#243 AFEZ Chairman Reveals Azerbaijan’s Manufacturing Gateway Between Europe and Asia
23.07.2026 26 min Staffel 5 Episode 201
Zusammenfassung & Show Notes
Azerbaijan Is Open for Business: Inside a Nation's Drive to Attract Global Manufacturing Investment
For many international executives, Azerbaijan still enters the conversation primarily through the lens of oil and gas.
After spending the past week on the ground, visiting industrial sites, speaking with business leaders, and meeting representatives from government and free economic zones, a different story emerges.
Azerbaijan is actively positioning itself as one of the most ambitious economic diversification projects between Europe and Asia.
The country's leadership is increasingly focused on developing manufacturing, logistics, technology, tourism, renewable energy, and export-oriented industries as part of a broader strategy to reduce dependence on hydrocarbons and attract international investment. Recent investment and economic development initiatives continue to emphasize the growth of the non-oil economy, industrial infrastructure, and export-driven business models. [azernews.az]
What makes Azerbaijan particularly interesting is its geography.
Situated at the crossroads of Europe, Central Asia, Türkiye, the Caspian region, the Middle East, and China, the country occupies a strategic position along major East-West and North-South transport corridors. This location is increasingly being leveraged to strengthen Azerbaijan's role as a regional logistics and manufacturing hub.
One of the most visible examples of this ambition is the Alat Free Economic Zone Authority (AFEZ).
During an exclusive interview with Valeh Alasgarov, Chairman of the Board of the Alat Free Economic Zone Authority, the vision became clear: create a business environment where logistics, legislation, infrastructure, and incentives work together to attract high value-added, export-oriented manufacturers.
Located adjacent to the Baku International Sea Trade Port, AFEZ offers access to maritime, railway, and highway networks. Future plans also include a dedicated cargo airport inside the free zone, designed to support both industrial cargo operations and business aviation.
According to the Authority, investor services are centralized through a streamlined administrative process, industrial plots are delivered with ready-to-use infrastructure, and companies benefit from incentives including zero corporate tax and zero customs duties within the zone.
From industrial parks and logistics infrastructure to tourism development and international exhibition activity, Azerbaijan is investing heavily in creating the conditions necessary for long-term economic growth. The strategy is increasingly centered around attracting foreign direct investment, supporting private-sector development, and building globally competitive industries. [azernews.az]
As part of our
For many international executives, Azerbaijan still enters the conversation primarily through the lens of oil and gas.
After spending the past week on the ground, visiting industrial sites, speaking with business leaders, and meeting representatives from government and free economic zones, a different story emerges.
Azerbaijan is actively positioning itself as one of the most ambitious economic diversification projects between Europe and Asia.
The country's leadership is increasingly focused on developing manufacturing, logistics, technology, tourism, renewable energy, and export-oriented industries as part of a broader strategy to reduce dependence on hydrocarbons and attract international investment. Recent investment and economic development initiatives continue to emphasize the growth of the non-oil economy, industrial infrastructure, and export-driven business models. [azernews.az]
What makes Azerbaijan particularly interesting is its geography.
Situated at the crossroads of Europe, Central Asia, Türkiye, the Caspian region, the Middle East, and China, the country occupies a strategic position along major East-West and North-South transport corridors. This location is increasingly being leveraged to strengthen Azerbaijan's role as a regional logistics and manufacturing hub.
One of the most visible examples of this ambition is the Alat Free Economic Zone Authority (AFEZ).
During an exclusive interview with Valeh Alasgarov, Chairman of the Board of the Alat Free Economic Zone Authority, the vision became clear: create a business environment where logistics, legislation, infrastructure, and incentives work together to attract high value-added, export-oriented manufacturers.
Located adjacent to the Baku International Sea Trade Port, AFEZ offers access to maritime, railway, and highway networks. Future plans also include a dedicated cargo airport inside the free zone, designed to support both industrial cargo operations and business aviation.
According to the Authority, investor services are centralized through a streamlined administrative process, industrial plots are delivered with ready-to-use infrastructure, and companies benefit from incentives including zero corporate tax and zero customs duties within the zone.
From industrial parks and logistics infrastructure to tourism development and international exhibition activity, Azerbaijan is investing heavily in creating the conditions necessary for long-term economic growth. The strategy is increasingly centered around attracting foreign direct investment, supporting private-sector development, and building globally competitive industries. [azernews.az]
As part of our
#Composites360onTour coverage, we will continue showcasing the people, projects, industrial clusters, and investment opportunities shaping Azerbaijan's next chapter.
