BAKU, Azerbaijan, August 8. In recent years, Azerbaijani Government has made significant progress in improving the investment climate through wide-ranging reforms, the World Bank (WB) said, Trend reports via the Bank’s Systematic Country Diagnostic (SCD).
“In recent years, the government has ushered in legislative and institutional measures to restructure and modernize public administration, reform tax and customs practices, and promote labor and social protection. Particularly, the simplification of tax procedures, a lower tax burden, a reduction in tax rates on small and medium enterprises (SMEs, from 4 percent to 2 percent), and the introduction of tax incentives for the non-oil private sector have stimulated foreign business interest,” the WB said.
According to the bank, though some Azerbaijani companies have showed the capability of competing in the global market, challenges regarding foreign direct investments (FDI) still remain.
“Attracting more FDI in the non-hydrocarbon sectors could foster the emergence of a dynamic private sector. The share of FDI in the non-hydrocarbon sectors is limited, amounting to around 10 percent of total FDI in 2020. The government has drafted an investment law and an investment promotion strategy, both of which are awaiting approval and adoption,” the report said.
As the WB noted, there is room for further improvement in customs procedures, export certificates and resolution of commercial and investment disputes in Azerbaijan.
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