “On social insurance” of the Republic of Azerbaijan (“Law”) has been amended as well. According to the changes, the Law now defines the subsidization of compulsory/mandatory state social insurance fees. Part of such fees, as stated in the Law, will be compensated to the insured by the government at the expense of the state budget in the manner prescribed by the legislation. Also, compensation will be paid to non-state contractors/companies operating in the liberated territories of the Republic of Azerbaijan except for the companies operating in finance, cargo transportation, oil and gas sector, as well as state-sponsored organizations providing goods (works and services) (except for resident contractors carrying out works and services within the newly liberated territories). The following part of the compulsory/mandatory state social insurance premium will be subject to subsidization:

  • From January 1, 2023 to January 1, 2026 - in the amount of 100% percent;
  • From January 1, 2026 to January 1, 2029 - in the amount of 80% percent;
  • From January 1, 2029 to January 1, 2031 - in the amount of 60% percent;
  • From January 1, 2031 to January 1, 2033 - in the amount of 40% percent

Please note that the above amendments are in force from January 1, 2023 to January 1, 2033.

Furthermore, the following amendments have been made to the Migration Code of the Republic of Azerbaijan and the Law of the Republic of Azerbaijan "On State Duty".

 

According to the changes made to the Migration Code, the quota requirements for issuing work permits to those involved in labor activities in the liberated territories of the Republic of Azerbaijan have been abolished. It should also be taken into account that feedback of the Migration Authority regarding applications for a work permit related to the mentioned labor activity is now expected to be within a reduced period (3 working days). As well as in accordance with the changes, the term of the work permit can each time be extended for a period of up to 2 years for those involved in labor activities in the liberated territories of the Republic of Azerbaijan. Until the adoption of the changes, it was possible to extend the work permit for all categories of workers for a period of up to 1 year only. Please note that the Law come into force from January 1, 2023 to January 1, 2028.

Also, as of January 1, 2023 amendments made to the Law “On State Duty”. Thus, amendments determines appropriate amounts of duties for foreigner nationals involved in labor activities in the liberated territories of the Republic of Azerbaijan, who apply for a new or extending a work permit for periods of 6 months, 1 and 2 years. Newly determined amounts of duties vary between AZN 1200 to AZN 1800 depending on the duration of work permit. Previously, state fees for a work permit from 1 year 6-month (18-month) to 2-year were not established (this new fee schedule applies to work permits issued from one year six-month to two-year period). Additionally, the 10, 15, and 20-day periods for obtaining and extending work permits by the abovementioned persons were reduced by 5 days and respectively determined as 5, 10, and 15 days.

 

Lately some rumors have been circulating in the business community that there may be some upcoming changes relating to the "Work Permit exemption in IT sphere" for some categories of expatriates.  Indeed, certain changes have been made by the Azerbaijani Government with the aim to ease  labour migration process for specialists of IT companies, although such changes have not been made across the board. Thus, effective January 1, 2023 residents of the technology park (in case of a legal entity, its head and deputy(ies)) and specialists with experience in the field of information and communication technologies employed by such a resident to work in the territory of Azerbaijan shall be exempt from obtaining work permit in the Republic of Azerbaijan.

Please also note that the amount of minimum salary in the country has been increased. According to the Decree of the President of the Republic of Azerbaijan dated 05 January 2023, the amount of minimum monthly salary in the country has been determined as AZN 345 effective January 1, 2023.

​Taking into consideration that the amendments and changes have been also made to numerous clauses of the above stated Laws related other aspects of the business it is nearly impossible to discuss them all within a framework of one legal alert.