Baku: Requirements and tax incentives will be introduced for the operation of venture capital funds, APA reports. This development is part of the proposed amendments to the Law on Currency Regulation and the Tax Code, which were deliberated upon at a recent meeting of the Milli Majlis Committee on Economic Policy, Industry and Entrepreneurship.

According to Azeri-Press News Agency, the amendments propose that the repatriation and subsequent transfer from the Republic of Azerbaijan of profits, dividends, and proceeds obtained from investments by venture capital funds and accredited investors in innovative projects, including startups, in foreign countries will not necessitate a customs declaration or bank statement. This is contingent on the initial investment being made in the form of an intangible asset or service, or the income being certified by a competent tax authority from the foreign state.

The proposed regulations further state that transfers for investments made by residents in innovative projects outside Azerbaijan, aimed at acquiring future equity participation through various financial instruments, will have no amount limitation for venture capital funds. Accredited investors, however, will be limited to transferring up to the equivalent of USD 2 million per calendar year.

Investors are required, within five years of the transfer date, to submit to the authorized bank an extract from a foreign register confirming the acquisition of the participation interest within the specified period in the agreement. In cases where the entity attracting the investment is declared bankrupt or liquidated, a document from the competent authority of the foreign state confirming such a circumstance must be submitted.