/By AzerNews/

By Nigar Orujova

The government of Azerbaijan has recently set a goal to attract more investors to its non-oil sector and develop the local production.

To make the country more attractive for foreign direct investment at a time of the global crisis, the state has already announced economic reforms aiming to create favorable conditions for investments.

Today, promotion of foreign investments is one of the main areas, Economy Minister Shahin Mustafayev said, attending a conference on development of the promising areas of agriculture in Baku on January 29.

He said given the reduction in public investment, attracting more foreign investment into the country is needed to increase the economic activity. To this end, entrepreneurs working in Azerbaijan will be issued a certain document of the investment incentives, which is presupposed in amendments made in the Tax Code.

Under this document, half of the revenue of an individual entrepreneur, profits of legal entity will be exempted from income tax for seven years. First, the benefits will cover imports of the manufacturing equipment and facilities, brought into the country by legal entities and individual entrepreneurs. These goods will be exempted from import duty and VAT for seven years.

Businessmen will also be exempted from property tax and land tax for a period of seven years from the date of receipt of the document.

In the first years of independence, Azerbaijan saw foreign investments mainly in the oil sector of the economy, but now the volume of foreign investments in the non-oil sector is also growing. Investors from Russia and Turkey are more active in the non-oil sector.

Azerbaijan offers a number of economic advantages, including geographic location and availability of raw materials. Combined with the liberal economic regime and competitive economy, all these create opportunities to further increase the flow of foreign investments.

About 16 billion manats ($9.8 billion) were invested in the development of the economic and social spheres in Azerbaijan from all financial sources in 2015, which is 11.1 percent less than in 2014. Domestic investment accounted for 56 percent of the total investments.

Furthermore, the country itself hugely invested in the development of marine, railway, automotive, utilities, and social infrastructures. Some bureaucratic hurdles were abolished. The country is now eye-catching for transportation, which means great revenue for the investors.

The favorable geographic location promises expansion of transport routes, which will further increase the country’s attractiveness to investors in terms of easy delivery of products made in Azerbaijan to other markets.

Today, along with the regional countries and CIS states, Azerbaijan can also import its production to Europe, as the EU is expecting Azerbaijani goods in its markets, especially agricultural products. Moreover, the EU supports development of this sector in the country.

Currently, the government plans to strengthen cooperation with the private sector in the agricultural sphere. For this purpose, the National Confederation of Entrepreneurs of Azerbaijan and the Agriculture Ministry has signed an agreement on cooperation.

The state’s support to the agrarian sector in Azerbaijan is expressing itself in large benefits to farmers. The volume of agricultural products increased by 6.6 percent over the year amounting to 5.64 billion manats ($3.5 billion) in 2015.