State support for entrepreneurial development
Following the targeted and successful reforms carried out under the leadership of President Ilham Aliyev, the private sector has become a leading force in the economy, with the share of entrepreneurship in GDP reaching 81% and the share of employment reaching 77%. Wider use of state support instruments by the private sector creates favorable conditions for the establishment of new production and processing enterprises and infrastructure based on modern technologies in the non-oil sector and for accelerating investment in the real sector.
The mechanism of state financial support for entrepreneurship has been formed as a real source of meeting the financial needs of SMBs, which is mainly due to the use of preferential financing mechanisms at the expense of the Entrepreneurship Development Fund of the Ministry of Economy. The funds will be spent to finance investment projects in the development of the non-oil sector, the introduction of innovative technologies and export operations.
Pursuant to the new rules approved by the Presidential Decree of the Republic of Azerbaijan dated June 4, 2020, a new loan and guarantee facility for concessional lending to entrepreneurship of the Entrepreneurship Development Fund is also applied. In this regard, the Electronic Loan Platform (www.e-edf.gov.az) created by the Ministry, is of paramount importance in terms of expanding access to loans for entrepreneurs. Providing business loans through this electronic system creates a number of benefits for entrepreneurs. The introduction of the Electronic Loan Platform also provides flexibility and transparency in obtaining loans, and a level playing field for entrepreneurs, by expanding access to credit for entrepreneurs, and saving time and money.
Azerbaijan Investment Company OJSC has a major part in reinforcing the investment support for entrepreneurs. The Company has set main goals such as promoting the development of the non-oil sector in our country, investing in profitable projects, and participating in competitive and profitable, especially export-oriented or import-substituting projects.
99.6% of the country's enterprises fall on the share of small and medium-sized enterprises, and their share in added value, exports, employment and investment is growing. In a view to enhance the role and competitiveness of SMBs in the country's economy, bring the management system in this area in line with modern requirements and formulate institutional support mechanisms, the Small and Medium Business Development Agency was established under the Ministry of Economy. The Agency implements various incentive and support mechanisms to increase the role and competitiveness of SMBs in the economy, improve their knowledge and skills, and widen their access to financial resources and markets. Examples include SMB Friend offices, SMB Development Centres, funding for educational, scientific and research projects for SMBs, and the issuance of a Startup Certificate.
A significant reduction in licensing activities in the field of entrepreneurship, the issuance of investment promotion documents to stimulate investment, full electronization of the procedure for requesting quotations in the field of procurement and its implementation through a single Internet portal - etender.gov.az, radical tax reforms and other measures also serve to strengthen private sector activity, increase transparency and accountability, thereby improving digitalization and developing a competitive environment.
The Azerbaijan Export and Investment Promotion Fund (AZPROMO) was established to achieve priority goals, such as increasing the export potential of Azerbaijan and attracting foreign investment. The Fund actively supports entrepreneurs in reinforcing the export potential of the country's entrepreneurs, enlarging investment opportunities, searching for potential partners and implementing joint cooperation projects.
The Export.az e-commerce portal can be specified as another example of systematic and consistent state support for entrepreneurial development. The portal is a trusted business intermediary for businesses, with the mission of creating easy access to the world's businesses.
To date, many laws have been adopted to improve the legal framework in the field of entrepreneurship and protect the rights of entrepreneurs. Among such laws that contribute to the development of entrepreneurship is the Law of the Republic of Azerbaijan “On Regulation of inspections in the area of entrepreneurship and protection of interests of entrepreneurs”, adopted on July 2, 2013. The law stipulates the goals and principles of inspections in the field of entrepreneurship, the rules for conduct and organization, the rights and obligations of inspection bodies and officials, and the protection of the rights and interests of entrepreneurs.
To further reinforce the protection of the rights of entrepreneurs, Boards of Appeal function under the President of the Republic of Azerbaijan and in central and local executive authorities.
April 25 each year is celebrated as "Entrepreneur’s Day" in the Republic of Azerbaijan to stimulate the spirit of supporting entrepreneurship in society, given the growing role of entrepreneurs in the economy and employment of the country, by the relevant Order of the President.