YouTube Episode: https://youtu.be/Vco6JbYk2A8
YouTube Episode: https://youtu.be/Vco6JbYk2A8
Transkript
So wonderful, good afternoon,
dear LinkedIn community.
One more time here in Azerbaijan.
The next stop is now with me,
the chairman of the board
of Alat Free Economic Zone
here in Azerbaijan.
And thank you so much, Mr. Chairman,
for having us
at your precious site here at AFEZ.
Nice to meet you
Mr Alasgarov, this free zone
is often a gateway
between Europe and Asia.
And also, how do you see
the close proximity to the seaports?
Let's start with the location
of your area.
-It's a very important point
to have attractive for investors.
Location of the free zone
or territory of the free zone.
And we selected this place
because Alat Free Economic Zone
located in vicinity
of Baku international sea trade port first.
Second at the intersection
of transport corridors
from east to west and backwards
from north to south and backwards.
It means that our clients will have
and will have access
to all kinds of transportation,
logistics services
using seaways and railways, motorways.
And as I said in our previous meeting,
our investors still airlines,
start construction of airport
at the territory
of the Alat Free Economic Zone
and it will be ready to use not later
than in March / April of 2027.
It means that our clients,
our potential investors,
will have access not only to seaways,
motorways, railways,
but at the same time to airways.
And it is a very important point
for high tech industries
because they will use air cargo
ways, not railways, not motorways etc.
and because of it, I am absolutely sure
that our clients
will have acceptable for them.
It's profitable for them.
Access to all kinds of transportation,
logistics, services.
It is a very important point,
not only for Alat Free Economic Zone
or any other free zones,
or for any other industrial zones.
-Mr. Chairman,
allow me a follow up question,
because I'm very much involved
in aerospace,
business, aviation, general aviation.
So this is worldwide a very,
as far as I know,
a very specific solution
that inside a free zone
there is an airport. How come?
-To be more attractive
than any other free economic zone,
not only in surrounding countries,
but in much more wider geography,
if we will not be more attractive
than any other free economic zone,
why investors
will come to the Alat Free Economic Zone.
And because it
we made everything possible
to increase the attractiveness
of the Alat free economic zone.
And one of these decisions
is establishment of cargo airport
at the territory
inside of the free economic zone,
with direct access of our clients
to this type of services.
It will increase the attractiveness
of the Alat Free Economic Zone for investors
and especially for high tech companies.
So you are also becoming independent
with the air cargo from sea.
If there's a problem on sea,
as we sometimes experience
and allow me the question,
what kind of airplanes air cargo planes
can land here, is it really also the
-Any
even the 747 Boeing 747 Boeing freighter?
-Any.
Okay. And if the general manager
wants to fly with his private jet into.
No problem, no problem.
-So you got a general aviation terminal.
Business aviation section of this airport
and general manager,
anybody if they want to use their.
-Private jets.
Private jets. No problem, no problem.
-Because we have to know
this is a bit a remote place.
So in the remote place
you have full access by car,
by sea, and now with the plane.
So this is basically
a strong diversification
that you are carrying out
with the economic free zone.
You are diversifying
and you are differentiating yourself
from other free zones.
Yeah, in a massive way.
Of course, because any free zones
is competitors, our competitors,
and we are in competition
with any other free economic zone
in surrounding countries.
Of course, if we will not be
more attractive
than any other free economic zone
in the region,
and even in much more wider geography,
why investors
will come to the Alat Free Economic Zone.
You showed me the sketch of this airport,
and you can see also air cargo terminals.
Quite, quite a big number
-cargo village.
Tell us about the cargo village.
-Cargo village means that any businesses
which want to bring his products
to the Alat Free Economic Zone,
or from the economic zone
can use this cargo village,
these facilities, to bring their goods,
to take their goods next to their
doors, next to their businesses.
Okay. Very close. Each company will have
its own cargo village.
And how is it planned?
Will the planes stay there overnight
if necessary? Longer periods
or they just come in and go on?
But they can stay overnight.
-There is space for planes,
which will stay here one hour, one night.
One day.
You can accommodate everything.
-No problem.
Congratulations.
Good. Innovative idea.
Makes you really special in that case.
Now, I have visited some
of other places in Azerbaijan,
and I'm really impressed
by the number
of manufacturing companies in Azerbaijan.
