Challenges to speech and political freedoms do not affect foreign investment in Azerbaijan, says State Department

Azerbaijan’s investment climate presents a mixed picture. The economy remains heavily dependent on oil and gas, which dominate both export revenues and the state budget. The slow pace of diversification and structural reforms continues to hinder development of a truly competitive and transparent business environment, the U.S. Department of State said in the 2025 Investment Climate Statement.

As noted, gaps remain, with notable concerns about judicial independence and transparency. These issues, combined with the dominance of a small group of government-connected holding companies and prevalence of state-owned enterprises, could deter potential investors.

In addition to energy, the transportation and logistics sectors represent another area for potential investment, particularly given the focus on improving the Middle Corridor and diversifying trade routes away from Russia.

The statement says although there are challenges related to speech and political freedoms, the overall situation does not significantly affect foreign investment.