SMEs to gain access to new government support mechanisms

19 September 2019 21:58 (UTC+04:00)

By Rasana Gasimova

Azerbaijan’s Agency for the Development of Small and Medium-sized Enterprises (SMEs) continues to stimulate activities of micro-, small- and medium-sized businesses in the country.

The Agency conducts series of measures and projects to simplify access to financial recourses in order to develop macro, small and medium-sized enterprises and stimulate investment activities, Director of the Agency, Orkhan Mammadov told Trend during the 9th International Caspian Energy Forum Baku 2019.

Mammadov noted that investment initiatives are being analyzed and government support mechanisms are activated at this stage.

“Thus, according to the portfolio of activities, active measures are being taken to inform about tax reductions and exemptions that arise from the ‘Investment Promotion Document’ for SME projects. In addition, negotiations are underway to attract foreign investment in these projects. We already have successful results and some local companies have already taken advantage of these opportunities, “Mammadov said.

He also noted that due to the Agency’s initiative, the Tax Code was amended by providing new benefits and exemptions for SMEs and startups.

“Recently, the criteria for participants and companies of SME clusters were approved. Using these mechanisms, clusters of SME companies that will be created in the relevant areas of activity will not pay taxes for seven years and will be able to enjoy serious privileges. Besides, certificates that will be issued for the Agency’s startups will exempt them from income or profit tax for three years. Work is currently underway in this direction, “emphasized Mammadov.

He noted that recently, another mechanism has been launched to support SMEs.

 “The relevant decree of the President of Azerbaijan approved the ‘Procedure for conducting domestic market research to stimulate the competitive production of micro, small and medium enterprises’. These support mechanisms can be used by micro, small and medium enterprises. Analyses show that for the production of competitive products, it is necessary to conduct high-quality research of the domestic market, but due to the fact that this requires serious financial costs, such projects become unfeasible for SMEs. Thanks to the introduction of such a mechanism, 80 percent of research expenditures of the domestic market held by micro-enterprises and 50 percent of the expenditures of small enterprises will be compensated by the state,” said Orkhan Mammadov.

According to his words, medium-sized enterprises will be able to use this support mechanism by participating in free trainings and seminars, as well as receiving regular information support in certain areas.

"The amount reimbursed by the government connection with conducting research on the domestic market is provided up to 20,000 manat ($11,790). We believe that the support mechanism in the direction of research on the domestic market will stimulate SMEs investment activity and will significantly contribute to the implementation of their business ideas," Mammadov concluded.

The main task of the SMEs Development Agency is ensuring the succession of reforms, improvement of the business regulation system, and application of effective coordination, enhancing the role and competitiveness of SMEs in the country's economy, as well as the compliance of the management system in this area with modern requirements.

The share of SMEs in Azerbaijan’s foreign trade is planned to increase to 40 percent after 2025.

The stand of the Agency won a “Best social project” award at the 2nd Azerbaijan International Exhibition of Gifts and Promo Items (Gift & Promo 2019) held in Baku on September 12-14.


Follow us on Twitter @AzerNewsAz