Azerbaijan has adopted amendments to its Tax Code, Migration Code and legislation on social insurance, business inspections and public procurement. The reform is designed to encourage technology investment, support innovative businesses and startups, attract international specialists and expand opportunities for locally developed digital products. Most of the new incentives are scheduled to take effect on January 1, 2027.
A central measure is the introduction of a 20-year tax incentive regime for eligible non-state technology park residents obtaining resident status from 2027. Subject to statutory requirements, qualifying income or profits, dividends and salaries of eligible employees may benefit from income and profit tax exemptions. Certain property and land tax benefits are also envisaged. Companies with substantial turnover may face additional export-related conditions, while existing residents are subject to transitional provisions.
The amendments also strengthen support for startups and investment. The duration of certain tax relief available under the startup certificate regime is extended from three to seven years. Accredited investors may be able to deduct qualifying startup investments from their taxable income or profit, within a limit of 50%. Additional incentives cover eligible crowdfunding returns, employee share arrangements and research and development expenditure, which may be deductible using a 2.5 multiplier subject to the applicable criteria.
For eligible technology park residents and startups, the package provides relief for certain technology services purchased from abroad for their own business activities. These may include cloud infrastructure, software, digital platforms and application programming interface services. The relevant exemptions are subject to specific conditions and do not generally extend to services acquired for resale.
The migration changes introduce a framework for foreign digital nomads and technology professionals. Eligible foreign nationals working remotely in fields such as information technology, artificial intelligence, cybersecurity and innovation may benefit from new visa and residence arrangements. The provisions establish income thresholds and additional documentation or registration requirements, depending on the type of permit sought.
Public procurement rules are also adjusted to make it easier for state buyers to test innovative solutions. New mechanisms address smaller purchases and pilot projects, including eligible innovative contracts with values of up to AZN 1 million and terms of up to 12 months. Certain qualifying purchases may also benefit from a preferential bid-evaluation adjustment. Separately, amendments clarify protections for entrepreneurs by restricting on-site inspection measures during the formal suspension of an inspection.
Taken together, the measures seek to reduce selected tax and regulatory costs, improve access to capital and public-sector customers, and make Azerbaijan more competitive as a base for technology businesses. The availability of each benefit will depend on the relevant status, activity, thresholds and implementation rules rather than applying automatically to every IT company or freelancer.
