Germany invests $460M in Azerbaijan's economy

By Azernews

By Sara Israfilbayova

Germany's direct investments in Azerbaijan amounted to $460 million and were made in the non-oil sector of the economy.

Azerbaijani Deputy Economy Minister Sahil Babayev made the remarks at the Azerbaijan-Germany business forum in Baku on October 11.

Babayev said that Azerbaijan's direct investments in Germany amounted to $120 million.

He went on to say that as part of the mechanism to encourage investment, 1.7 billion manats ($1 billion) were invested in the regions of Azerbaijan.

Azerbaijani businessmen became eligible to get the investment incentives documents following the approval of amendments proposed to the Tax Code of the country.

Under the investment incentives document, half of the revenue of an individual entrepreneur, profits of legal entity are exempted from income tax for seven years. Import of equipment for the implementation of the projects is also exempt of VAT and customs duties.

Head of the State Customs Committee Aydin Aliyev, addressing the event stressed that the cost of customs declaration of goods in Azerbaijan is one of the lowest in the world.

“If to compare with the Eurasian Economic Community (EurAsEC), from Kazakhstan to Belarus, the cost of accepting documents for customs declaration $85, while in Azerbaijan the cost of electronic declaration is 30 manats ($17.6),” said Aliyev, adding that he is glad that Azerbaijan has completely switched to electronic declaration.

Azerbaijan has switched to the electronic declaration of goods and transport from May 4, 2016.

The applicant is directly responsible for the correctness of the declarations, in accordance with the customs legislation. After the approval of e-declaration by customs authorities, it enters into force and any change in data in the declaration is invalid.

The customs authorities will examine any error in the declaration seriously and any customs offense will be submitted to a special investigation.

Further he emphasized that in January-September of 2017, exports of fruit and vegetable products of Azerbaijani origin increased by 63 percent in terms of volume, as compared to the same period of last year.

Aliyev noted that in this period, exports of plastics and products from the country increased, while export of alcoholic beverages increased by 25 percent in terms of price.

Azerbaijan's foreign trade decreased by 9.24 percent in January-August, 2017, as compared to the same period in 2016, to $12.52 billion. The positive balance of trade turnover for this period was $1.92 billion, which is 7.7 times more than in the same period last year.

Murat Karakash, the managing partner of KPMG Azerbaijan, in turn, mentioned that the company will provide recommendations on the operation of the Credit Guarantee Fund by the end of the week.

"We have prepared the latest recommendations and proposals on the activities of the Credit Guarantee Fund and will provide them to the Financial Stability Board by the end of the week," Karakash added.

President Ilham Aliyev signed on September 15 a decree on establishment of the Credit Guarantee Fund to provide state support to entrepreneurs for broader access to financial resources.

The Fund will provide a guarantee for entrepreneurs’ manat loans taken out in authorized banks.

The Fund will also provide subsidies on a part of the interest rate on loans in cases and the order determined by the head of state.