A range of systematic and comprehensive measures are being implemented to diversify Azerbaijan’s economy, develop its regions and non-oil and gas sectors, support entrepreneurship, increase investment activity, competitiveness and export potential, and attract investment into the economy.
Efforts to further improve the country’s investment environment and promote investment in strategic priority areas with high potential are also ongoing.
Legal Framework for Investment Activity
The fundamental legal and economic principles governing investment activity in Azerbaijan, as well as guarantees for the protection of investors’ rights and legitimate interests, are regulated by the framework Law “On Investment Activity”. The Law establishes the main directions and priorities of state policy in the field of investment, investors’ rights and obligations, types of investment promotion measures, the regimes applicable to investments, state guarantees and other related matters.
In addition, foreign investors and their investments in Azerbaijan are accorded national treatment and most-favoured-nation treatment. No prior authorisation is required for foreign investment, nor is a local partner mandatory. No restrictions have been established on technology transfer. Furthermore, inspections in the field of entrepreneurship within the territory of Azerbaijan have been suspended until 1 January 2027 to promote the development of entrepreneurship in the country.
Investment activities in the Alat Free Economic Zone, including its legal regime, are regulated in accordance with the requirements of the Law “On the Alat Free Economic Zone”.
Investment Promotion
The government provides various incentives to promote investment activity in the country. These include tax and other state payment exemptions and benefits, concessional loans and subsidies, the establishment of economic zones, industrial parks and other special-regime zones, as well as the implementation of public-private partnerships and flexible mechanisms supporting the implementation of investment projects.
To provide administrative support to investors, a “one-stop-shop” approach is applied. Relevant services, including business registration, tax payments, and the issuance of licences and permits, are provided digitally through dedicated electronic platforms. Economic zones also offer “plug-and-play” infrastructure, providing facilities that are ready for operation.
To enhance Azerbaijan’s attractiveness to foreign investors, the country continues to expand its international legal framework. Currently, bilateral agreements on the promotion and mutual protection of investments are in force with more than 40 countries. In addition, bilateral investment funds have been established with a number of countries and are actively operating.
