Full exemptions from company tax, buy tax, actual property taxes and dividends for ten years are among the many incentives on supply 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 throughout the present battle, regardless of the wave of anti-Israel sentiment, is outstanding and stunning. The transfer follows the launching of a tech park at present below development in Baku though the incentives being provided by the Azari authorities can be found for Israeli tech firms that arrange anyplace within the nation. Sources have informed “Globes” that a number of Israeli tech firms are already in talks over relocation to Azerbaijan.
Above and past the incentives listed above, firm staff pays 0% private revenue tax on month-to-month salaries as much as $4,700. So as to qualify for these incentives, firms should have been working for at the least one yr or have ten or extra full time staff, or annual income of at the least 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 similar to discovering places of work and lodging.
Azerbaijan is striving to grow to be the know-how hub of the Euro-Asian area, and a gateway to the Turkic international locations. Baku’s relationship with Ankara is predicated on the thought of “one nation, two international locations.” Due to this fact, firms that search broad operations in Turkey, when relations between Israel and Turkey are at an unprecedented low, will be capable of 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 Improvement Company of Azerbaijan (IDDA), with the principle goal of diversifying the economic system. The oil and fuel 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 cut back dependence on the black gold.
Azerbaijan attracts inspiration from the Gulf international locations, which have been working more durable lately to diversify their economies and “wean” off fossil fuels. The UAE, for instance, launched a program final yr wherein non-public firms had been required to make use of 6% native staff in 2024 and 10% by 2026. Azerbaijan, alternatively, doesn’t oblige the businesses that relocate to make use of a sure share of native staff.
Nevertheless, IDDA is already working to coach related personnel, and funds scholarships for greater than 3,000 college students for IT programs. The goal is to coach as many juniors as potential, in order that they’ll be part of the international firms. Subsequent yr, the variety of scholarships for locals is anticipated to develop to five,000.
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IDDA regional VP comfortable touchdown Pasha Aliyev, who’s answerable 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 a wide range 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 house. This mixture makes Azerbaijan a really perfect location for tech firms on the lookout 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 know-how Israeli weapons techniques to Azerbaijan. Within the first half of 2024, in keeping with the Baku Customs Bureau, there was a 55% leap 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 via the BTC (Baku-Tbilisi-Ceyhan) pipeline – the place it’s loaded onto tankers within the Turkish port metropolis of Ceyhan certain for Haifa. The principle motive for the shortage of injury to the oil provide is the shut relationship of Azerbaijan President Ilham Aliyev and Erdogan.
Within the different course, 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 take care of IAI for 2 OptSat500 satellites, which can change 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 centered on scale-up firms that may come to Azerbaijan, recruit native folks – and create a vital 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.”
Printed by Globes, Israel enterprise information – en.globes.co.il – on September 5, 2024.
© Copyright of Globes Writer Itonut (1983) Ltd., 2024.
