There is well founded idea and taken brave step on its time beyond the successful business. Each entrepreneurs’ dreams on this way is to realize his initiative, to turn it into a competitive and profitable enterprise. Meanwhile, no matter how this way is hopeful, entrepreneurs face a number of difficulties on the first stage. It includes lack of financial resources, purchase of expensive equipment, tax and customs obligations, technical and legal requirements, etc.
At this time the government’s support has a crucial role. As the newly launched business have importance not only for entrepreneur, but also for the whole economy and society; Socio-economic revival is taking place in the regions, unemployment is decreasing, local production is strengthening, and export potential is increasing. The state, by being with the entrepreneur in this process, reduces his risks and paves the way for development. One of the important tools of this support is the investment promotion document.
This document submits real and measurable compensations to the entrepreneur. When the entrepreneur is eager to implement the investment project within the framework of regulations determined by the government, he is exempted from tax and customs obligations in return. As a result, the initial strain is lessened and the business can turn a profit faster. Unfortunately, the incentive mechanism is unable to function to its full potential since some entrepreneurs are either unaware of this possibility or do not know how to take use of it.
"Report" offers responses to the primary queries that entrepreneurs have about this paper.
502 entrepreneurs received 606 investment promotion documents.
Let us start by pointing out that, as of the end of May of this year, 502 entrepreneurial companies in Azerbaijan had received 606 investment promotion documents. More than 7.3 billion manats will be invested and more than 43.7 thousand employment will be created as a result of the implementation of these projects, according to the Small and Medium Business Development Agency (KOBIA).
13.2% of the promoted projects fall on Baku city and surrounding settlements, and 86.8% on the regions. 62.5% of the submitted investment promotion documents cover projects to be implemented in the industrial, 34% in agriculture, 1.8% in logistics, and 1.7% in tourism sectors.
Over 550 projects have already begun operations since receiving this document, and the remaining projects are currently in the implementation stage. These businesses export their goods to a variety of international markets, including as the CIS, Europe, and the Arab world.
What is investment promotion document?
Investment promotion document – is an official document which permits to legal entities and individuals to use the opportunity of determined tax and customs compensations. This mechanism has been implementing since 2016.
The government stimulates the entrepreneur via applying this document: entrepreneur launched new company and invests, in return of that he is exempted from a number of taxes and customs duties.
What benefits does this document cover?
Naturally, entrepreneurs have a question like that what is the benefit of this document to them? What benefits will the investment promotion document give them?
The key point here the entrepreneurs should know that investment promotion document is granted to them for 7 years. They are exempted 50% of profit or income tax for exactly 7 years. In addition to this, they are free of land and property tax.
On the basis of the relevant supporting document, machinery, technological equipment and devices imported from abroad within the framework of the project are also fully exempted from customs duties and VAT. These benefits apply only to equipment imported within the framework of the project. Raw materials and spare parts are not included in these benefits.
Which conditions are required for obtaining the document?
The requirements for acquiring this document are the primary concern. The areas of economic activity where the investment is made, the minimum amount associated with the project volume, the territories and zones where the project will be implemented, and the requirements for strategic investment projects have all been approved in order to issue an investment promotion document. The entrepreneur must first register as a taxpayer with the tax authority in order to receive this document.
He must then submit an application, a business plan, documents verifying the down payment (10% of the minimum amount) (such as a contract or SWIFT statement), land documents pertaining to the project (such as ownership, use, or lease rights), a charter, an extract from the state register, and copies of an identity card (for an individual entrepreneur) in compliance with the established criteria.
Where should the entrepreneur apply?
An entrepreneur must apply to the Ministry of Economy or the service window that operates in the ministry's SME houses in the cities of Baku, Khachmaz, and Yevlakh in order to receive an investment promotion document. The submitted proposal and any supporting documentation are reviewed within five business days in compliance with the law as it stands.
If the investment project satisfies the requirements, the documents are complete, the entrepreneur has no past-due taxes or other state payments, and the state fee has been paid, the entrepreneur will receive the investment promotion document within two business days. This document has a 70 manats state fee. For each of his distinct ideas, the entrepreneur may acquire a different investment promotion document.
According to the State Tax Service, as of May 1 of this year, there were 1,621,818 taxpayers registered in the republic. 86.9% of these taxpayers were individuals, 13.1% were legal entities and other organizations. Compared to the same period last year, the total number of taxpayers increased by 4.8%, including an increase of 4.3% in the number of individuals and 7.7% in the number of legal entities. 91.7% of commercial legal entities registered in the state were established in the form of limited liability companies, 1.1% were joint-stock companies, 1.1% were cooperatives, etc. The number of registered commercial entities increased by 8.4% compared to the same period last year and amounted to 195,263 units.
Considering that the number of entrepreneurs in the country continues to grow, each of them has the right to use such an advantage as an investment promotion document, the benefits it provides. Thus, the investment promotion document is a real example of cooperation between the state and the entrepreneur. Through this document, starting a business becomes more affordable and safer in terms of risk for the entrepreneur. The state, in turn, stimulates the entrepreneur and promotes regional development, the expansion of the non-oil sector and sustainable economic growth. By using this tool provided by the state, they can start production faster, gain access to foreign markets and build new value chains.
Remember that every new business is a fresh start. The investment promotion document is an important support mechanism that makes this initiative a reality.
Powered by Froala Editor
