At the session on finance, investments and SMBs held within IX Caspian Energy Forum 2019 in Baku, chairman of the Agency for Development of Small and Medium Business of the Republic of Azerbaijan (SMBDA) Orkhan Mammadov spoke about SMBDA activities and projects aimed at improving access to financial sources for development of small and medium enterprises as well as investment promotion. He noted that currently, SMBs investment initiatives are comprehensively analyzed and government support arrangements for their implementation are promoted. For instance, according to the SMBs profile and projects, active awareness measures are taken to inform on exemptions and privileges provided by the Investment Promotion Document. Besides, there are ongoing negotiations with different partners to attract investments to those projects. All this has already yielded positive outcomes, and several local companies have used provided opportunities.
Orkhan Mammadov also stressed that implementation of investment promotion mechanisms will be continuous, and informed the audience about these mechanisms as well as pointed out that SMBs will be able to use them shortly. He stated that recent amendments to the Tax Code initiated by the Agency provide new privileges and exemptions for SMBs and startups; among other things, SMB cluster company definition has been introduced to the code, and related incentives have been defined. Recently, criteria for SMB cluster company and SMB cluster member have been approved. Implementation of these arrangements will exempt various SMB cluster companies from taxes for 7-year period and provide them with privileges. Furthermore, certificates for startups issued by SMBDA will exempt them either from income tax or profit tax for a three-year period. Currently, related activities are underway.
Another SMBs support mechanism has recently been introduced. The Decree of the President of the Republic of Azerbaijan dated 29 May 2018 approved Regulations for carrying out domestic market research to improve SMBs competitive production.
This support mechanism will be used to create micro, small, and medium enterprises. The analysis shows that competitive production requires quality domestic market research. However, SMBs cannot afford them due to the high cost, which sometimes makes impossible the implementation of promising projects. However, by use of this mechanism, the government will cover 80% of the cost of individual domestic market research upon microbusinesses requests and 50% - upon small businesses requests while medium businesses will benefit from free training, seminars and continued information support in relevant areas. Annual support for domestic market research will account for up to 20000 AZN. We believe that the support mechanism for domestic market research will encourage SMBs investment activities and make a considerable contribution to the implementation of their business initiatives.
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