Azerbaijan is preparing to expand long-term tax incentives for private-sector technology companies operating as technology park residents. The proposed changes are aimed at strengthening the country’s technology and innovation ecosystem and making the residency regime more attractive for IT companies, startups, entrepreneurs, and export-oriented businesses.
Under the proposed framework, eligible companies that obtain technology park resident status from January 1, 2027 may receive tax benefits for up to 20 years. The regime is expected to apply to non-state technology park residents, including companies where direct or indirect state ownership does not reach 51%.
The incentives may cover several major taxes. Qualifying legal entities may be exempt from profit tax on eligible activities, while individual entrepreneurs may receive income tax exemptions. Dividends distributed from qualifying activities may also be exempt from tax, subject to the conditions established by the legislation.
Employees of eligible technology park residents may also benefit from a personal income tax exemption on their salaries for a 20-year period beginning from 2027. The incentives may apply to qualifying employees of residents operating both inside and, in certain cases, outside the physical territory of a technology park.
Additional requirements may apply to larger companies, including conditions related to export revenues and the transfer of export proceeds into bank or payment accounts in Azerbaijan. The proposed amendments were returned to Parliament with additional changes intended to broaden the incentive regime, while existing technology park residents are expected to retain the legal treatment already available to them.