Let me ask you, Mr. Chairman,
what kind of industries
are you targeting with AFEZ,
with Alat Free Economic Zone?
Businesses engaged in high value,
added export
oriented manufacturing businesses
engage in high value
added, export oriented manufacturing,
using, of course, best technologies
and best international standards.
Only these type of businesses. Not trading,
not warehouses, etc.. Manufacturing.
-Manufacturing and as you say,
value addition.
That assumes you have a product,
a raw material
that becomes value addition on it
and then can be exported from here.
-Yes, with certificate of origin
Made in Azerbaijan.
We have this Certificate.
Our investors
need to establish businesses.
Manufacturing. Full cycle
of manufacturing.
So today, Azerbaijan is very much driven
by oil and gas.
Does oil and gas play here a role
or are you diversifying?
The goal of the establishment
of the Alat Free economic zone
is diversify economy
of the Republic of Azerbaijan.
Very important point.
Our clients is businesses, as I said,
engaged in high value added,
export oriented manufacturing
and export oriented
means that at least 75% of goods
produced in the Alat Free Economic Zone
they are obliged
to export outside of the Republic
of Azerbaijan.
And it is very important point.
-So that's the idea
of having the value addition
in Azerbaijan,
but not for Azerbaijan can be,
but mainly for export oriented companies.
Yes, if we want to have successful story.
-It has to be like this.
The Azerbaijan market.
Not so big.
We have 10.5 million buyers only.
It means that if you will orient them
to the local market,
it will be small businesses
oriented to the local market.
And because it high value added,
export oriented manufacturing
and it is not the first time in history.
For example, in Ireland in 1959,
they established
Shannon Free Economic Zone
in vicinity of Shannon
International Airport.
And this goal and this goal for high value
added export oriented manufacturing.
At that time, for example, Ireland
was the poorest country of the Europe.
GDP per capita of Ireland at that time
was maybe 12 times less
that GDP per capita of USA
nine times less than the GDP of UK.
But today GDP of Ireland per capita
is higher than GDP
of USA, UK, Germany, etc..
Because also the big tech companies
are their Microsoft.
Not only
-...the Google not only,
but also manufacturing.
Do you take Shannon a bit
like an example for Azerbaijan
as this gateway
is this your inspiration also?
-Yes. We used the experience
of Shannon managers
who spent decades of their life
in the Shannon free economic zone.
We used their experience.
Then they prepared legislation
of the Alat free economic zone. Planning.
Not only master planning,
even detailed planning
of these tasks sectors
was made by guys from Shannon.
Now, Mr. Chairman, what caught me,
my special attention
is also the independency
of this free economic zone.
So you have an independent
legal regime here.
And can you tell us about why do you need
a special independency
here from the rest
of the Azerbaijan lawmaking
and law execution system?
-Let's back to the history.
When in Ireland, the government of Ireland
decided to establish
a free economic zone.
They adopted special law
on the Shannon Free economic zone
primarily as primary law.
Which gives independence
of the free economic zone of authority
and extraterritoriality
for free economic zones
and our studies, for example.
I hope you know that around the world,
more than 4000,
5000 free different types of free zones.
No, I did not know about that.
Always increasing by the day basically
Thousands.
-Yeah, yeah.
But if somebody will ask me,
could you name most successful story?
Ireland. Singapore.
China, including Taiwan,
United Arab Emirates and Azerbaijan.
And it will be Azerbaijan.
We used this experience.
Because without extraterritoriality
and independence of regulatory body.
How investors will spend
a lot of time efforts
because of bureaucracy.
The bureaucracy to get all the licenses
to go ahead.
Same as in any other country.
-In Germany. When you build a company,
it takes weeks, months to do that.
-And because it
we have such a legal regime
which guarantees extraterritoriality
of the Alat Free economy zone
and independence
of other Free economic zones of storage,
it means that our clients,
they don't need to touch
with any to any state
entity, governmental bodies
only we and them.
Registration, licensing,
land leasing certification.
Everything only in this office.
-So it's a very streamlined process
for your customers. For the investor.
-And if, for example,
if we agreed with potential investors
about their plants,
what they want to build,
what they want to produce.
All procedures will take one week.
-Mr. Chairman, do you have an example?
A life example?
We don't need to mention names,
but do you have an example for us,
for our community,
to explain one specific investment case
that you think was very fast implemented.
