Azerbaijan pivots from oil to tech-driven growth

The government’s new legal framework, passed in July, aims to simplify deal structures for startups, allowing them to operate locally rather than incorporating in foreign jurisdictions. Deputy Digital Development Minister Rashad Hasanov noted that officials are modeling the transition on the experiences of Singapore and Estonia, with plans to launch a blended fund for local and international capital.

Despite these ambitions, the domestic venture market remains in its infancy. Only 22 startups secured funding last year, totaling $2.62 million. Currently, just three local funds—Caucasus Ventures, INMerge Ventures, and Tumar Ventures—manage approximately $11 million in disclosed capital. While local entrepreneurs like Sera AI’s Tural Selimli welcome the regulatory shift, they emphasize that attracting global angel investors will require a concerted effort to build market trust.

Central Bank Governor Taleh Kazimov remains optimistic, pointing to the new regulations for equity and debt-based crowdfunding as a catalyst for market entry. The bank is now preparing to process applications as it works to finalize specific oversight rules over the next six months.