One of the main issues for entrepreneurs wishing to establish a new production facility, expand an existing business or invest in new technologies is related to costs. Expenses for the purchase and import of equipment, establishment of a production facility, land and property related costs, etc. may increase the financial burden of an investment project.

In order to support the implementation of such projects, the investment promotion mechanism is applied in Azerbaijan.

This mechanism, operating since 2016, envisages the application of certain tax and customs benefits to investment projects of entrepreneurs. Because of this, the government supports the promotion of investments in areas considered priorities, the expansion of local production and the creation of new production opportunities.

In June of the current year, the scope of strategic directions for which an investment promotion document is issued was further expanded.

What does the investment promotion mechanism provide to an entrepreneur?

An investment promotion document can be obtained by legal entities and individuals engaged in entrepreneurial activity without establishing a legal entity. An entrepreneur is entitled to the following benefits for a period of 7 years from the date of issuance of the document:

-        50% benefit on profit or income tax;

-        exemption from land and property taxes;

-        exemption from customs duty and VAT on the import of machinery, technological equipment and devices.

As a result, an investment promotion document enables the entrepreneur to reduce costs in the first years of establishment and operation of the project. The result of this support is not limited only to the application of benefits. Through the mechanism, the expansion of production, the creation of new products, the import of technological equipment into the country and the directing of investments to various sectors of the economy are stimulated.

The number of strategic directions has been increased to 17

By the Decree signed by the President of the Republic of Azerbaijan in June 2026, the number of strategic directions for which an investment promotion document is issued has been increased to 17. With the change, new investment opportunities have been created, particularly in the areas of agriculture, agricultural production and processing, as well as the production of industrial products related to ICT. At present, investment promotion documents are issued for projects under the following strategic directions until 1 January 2029:

-        production projects based on a local raw material base (metal ore, aluminium, oil, gas, chemical products, construction materials, cotton and silkworm cocoons);

-        projects for the production of equipment used for energy production from renewable energy sources;

-        projects for energy production from renewable energy sources;

-        waste management and recycling projects;

-        seawater desalination projects;

-        projects for the establishment of private industrial districts and production projects implemented by residents of industrial districts;

-        production projects of non-oil and gas industry enterprises privatized through investment competitions held after 1 January 2023;

-        projects for organizing local production of products not produced in the Republic of Azerbaijan;

-        projects for the production of medicines and pharmaceutical products (except for packaging activities);

-        projects for the repair of railway rolling stock and the production of spare parts for it;

-        projects for the production of military-purpose products;

-        projects for the production and processing of agricultural products carried out in agroparks;

-        projects for the production of fertilizers, pesticides, seeds and feed products used in agriculture;

-        projects for the sorting and packaging of agricultural products;

-        projects for the establishment of fourth-generation greenhouse complexes equipped with automated climate control systems (minimum 3 hectares);

-        projects for the production of agricultural machinery, as well as elevator, grain silo, cold storage, sorting, storage and packaging equipment;

-        projects for the production of industrial products in the field of information and communication technologies.

It is important to note that most of the new directions are related to agriculture. Investment promotion opportunities have now been created not only for the production of agricultural products, but also for projects covering the entire value chain of this sector. Benefits are envisaged to enable an entrepreneur to establish a production and processing enterprise in an agropark, produce fertilizers, pesticides, seeds and feed, and establish an enterprise for sorting and packaging products. At the same time, the production of agricultural machinery, elevators and grain silos, cold storage facilities, as well as sorting, storage and packaging equipment has also been included in the scope of the investment promotion mechanism. A separate opportunity has also been created for agricultural projects based on modern technologies. The establishment of fourth-generation greenhouse complexes equipped with automated climate control systems and having an area of at least 3 hectares is among such projects.

The designation of the production of industrial products in the field of ICT as a separate strategic direction also allows technology based production projects to benefit from the mechanism.

The figures indicate the positive impact of the mechanism

Up to now, 633 investment promotion documents have been presented to 528 entrepreneurship entities. Already, 552 projects that have received an investment promotion document have started operation. At the same time, 6,604 supporting documents have been issued for the import of machinery, technological equipment and devices. Machinery, technological equipment and devices with a total value of USD 1.5 billion have been imported. The amount of benefits obtained by entrepreneurs on taxes and duties applied during import amounted to USD 350.5 million.

These indicators show that the investment promotion mechanism is an effective tool that creates real economic benefits for entrepreneurs and supports the implementation of investment projects.

Where can entrepreneurs apply to obtain the document?

Entrepreneurs can apply to the Ministry of Economy or to SME Houses operating in Baku City, Ganja City, Khachmaz, Yevlakh and Shusha cities to obtain an investment promotion document under the strategic directions. For additional information and consulting, it is possible to apply to the Call Center via number 131.

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