What it means very fast
for small businesses, very fast.
It's one year.
We don't have such small businesses.
And because it's impossible
to say in one year,
for example, first,
which started production
of their agreed products,
they spent more than two years
for planning construction.
And maybe they will finish
in July or August this year.
-This is including Construction?
Yes. And in July or August
they will finish
from the day of planning permit
till production.
It will take three years.
But it is a very short form.
Big industries for small entities.
It is not short time,
but for big industries.
-You have to imagine the machines.
They have to be constructed.
The infrastructure has to be constructed.
So it's a very fast time
-Infrastructure:
We provide it to our investors,
industrial landlords
with ready to use
offsite and onsite infrastructure
and utility.
We did everything in advance of demand
because without such principal position,
nobody will come.
Nobody will wait
when we will provide to them water.
Natural gas, connection to motorways,
railways, etc.
etc. and because
it if you want to be successful,
it's obligatory
to have industrial landlords
ready to use industrial landlords
in advance of demand.
They want to come and to see
and to select this plot.
So, Mr. Chairman, with all due respect,
what you have made here.
In Europe, we have one issue
and that is find the right talent
for the production engineering people,
particularly skilled workers
and things like that.
How would you rate your free economic zone
in that respect?
Do you have sufficient employee available?
We have and we will have,
because every year approximately
120,000 young brilliant guys from schools.
Come to
universities. After universities
they need to find.
So you have a huge talent market
free available.
For our community, I can tell you
you have in Azerbaijan Turkish
very much also widespread
and English is standard here.
Absolute international communications
with the employees.
No problems?
-No, not a problem at all.
No language problems?
-Okay. Very,
very easy to to deal with employees
and get the talents recruited.
Even for Chinese, for example, businesses.
It's not for them to find Chinese
speaking persons in Azerbaijan.
-So, Mr. Chairman,
then I have my final question.
Of course, investors are also looking
always to have high returns
on their investments (ROI).
And in order to limit the risk,
they are looking for incentives.
Do you have a program on incentives
for companies
that would like to accommodate
and locate in your free zone?
Under our internal regulations
we can provide to our investors,
to businesses established by them
in the Alat Free Economic Zone.
such incentives like zero tax rate.
Any corporate
tax is zero zero.
Any corporate tax is zero.
Custom duties and taxes: zero.
And because it
in addition to that we have
industrial land plots
with ready to use infrastructure
and utilities.
It is in incentives to come to the place
where everything is ready. Plus.
And you can start kick off immediately.
-and no taxes, no custom duties.
It is this combination of incentives.
If you have, for example, tax incentives,
but you don't have ready
to use industrial land.
Then what's the point.
What's the point then
It's a combination of legislation
and incentives infrastructure.
So I see as a summary many,
many plus points
and benefits for investors here.
So first of all the reach is very easy.
So you've got air cargo coming in soon.
You got HR talent is available.
This is because of your excellent
education system here in Azerbaijan.
You got ready to use immediate kickstart
of places available on your grand place
here that we are seeing
out of the window here.
And you got zero taxes.
I mean this is a massive
competitive advantage.
-Zero corporate taxes
and zero custom duties and taxes.
-So Mr. Chairman, I thank you so much
for this deep insights
into your free economic zone.
I hope we can meet each other again
in Turkiye and in Azerbaijan.
And I wish you in the exploration
and getting more foreign direct investment
here in this country.
Very much luck.
I can wholeheartedly,
absolutely recommend it
because I've seen the Azerbaijan culture
and the community here.
It's very open minded
and I think it's a good choice
if you compare
with Shannon, Dubai, Taiwan, Singapore,
because the geography is also attractive,
in my view,
because, Central Asia
sometimes Southeast
Asia is too far for, for certain value
addition of products
because of the logistics.
But this is centrally located, Dubai
on the one side, Europe
on the other side, Turkiye,
and not so far away, China
not so far away.
So it's geographically
a good hub in that race.
Location is a very important point.
If you don't have access to all kinds
of transportation, logistics, services,
why you will invest at that territory.
Mr. Alasgarov, then my final ask of you
is if you would like to say something
into our camera, to our community.
What should they do
after they have listened to us?
What would be your call to action?
Businesses engaged in high value
at the export oriented manufacturing,
welcomed to the Alat Free Economic Zone.
And be sure that it is the best place
for your investments,
for your successful businesses
into the future.
-Thank you so much.
Thank you.