CELIS Country Note on Azerbaijan, 2023

by Safar Safarli

Date of Publication: 14 August 2023

This Country Note includes an overview of the current FDI regime in the Republic of Azerbaijan by highlighting the existing relevant political background with energy transition as its center goal, respective regulatory framework, and expected reforms. Considering the energy transition, the Note demonstrates recent foreign investments in the renewable energy sector and the state policy to establish a more favourable FDI regime through removing bureaucratic barriers, promoting transparency starting from the pre-investment period, and granting more incentives. In that regard, “The Law on Investment Activities” adopted on June 22, 2022, is deemed as a “new beginning” and the Note analyses the new Law in comparison with the regulatory regime provided under the relevant previous laws. In order to shed light on the expected developments, the Note also gives special regard to ”The Socio-economic development strategy for 2022-2026 of the Republic of Azerbaijan”, approved with the Presidential Order on July 22, 2002, which provides among others the clear checkpoints for the attraction of FDI and requires a customized regulatory framework for that purpose. The Note also touches on the “The Law on Public-Private Partnership” adopted on December 9, 2022, and covers the general regime defined under that Law with respect to FDI.