Baku, Azerbaijan, Feb. 5
By Huseyn Valiyev - Trend:
Solving the issue of legal regulation of the process of creating venture funds in Azerbaijan should be accelerated, head of the Barama Innovation and Entrepreneurship Center Imran Bagirov told Trend.
He said that despite the amendments to Azerbaijan’s tax legislation regarding startups, there is no execution mechanism yet, as well as there are no criteria for defining startups.
“In accordance with the information we have, the criteria will be defined this year,” said Bagirov. “It is important that this process be accelerated.”
Amendments to Azerbaijan’s tax legislation concern startups operating in the micro and small business segment and possessing a special certificate that confirms their innovative activities, he noted.
Startups registered as legal entities will be exempt from profit tax (the profit tax rate is currently 20 percent), and individual entrepreneurs will be exempt from income tax (14 percent for monthly income of up to 2,500 manats, while for monthly income of over 2,500 manats the income tax amounts to 350 manats plus 25 percent from a part of income that exceeds 2,500 manats), he added.
Venture financing is also one of the topical issues regarding the formation of the startup ecosystem in Azerbaijan, Bagirov said.
“We believe that the more venture funds in the country are created, the better,” he noted. “This is important from the point of view that there must be a choice. In the end, natural selection will take place and the best will remain. By itself, venture financing is difficult process. Everything has to start with business angels and then move to venture financing. As is known, venture funds finance startups not at the creation stage, but at the development stage. As a whole, the startup ecosystem in Azerbaijan is still at the initial stage of formation. Therefore, everything will develop gradually.”
The head of the center also spoke about plans to expand the number of Barama offices. He said that the next center will be opened in March this year in Azerbaijan’s Lankaran district.
“This will be the fifth Barama office,” he added. “In addition to the main Barama office, innovation and entrepreneurship centers operate at the Baku State University, Azerbaijan Technological University in Ganja and at the Azerbaijan British College educational complex. Another center may be opened in Sumgait city, however, a decision on this matter hasn’t yet been made. Probably, the issue will become topical next year.”
The value of investments in the expansion of the centers’ activity has reached approximately 3 million manats since the moment of their foundation, he said.
(1.7 AZN = 1 USD on Feb. 5)
---
Follow the author on Twitter: @h_veliyev
