Azerbaijan makes headway with loan projects boosting reconstruction in liberated areas

Azerbaijan is actively engaged in the restoration of the Garabagh region and Eastern Zangazur, prioritizing the reconstruction of infrastructure, housing, and public services. This initiative is designed to revitalize the local economy and facilitate the return of displaced communities. The government is committed to investing in sustainable development projects, promoting environmental protection, and enhancing connectivity within the region. As reconstruction efforts advance, Azerbaijan is dedicated to fostering peace and stability, ensuring a promising future for the residents of Garabagh region and Eastern Zangazur.

Additionally, loans for companies involved in the reconstruction of Garabagh are being offered on preferential terms. To enhance these measures, the government has introduced several concessions for local entrepreneurs. As of July 1 of this year, the total amount of loans disbursed in the Garabagh economic region reached 456 million 441 thousand manats, an increase from 404 million 983 thousand manats at the beginning of the year. Consequently, the credit portfolio of the economic region has grown by 51 million 459 thousand manats, representing a 13 percent increase since the start of the year. The majority of these loans, amounting to 455 million 627 thousand manats, were issued in manats, with an average interest rate of 18.87 percent. This framework creates favorable conditions for the private sector to engage more actively in the recovery and reconstruction initiatives.

It should be emphasized that the minimum amount of the concessional loan provided by the Entrepreneurship Development Fund is 5 million manats, with a term of 7 years at an interest rate of 15 percent, of which 10 percent is subsidized by the state.

Recently, a meeting was held with taxpayers engaged in entrepreneurial activities in Agdam, Fuzuli, and Khojavand, organized by the Fuzuli City Office of the Garabagh Territorial Tax Administration under the Ministry of Economy.

About 70 micro and small business entities operating in various sectors participated in the meeting. Information was provided on the services available to taxpayers, tax concessions in the liberated territories, including loans with state guarantees and subsidized loan interest.

Speaking at the event, Emin Shirinov, a member of the Board of Directors of the Entrepreneurship Development Fund (EDF), stated that up to 24 million manats in concessional loans have been provided for projects implemented in the liberated territories. He emphasized that the Fund is particularly interested in making this mechanism accessible to entrepreneurs and noted that the EDF is ready to support them in overcoming any challenges they face.

Alakbar Mammadov, head of the Garabagh Territorial General Administration of Taxes, also spoke at the event. In his speech, he addressed several points related to the "Great Return" program for the territories freed from occupation and provided extensive information about the steps taken by the state to develop entrepreneurship in these areas. He emphasized that support mechanisms aimed at fostering entrepreneurship are crucial for settling people in these regions, involving the labor force, and enhancing infrastructure.

It should be noted that the great return to the liberated territories has been defined as one of Azerbaijan's five National Priorities until 2030. The "Socio-Economic Development Strategy of the Republic of Azerbaijan for 2022-2026" is an important document that serves to achieve the goals of this new development phase.

During the meeting, it was mentioned that monitoring of taxpayers operating in the liberated territories is a priority. The main goal is to assess the registration of business entities with the tax authority, as registered businesses will be able to benefit from tax incentives by obtaining resident status in these areas.

In line with the priority of revitalizing Garabagh, and to realize the region's industrial potential, reintegrate it into the national economy, and ensure employment for the population, the President of the Republic of Azerbaijan has established the Aghdam Industrial Park in Aghdam city and the "Araz Valley Economic Zone" Industrial Park in Jabrayil district.

These industrial parks, along with other existing ones in the country, create a favorable investment environment for entrepreneurs. Residents of the industrial parks benefit from ready-made infrastructure funded by the state. Additionally, they are exempt from property tax, land tax, income tax, and profit tax for 10 years from the date of registration. They also enjoy exemptions from VAT during the import of machinery and technological equipment for production purposes, as well as from customs duties for the same duration.

Moreover, changes made to the Tax Code as of January 1 of this year have introduced additional benefits for entrepreneurs operating in the liberated territories. These benefits include subsidizing social insurance fees, granting five days of additional vacation to professionals living and working in these areas, providing supplements to monthly salaries, and a one-time allowance of 600 manats. The process for obtaining work permits has been simplified, and the labor migration quota will not apply for five days for foreign specialists. Additionally, the import of certain raw materials for production by entrepreneurs in the liberated territories is exempt from VAT for 10 years.

In summary, Azerbaijan is making remarkable strides in the reconstruction of the Garabagh region and Eastern Zangezur, emphasizing infrastructure development, economic revitalization, and the safe return of displaced communities. Central to this initiative is the provision of preferential loans, with a total of 456 million manats disbursed to support local entrepreneurs, alongside minimum concessional loans of 5 million manats from the Entrepreneurship Development Fund. These financial measures, coupled with various government concessions, create an enabling environment for private sector participation.

Furthermore, the establishment of industrial parks, such as the Aghdam Industrial Park and the Araz Valley Economic Zone, alongside tax exemptions and additional benefits for businesses, reinforces Azerbaijan's commitment to reintegrating these territories into the national economy. As the country progresses in this ambitious effort, it remains dedicated to fostering peace, stability, and a prosperous future for all residents of the region.