12:51 - 13.07.2026

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July 13, Fineko/abc.az. The introduction of tax incentive mechanisms relating to the field of crowdfunding can make significant contribution to development of this sphere, MP Nigar Arpadarai stated during her speech at the Milli Majlis plenary session.

She added that there is a serious necessity for alternative sources of financing for startups, innovative projects, and new business initiatives in Azerbaijan: “In this context, the Law on Crowdfunding should definitely be supported. The first issue relates to the concept of crowdfunding itself. The law mainly focuses on debt and equity crowdfunding, which are the main regulated forms. However, there are other types of crowdfunding in global practice. For example, there is a form of crowdfunding based on grants. In addition, there are also mixed models. For example, there are projects that combine elements of both grants and debt, or that use both grants and investments. In this context, my question is: what will be the legal status of other forms of crowdfunding that are not covered by the law? Will they be allowed, or will they not exist or be considered illegal? I believe it would be more correct to evaluate this issue within the framework of the law, and in fact, a more flexible law will create ample opportunities for us to develop crowdfunding."

The MP noted that the second issue relates to the use of the platform: "Activities of the platform itself and the operator, as well as the mechanisms of crowdfunding, are defined here. However, there is a question. For example, how should funding organized outside the platform be evaluated? Let's say that a project manager distributes an open announcement to fund their project through WhatsApp, how should this be evaluated? That is, how is this classified in terms of the law? Is this activity considered legal, or is it already considered to be outside the law? In this regard, the law does not provide any provisions."

Arpadarai says that she wanted to emphasize economic incentives as a proposal: "In the project, equity crowdfunding will be primarily implemented through the sale of shares, while debt crowdfunding will be implemented through debt instruments. However, both instruments - both the issuance and sale of shares and bonds - are already regulated under current legislation. In this case, an investor, as well as an entrepreneur seeking funding, may wonder why a crowdfunding platform should be the preferred option. To address this, I would suggest the inclusion of a specific incentive mechanism. In countries where crowdfunding is widely used, this often takes the form of tax incentives. Without such incentives, the platform may not attract sufficient interest."