Full exemptions from company tax, buy tax, actual property taxes and dividends for ten years are among the many incentives on provide to Israeli startups that select to relocate to Azerbaijan, “Globes” can completely reveal.
The choice by a rustic with a Shiite Muslim majority to make such a transfer through the present conflict, regardless of the wave of anti-Israel sentiment, is phenomenal and stunning. The transfer follows the launching of a tech park at the moment beneath building in Baku though the incentives being provided by the Azari authorities can be found for Israeli tech firms that arrange wherever within the nation. Sources have advised “Globes” that a number of Israeli tech firms are already in talks over relocation to Azerbaijan.
Above and past the incentives listed above, firm workers can pay 0% private revenue tax on month-to-month salaries as much as $4,700. So as to qualify for these incentives, firms will need to have been working for no less than one yr or have ten or extra full time workers, or annual income of no less than 200,000 manat (NIS 430,000).
As a part of this system, help is supplied for immigration to the nation, which incorporates exemptions from work permits, help in issuing residence permits and arranging logistical points akin to discovering places of work and lodging.
Azerbaijan is striving to turn into the expertise hub of the Euro-Asian area, and a gateway to the Turkic international locations. Baku’s relationship with Ankara relies on the concept of “one nation, two international locations.” Subsequently, firms that search broad operations in Turkey, when relations between Israel and Turkey are at an unprecedented low, will have the ability to profit from the depth of the relations between Turkey and Azerbaijan.
Time to be weaned from oil
This system is led by the Innovation and Digital Growth Company of Azerbaijan (IDDA), with the primary intention of diversifying the economic system. The oil and gasoline sector accounted for 47.8% of Azerbaijan’s GDP, 52.7% of budgetary sources and 92.5% of exports in 2022. Baku, they is conscious that the world is weaning itself from oil, and preparations are required to scale back dependence on the black gold.
Azerbaijan attracts inspiration from the Gulf international locations, which have been working tougher lately to diversify their economies and “wean” off fossil fuels. The UAE, for instance, launched a program final yr through which personal firms have been required to make use of 6% native employees in 2024 and 10% by 2026. Azerbaijan, alternatively, doesn’t oblige the businesses that relocate to make use of a sure proportion of native employees.
Nevertheless, IDDA is already working to coach related personnel, and funds scholarships for greater than 3,000 college students for IT programs. The intention is to coach as many juniors as doable, in order that they’ll be a part of the international firms. Subsequent yr, the variety of scholarships for locals is predicted to develop to five,000.
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IDDA regional VP mushy touchdown Pasha Aliyev, who’s accountable for relocating startups in Azerbaijan, speaks fluent Hebrew. He tells “Globes” that the initiative to draw Israeli firms is a part of a broader effort to construct a robust tech ecosystem in Azerbaijan. He says, “Our younger and multilingual inhabitants, mixed with quite a lot of completely different cultures, creates a dynamic and revolutionary workforce. As well as, our superior infrastructure permits firms relocating to the nation to settle and combine shortly of their new dwelling. This mix makes Azerbaijan a great location for tech firms searching for progress and innovation within the Asian market.”
Flourishing relations with Israel
Israel-Azerbaijan relations has flourished since 1992 primarily based on the sale of Azerbaijani oil to Israel and superior expertise Israeli weapons programs to Azerbaijan. Within the first half of 2024, in keeping with the Baku Customs Bureau, there was a 55% soar within the import of oil to Israel from Azerbaijan, amounting to $989 million. As revealed in Globes, regardless of the commerce embargo imposed by Turkish President Recep Tayyip Erdogan on Israel, Azerbaijani oil continues to circulate by means of the BTC (Baku-Tbilisi-Ceyhan) pipeline – the place it’s loaded onto tankers within the Turkish port metropolis of Ceyhan sure for Haifa. The primary motive for the dearth of injury to the oil provide is the shut relationship of Azerbaijan President Ilham Aliyev and Erdogan.
Within the different route, Azerbaijan is a significant buyer of Israel’s protection industries. It has procured, amongst different issues, Spike anti-tank missiles from Rafael, Hermes UAVs from Elbit, and Israel Aerospace Industries (IAI) Harop loitering munitions. Final October with the Azarcosmos company signed a cope with IAI for 2 OptSat500 satellites, which can substitute the Azarsky satellite tv for pc manufactured by Airbus, with which communication was misplaced in April 2023.
Thus the event of the tech sector in Azerbaijan will diversify each its economic system and its commerce relations with Israel. “We’re targeted on scale-up firms that can come to Azerbaijan, recruit native folks – and create a essential mass,” Aliyev explains. “We’re in common contact with our bodies in Israel, such because the Export Institute, and handle common communications with related our bodies in different international locations too.”
Revealed by Globes, Israel enterprise information – en.globes.co.il – on September 5, 2024.
© Copyright of Globes Writer Itonut (1983) Ltd., 2024.
