Young entrepreneurs to receive tax benefits

By Azernews

By Rasana Gasimova

Azerbaijan will introduce a mechanism of tax benefits for young entrepreneurs, Chairman of the Board of Azerbaijan’s Agency for the Development of Small and Medium-sized Enterprises (SMEs) Orkhan Mammadov said at the First Forum of Young Entrepreneurs in Baku, local media reported.

“We need to promote mechanisms of state support among young people. Businessmen should invest in youth entrepreneurship, and in order to increase interest in financing startups, individual work with banks and investors is necessary,” Mammadov noted.

He said that there is a mechanism for issuing soft loans for 50,000 manats ($29,472) through banks to finance innovative projects and startups at the expense of the Azerbaijan Youth Foundation, adding that in order to stimulate the activities of startups by the government, in addition to credit support, tax incentives are expected to be provided.

Mammadov went on saying that state support for domestic market research is 20,000 manats ($11,789), advising young entrepreneurs to take this opportunity.

“Youth Houses have been created in most Azerbaijani cities and regions, and the government calls for the effective use of the capabilities of these centers. We believe that to ensure their effectiveness, it is possible to create business incubators and development centers for young people, and we must jointly evaluate these opportunities,” he added.

Mammadov noted that the SMEs Development Agency has received over 200 applications from young entrepreneurs in 2019. He noted that 60 percent of these applications were related to the provision of legal assistance and advisory services, 30 percent to access to financial resources, and 10 percent to protection of entrepreneurs' rights.

He further noted that 30 percent of the total number of applications was submitted by start-uppers, while 70 percent were submitted by those engaged in existing or developed business.

Touching upon areas of economy that the young entrepreneurs are interested in, Mammadov named the financial and credit sector, agriculture, trade, services and IT.

On the sidelines of the event, Director of the Azerbaijani Youth Foundation Farid Jafarov noted that the mechanism for issuing preferential loans to support small business will be introduced in Azerbaijan in 2020. Jafarov stressed that the maximum loan rate will not exceed seven percent.

“The mechanism will be divided into small, medium and big preferential packages,” the director of the foundation added. “The minimum loan amount will be 1,000 manats ($589,451), while the maximum amount – 50,000 manats ($29,472),” he added.

Jafarov further noted that starting next year a mechanism for supporting youth employment will be launched.

The First Forum of Young Entrepreneurs took place in Baku on December 10, with the support of the Agency for the Development of SMEs. The main purpose of the event was to encourage entrepreneurship and support small and medium-sized businesses established by young people.

As part of the forum, Azerbaijan’s Agency for the Development of Small and Medium-sized Enterprises (SMEs) signed memorandums of understanding and cooperation with Azerbaijan Young Entrepreneurs Network Public Union and Azerbaijan Youth Foundation.

The First Forum of Young Entrepreneurs was jointly organized by the Ministry of Economy, SMEs Development Agency and Azerbaijani Youth Foundation. It was attended by more than 300 participants including representatives of government agencies, youth public organizations and businesses, as well as young people who are interested in this field.