On May 22, 2019, the Decree of the Board of the Ministry of Taxes of Azerbaijan Republic on the approval of the criterion for the "SMB Cluster Company" came into force. According to the decree, taxpayers should meet the following criteria to act as "SMB cluster company":

• To be registered as a commercial legal entity in accordance with the legislation of the Republic of Azerbaijan (Except for the entities that controlling interest of the shares (stocks) belongs to the state);
• The implementation of significant decisions in coordination with the Small and Medium Business Development Agency of the Republic of Azerbaijan (hereinafter referred to as the Agency) should be defined in the charter;
• "SMB Cluster Company" has to close dealings with at least 10 micro, small and medium-sized businesses, and 50 percent of the value of the raw material and material of the product prepared on the cluster must be supplied from local industries within the framework of the SMB cluster project to be implemented;

It was defined in the Decree that the activity of the “SMB Cluster Company" should be based on one of these directions: producing new competitive products that have not been produced in the Republic of Azerbaijan, producing a product that more than 50 percent of the consumption is paid on import, hosting and accommodation services (hotel, motel, camping, etc.).

At the same time, a number of requirements for the SMB Cluster Company have been defined in the Decree. These requirements are:

• The head or any founder of the “SMB Cluster Company” should not have been subjected to criminal liability for tax evasion;
• Cashless transactions should be preferred;
• Transactions should be documented as prescribed by law (electronic invoice, electronic tax invoice, cargo customs declaration, significant accounting records);
•  The annual turnover of the "SMB Cluster Company" within the framework of the project to be defined not less than 20% of the planned investment indicator identified by a financial and economic justification issued by the Agency;
• Completing the final product (service) from the parts produced by the participant of the “KOB Cluster Company”, and presenting goods obtained from the participant with subjecting to processing (with added value).

It is approved with the certificate of the Agency in accordance with the Ministry of Taxes if "SMB cluster company" meets the above-mentioned criteria.