Criteria for SME cluster companies approved

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The Ministry of Taxes of the Republic of Azerbaijan approves criteria for SME cluster companies on May 8, 2019.

The criteria identify SME cluster company as commercial legal entity that concludes business deals with at least mutually unrelated 10 micro, small and medium businesses within the SME cluster project and supplies 50% of the cost of raw materials and materials produced by cluster participants being local producers.

SME cluster company includes an enterprise that renders hospitality and accommodation services (hotel, motel, camping, etc.), creates new competitive products not produced in Azerbaijan and creates products with more than 50% of consumption covered by imports.

The minimum amount of investment for the project implemented by a SME cluster company in Baku is set at AZN5 million (excluding suburban areas of Baku), AZN3 million in Baku's suburbs and Absheron district and AZN2.5 million in Sumgait and Ganja respectively. Investment for projects implemented in other cities and regions of Azerbaijan ranges from AZN0.5 million to AZN1.5 million.

SME cluster company is a new term introduced to the Tax Code of Azerbaijan together with some other amendments that entered into force January 1, 2019. According to the Tax Code, members of SME clusters are for seven years exempt from income and corporate taxes from the part of their income directed for capital expenditure. SME cluster companies are aslo exempt from paying income, land, property and equipment import taxes for seven years.

Azerbaijan introduces first ever m-residency

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Azerbaijan becomes the first country in the world to introduce mobile residency (m-residency) as well as the second country after Estonia to provide electronic residency to foreign citizens.

M-residency is a significant innovative tool aimed at improving the investment climate in the country, greatly simplifying business, increasing investment attractiveness and providing easy, fast and reliable services to foreign investors and businesses willing to conduct business in Azerbaijan. M-residency allows registering company online, carrying out tax and customs transactions online, using electronic and mobile banking services, signing contracts online, etc without visiting the country.

All diplomatic missions and consulates of Azerbaijan are empowered to issue m-residency, Asan İmza (easy signature) digital signature electronic certificates to foreign citizens around the globe.

CabMin approves statute of family oriented community services

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On 13 August 2013, Azerbaijan Cabinet of Ministers approved Resolution No. 207 on the statute of family oriented community services following the consideration of the proposal of the Ministry of Education of Azerbaijan Republic pertaining to the Action Plan of the State Programme on De-Institutionalization and Alternative Care for 2006-2015 (SPDIAC), endorsed by President Ilham Aliyev on March 29, 2006.

SPDIAC aims at reintegration of children residing currently in various state institutions (de-institutionalization) with biological or foster families and at creation of alternative care services to support the de-institutionalization process. The major focus of the Program is to reduce the number of children placed in the residential care institutions and to establish a sustainable system of alternative child care and family support mechanisms. The desirable aim is to gradually phase out the institutional care and to move to more family oriented community services.

It should be noted that considerable amount of work has been carried out since the adoption of the State Programme, including establishment of the specialized Department on De-institutionalization and Child Protection under the Ministry of Education, adoption of the Master Plan of Transformation of Child Care Residential Institutions, cost comparison analysis of state child care services vs. alternative ones; and development of different by-laws and regulations to allow alternative community-based services can be set up and run by government and non-state actors.

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