Short answer: The investment promotion certificate is issued by Azerbaijan's Ministry of Economy. For 7 years it gives the holder a 50% reduction in profit (income) tax, full exemption from property and land tax on project assets, and exemption from VAT and customs duty on imported machinery and technological equipment. Today the certificate goes mainly to strategic investment projects in areas approved by the President. The Ministry reviews applications within 5 business days.
What the certificate is — and what it is not
The mechanism was created by Presidential Decree No. 745 of 18 January 2016. The certificate is project-based: incentives apply to the investment project it was issued for, not to the company's entire business.
- What it is: a document entitling the holder to the incentives set out in the Tax Code and the Law on Customs Tariff.
- What it is not: a subsidy, grant or state guarantee. Industrial park residency, the Alat Free Economic Zone and oil and gas agreements are separate regimes with their own rules.
A foreign company cannot hold the certificate directly — it first needs an Azerbaijani legal entity or tax registration. See company registration in Azerbaijan for foreign companies.
The incentives — for 7 years
| Incentive | Extent | Applies to |
|---|---|---|
| Profit (income) tax | 50% reduction | Profit (income) from the project |
| Property tax | Full exemption | Project property |
| Land tax | Full exemption | Project land |
| Import VAT | Exemption | Machinery, technological equipment and installations (with a confirming document) |
| Customs duty | Exemption | Machinery, technological equipment and installations (with a confirming document) |
For comparison, the general regime is 20% profit tax, 1% property tax and 18% VAT — see taxes for foreign companies in Azerbaijan. The import exemption is not automatic: a separate confirming document is issued for imports.
Which projects qualify: strategic areas
The areas for strategic investment projects were approved by Presidential Decree No. 2462 of 1 February 2024 and updated by Decree No. 689 of 19 June 2026. Areas published by the Ministry of Economy include:
- processing based on local raw materials: metals, chemicals, construction materials, cotton;
- renewable energy equipment and energy production;
- waste management and recycling;
- seawater desalination;
- private industrial zones and manufacturing by their residents;
- pharmaceuticals and medicines (excluding packaging);
- agricultural production in agro-parks;
- ICT industrial products.
Note: the list changed in 2026. Confirm with the Ministry of Economy which area your project falls under and the minimum investment that applies before you apply. For example, strategic projects by residents of industrial quarters must be at least AZN 1 million.
Application process
| Step | What happens | Timing |
|---|---|---|
| 1. Preliminary eligibility query (optional) | Ask the Ministry whether the project meets the criteria — before investing | 5 business days |
| 2. Initial investment | 10% of the minimum investment amount must already be invested in the project | Project-dependent |
| 3. Application | Business plan, proof of the 10% investment, copy of the tax registration certificate | — |
| 4. Review | The Ministry checks the project against the criteria | 5 business days |
| 5. Issue | The Ministry notifies the State Tax Service and State Customs Committee | 3 days |
| 6. Import confirmation | Obtained for imported equipment | — |
Five mistakes investors make
- Investing before checking eligibility. If the project turns out not to fall under a strategic area after the 10% is in, that money gets no relief. Use the preliminary query.
- Relying on an old list of sectors. The 2024 and 2026 decrees changed the areas — information from a few years ago may no longer apply.
- Applying the incentive to the whole company. Relief is project-based; keep separate accounts for income and assets outside the project.
- Importing without the confirming document. Without it, equipment clears customs with VAT and duty under the general rules.
- A weak business plan. It must follow the Ministry's methodological guidance and the criteria in the Rules — gaps lead to refusal.
Frequently asked questions
How long do the incentives last?
7 years from the date the certificate is issued.
Can a foreign investor obtain the certificate?
Yes, through an Azerbaijani legal entity (for example, a foreign-owned LLC), if the project meets the criteria.
Is profit tax fully waived?
No. 50% of the profit tax on the project is relieved; the rest is payable.
How long does review take?
5 business days. A preliminary eligibility query is also answered within 5 business days.
Can any sector apply?
No. Certificates go to projects in strategic areas approved by the President; the list was updated in 2026.
How we can help
Affidacons helps investors assess whether a project fits the strategic areas, align the business plan with the Rules, apply to the Ministry and account for the tax and customs incentives. See our corporate and commercial advisory services, or contact us.
This article is for general information and is not legal or tax advice. It is based on official Ministry of Economy pages and official announcements on Presidential Decrees No. 745 (2016), No. 2462 (2024) and No. 689 (2026), as of September 2026; rules and minimum amounts may change. Obtain advice on your specific project before making decisions.
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