The Decision of the Ministry of Economy of the Republic of Azerbaijan (hereinafter: the Decision) on the “Approval of the Procedure for the Organization and Management of the Joint Industrial Parks” came into force on 14 February 2018. The Decision was adopted to ensure the implementation of the President’s Decree "On Approval of the Model Regulations on Industrial Parks", dated April 24, 2013. In accordance with that Decree, the competent authority on this issue is the Ministry of Economy of the Republic of Azerbaijan.
According to the "Model Regulations on Industrial Parks", the Industrial Park means an area that has the necessary infrastructure and governance structures for entrepreneurial activity, used for the purposes of manufacturing competitive products and providing services through the application of modern technologies, and which hereby promotes the effective functioning and development of entrepreneurs.
The joint industrial park is established with the participation of state, municipality and private entities. A joint industrial park can be established with the participation of all three types of owners, or state and private owners, as well as municipalities and private owners. According to the Decision, when a joint industrial park is established, the decision on the state’s participation in the park is adopted by the President of the Republic of Azerbaijan, in case of municipal property- by municipality, and in case of private property - by the private owner.
A joint collegial body, which is represented on the basis of equal rights of participants, is set up for the organization and management of the joint industrial park. In addition, an operator may be involved to provide more effective management by the managing body, but neither the governing body nor the operator can be a resident in a joint industrial park. The distribution of the proceeds from the activities of a joint industrial park is based on the equity interest proportion as per the shareholder agreement of the organization.
As joint industrial parks provide for various tax-favorable measures, such as tax exemptions or reduced rates, they create business incentives for entrepreneurs. Moreover, joint industrial parks can be considered as a successful example for Public-Private Partnership that is based on co-operation between the state and the private companies and individual entrepreneurs, which is organized and managed by them. If you are interested in getting legal assistance related to this topic, please contact Caspian Legal Center.