Azerbaijani Law on investments amended

On 24 February 2026, the President of the Republic of Azerbaijan, Ilham Aliyev, signed a law introducing amendments to Article 13 of the Law “On Investment Activity.” The amendments adopted by the National Assembly of Azerbaijan revise the regulation of state control over investments of strategic importance.

According to the amendments, investments of strategic importance may be acquired without the consent of the investor in exceptional circumstances where they harm the interests of the Azerbaijani state and people or contradict national interests. At the same time, a newly added provision stipulates that such cases shall not be regarded as discrimination. In other words, the acquisition of strategic investments by the state for the purpose of protecting national interests will not be considered unequal treatment from a legal perspective.

One of the significant amendments concerns the compensation mechanism. Previously, compensation payable to investors was determined in accordance with the Law “On the Acquisition of Lands for State Needs.” Under the new wording, compensation will be calculated in accordance with the procedure stipulated in the investment agreement; where such a procedure is not provided, it will be determined on the basis of fair market value.

During the discussion of the draft law, members of parliament did not express fully unanimous views. Some deputies voiced concerns regarding the potential impact of the amendments on the investment environment, stating that the inclusion in the law of broad concepts such as “national interests” and “strategic importance” could create legal uncertainty and increase the risks of state intervention for investors.

Responding to these concerns, the Chair of the Economic Policy, Industry and Entrepreneurship Committee, Azer Amiraslanov, noted that similar provisions had already existed in legislation adopted in 1992 and had not hindered the attraction of foreign investment into the country for many years. According to him, expropriation carried out within the framework of legislation and subject to fair compensation is not regarded in international practice as a violation of investor rights.

As a result, the proposed amendments are not intended to restrict the rights of investors. On the contrary, they clarify the legal mechanisms available to the state for safeguarding national and economic security interests and, alongside the protection of property rights, preserve the guarantee of fair compensation in cases provided for by law.