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Azerbaijan introduces requirements and tax incentives for venture capital funds

17 June 2026 14:35 (UTC +04:00)

Requirements and tax incentives will be introduced for the operation of venture capital funds, APA reports.

This is reflected in the proposed amendments to the Law on Currency Regulation and the Tax Code, which were discussed at today's meeting of the Milli Majlis Committee on Economic Policy, Industry and Entrepreneurship.

According to the proposed amendment to the Law on Currency Regulation, the repatriation and subsequent transfer from the Republic of Azerbaijan of profits, dividends, and proceeds obtained from the realization of investments by venture capital funds and accredited investors from innovative projects (including startups) in foreign countries will not require a customs declaration or bank statement confirming that the funds were previously transferred from (or brought into) the Republic of Azerbaijan, provided that the initial investment was made in the form of an intangible asset or service, or that the income received is confirmed by a certificate issued by the competent tax authority of the foreign state.

Transfers for investments made by residents in innovative projects (startups) operating outside the Republic of Azerbaijan for the purpose of acquiring future equity participation (through future equity participation (share) agreements, convertible debt, and similar financial instruments) will be permitted without any amount limitation for venture capital funds, while accredited investors will be allowed to make such transfers up to the equivalent of USD 2 million per calendar year.

For the aforementioned transfers, the investor should be obliged, within 5 years from the date of the transfer, to submit to the authorized bank an extract from a foreign register confirming the acquisition of the participation interest (share) within the period specified in the agreement, or, if the entity attracting the investment is declared bankrupt or liquidated, to submit a document issued by the competent authority of the foreign state confirming such circumstance.

Firuza Vahid

venture capital venture capital funds tax incentives accredited investors startups innovation investment foreign investments convertible debt future equity agreements currency regulation Tax Code entrepreneurship Azerbaijan Milli Majlis economy legislation technology parks industrial parks venture financing