Azerbaijan is introducing new investment measures as it seeks to attract technology companies and venture capital while reducing its long dependence on oil and gas. At the height of the country’s oil boom, hydrocarbons represented about three-quarters of economic output and 90 per cent of exports, according to the International Monetary Fund. Technology accounted for 2.1 per cent of gross domestic product last year, up from 1.9 per cent in 2024.

Legislation approved in July created a local legal framework for investment instruments. The rules are intended to let startups and investors structure deals in Azerbaijan instead of establishing entities in foreign jurisdictions, which can raise costs and complicate later funding rounds. Deputy Digital Development Minister Rashad Hasanov said foreign venture funds, corporations and institutional investors are expected to provide a significant share of future capital.

Baku also plans to establish a fund that combines Azerbaijani and international investment, although its final size has not been decided. Hasanov said the amount would depend on the quality of the startup pipeline and the partners involved, adding that officials had studied models used in Singapore and Estonia. Azerbaijan’s venture market remains small: 22 startups raised $2.62 million in 2025, while Caucasus Ventures, INMerge Ventures and Tumar Ventures have disclosed combined capital of about $11 million.

Tural Selimli of local company Sera AI welcomed the reforms but said the country still needs to build awareness and trust among foreign venture and angel investors. A separate legal basis has also been established for equity- and debt-based crowdfunding, and the central bank has six months to approve the supporting regulations. Central Bank Governor Taleh Kazimov said applications from new market participants are now expected.