Azerbaijan Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in azerbaijan, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Information and Communications Technology
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Overview

Information and communications technology (ICT) is one of the four target sectors for economic diversification.  The government established several technological parks throughout the country that offer tax breaks and exemptions for companies.  These incentives include profit, land, and property tax breaks and VAT exemptions on imports for the first seven years after a company begins operations at the technological park.  The government is also investing in ICT to create “smart villages” in the returned territories.  Despite these projects and government plans to liberalize the telecommunications sector, the regulatory framework governing telecommunications and information technology requires further improvement.  

Similar to other sectors, intellectual property protection is weak in the IT industry, as the ability to control or protect intellectual property rights in the private sector is constrained.  Several large multinational companies have expressed concerns about unlicensed software in both the public and private sectors.  The IP Agency has not made significant progress. 

CLDP co-hosted a workshop on international commercial arbitration with the Bar Association of the Republic of Azerbaijan for more than 50 attorneys in Baku in 2023.  The comprehensive three-day program raised awareness among legal professionals of the benefits of arbitration as an alternative dispute resolution mechanism and led them through the process of representing parties in an arbitration proceeding from outset to conclusion.  CLDP plans to work with judges and other ADR professionals to increase their capacity to resolve disputes using arbitration and to build trust among all legal professionals in arbitration as a viable means of resolving commercial disputes.

The private cybersecurity sector is still nascent but growing.  Several international conferences on cybersecurity with a focus on commercial potential and foreign investment are planned for the last quarter of the 2023.

Leading Sub-Sectors

E-governance has been a successful area of collaboration between businesses and the Government of Azerbaijan.  The State Tax Service has moved tax payments online, the Customs Committee has introduced electronic application and payment services, and the “Asan İmza” mobile electronic signature technology enables the use of mobile phones as an electronic identity card and means of signing documents.  U.S. businesses with similar solutions may find opportunities in these modernization and e-government efforts.

Azerbaijan has been actively developing its satellite services to build its regional commercial telecommunications capacity.  Azercosmos, Azerbaijan’s space agency, is a quazi-governmental organization that successfully obtained and launched U.S.-produced telecommunications satellites in 2013 and 2018 and a French-made geo mapping satellite in 2021.  This year it purchased two new satellites while losing one to a meteor strike.  The new satellites will expand its geo mapping capabilities. 

Additionally, cybersecurity, personal data protection, and data analytics have been high-interest topics in Azerbaijan for the last few years.  U.S. companies with considerable experience in the field and working experience in the region might be successful in cooperating with the Azerbaijani government and private sector.  

Opportunities

E-governance and e-commerce solutions have good potential and present an opportunity for well-crafted and well-implemented solutions.  Consulting firms experienced in IT sector development may find their experience sought after by the public and private sectors in Azerbaijan.  Companies with expertise in satellites might benefit from Azercosmos’ interest in acquiring new capabilities.  The annual BakuTel IT expo provides global companies an opportunity to reach potential customers and investors throughout the Eurasian region. 

Both the Azerbaijani government and private sector holds cybersecurity conferences throughout the year that can offer opportunities to explore the market.

The government has expressed interest in investing in foreign-run ICT training centers.  In 2023, the first cybersecurity students graduated from the Israeli Azerbaijan Cyber Security Center.  The Azerbaijani government is looking to expand its technical training resources with American academic and technical partners.  In August 2023 the government announced its first five-year strategy on information security and cyber security strategy for 2023-2027.

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