Legislative amendments aimed at accelerating the development of the digital economy, supporting technological entrepreneurship, attracting highly qualified specialists in digital technologies to the country and expanding opportunities for innovative products to participate in public procurement have been approved by decrees of the President of the Republic of Azerbaijan dated 22 October 2026. The Ministry of Digital Development and Transport reported this.
The changes affect residency in tech parks, tax and social benefits, startup financing, the legal status of digital nomads and mechanisms for procuring innovative products.
Amendments to the "Model Regulation on the Technology Park" create legal conditions for freelancers and digital nomads to work as residents of tech parks. Freelancers are individuals who independently provide paid services or perform work under a civil-law contract without hiring employees. Digital nomads are foreign citizens or stateless persons who work remotely in foreign countries using information and communication technologies and receive income exclusively from foreign sources.
Areas of activity that grant the right to residency, along with software development and system integration, cover artificial intelligence, cybersecurity, robotics, cloud technologies, gaming technologies and other high-tech fields.
Opportunities are also being created for individuals with successful business ideas but limited experience in the relevant fields to operate as residents of tech parks. In addition, the amendments provide for faster expert review, clearer regulation of issues related to tech park infrastructure and property relations, and electronic registration procedures through the "mygov biznes" system.
These changes will enter into force on 1 January 2027.
Furthermore, from 1 January 2027, for tech park residents that obtain a residency certificate and meet the established criteria, the duration of tax benefits on income and profits from relevant activities, dividends paid within these activities, and on used property and land plots is increased to 20 years. The benefits will also extend to residents operating outside the tech park. A zero personal income tax rate will apply for 20 years to the employment income of employees engaged by residents in the relevant field of activity.
For new residents, the period for choosing the procedure for calculating social insurance contributions for employees involved in the relevant activity is also extended from 10 to 20 years. Residents classified as large business entities will be able to use tax benefits if they meet conditions regarding export performance and the receipt of export revenues into accounts in Azerbaijan.
To stimulate research and development, certain operating expenses aimed at developing innovative products may be deducted from taxable income using a coefficient of 2.5. A coefficient of 2 will apply to depreciation rates for equipment used for these works and accounted for separately. The corresponding tax exemptions will apply to exports of integrated equipment that includes software, innovative products or know-how created by the resident.
To encourage investment in startups, a portion of investments made by accredited investors may be deducted from taxable income, subject to certain conditions.