President of the Republic of Azerbaijan Mr Ilham Aliyev has signed a number of documents related to the ICT sector, providing for amendments to relevant laws and codes and their application.
According to these documents, as of 1 January 2023, Azerbaijan will be included in the list of countries where the largest benefits will be applied to the ICT sector in the region.
Thus, as a result of these changes, important tax benefits will apply to companies operating in the ICT sector, individuals and foreign nationals working in these companies.
In addition, significant benefits will also be provided for compulsory payments of state social insurance for both local workers and foreigners. According to the amendment to the Migration Code, employers will no longer required to obtain work permits for foreign specialists to work in the country.
This is one of the first set of amendments aimed at a specific sector of the country with regard to tax relief and social protection benefits. This shows Mr President’s special attention and concern for the development of the ICT sector in Azerbaijan.
Similar benefits have also been applied by many states in the region. This simply brings us to the same level as other countries in the region in terms of creating favourable conditions for the development of the ICT sector. The main goal of the implemented changes is to stimulate the ICT sector in our country, attract new players and turn Azerbaijan into a regional ICT centre. The benefits are also important in terms of foreign ICT companies opening branches or representative offices in Azerbaijan, attracting foreign investment to the local market and replacing “brain drain” with “brain gain”.
The latter is very important, because in order to turn Azerbaijan into an innovation space, it is necessary, first of all, to bring together a critical mass of specialists working in the ICT sector. This, in addition to preventing the brain drain from our country, requires the involvement of specialists from foreign countries. The benefits being introduced are also important in this respect. The arrival of foreign experts and international companies in our country, along with economic activity, will make an important contribution to improving the business environment and startup culture in Azerbaijan. As a country, we have experienced this experience in the energy sector. Investment in the country by leading multinational companies, along with important economic effects, have led to the formation of local professionals, including local business leaders. As a result, today international companies have trained hundreds of local leaders working both in Azerbaijan and abroad.
We believe that the amendments made to the laws and codes will revitalize Azerbaijan’s ICT sector in the medium term and contribute to the further development of entrepreneurial culture.