Can Azerbaijan Trust Israel on National Security Matters?

The Government of Azerbaijan is offering Israeli high-tech companies the opportunity to relocate in exchange for generous tax incentives. This was reported by the Israeli publication Globes, citing its sources within companies that are considering the move.

“In particular, Azerbaijan is offering complete exemption from corporate tax, property tax, land tax, and dividend tax for a period of 10 years. These are just some of the incentives that Azerbaijan has begun offering to selected Israeli startups. This step is related to the launch of a technology park built in Baku, but from the perspective of the Azerbaijani government, companies can be relocated to any part of the country,” the publication writes.

As Globes learned, a number of Israeli high-tech companies are already in negotiations to make the move.

“In addition to the aforementioned tax incentives, company employees will be able to receive a zero income tax rate on monthly salaries up to 4,700 USD. To qualify for the incentives, the company must provide data on its activities for the past year or confirm an annual turnover of 200,000 manat. The program includes support for immigration to the country, which encompasses assistance in obtaining residency permits and resolving everyday issues.”

“Azerbaijan strives to become the technological 'father' of the Eurasian region, so relocating there can benefit companies as a gateway to Turkic countries. Baku’s relations with Ankara are based on the idea of 'one nation, two countries.' Therefore, companies aiming to operate in Turkey will be able to take advantage of the situation,” the publication adds.

What Prospects Does This Step Hold for Azerbaijan?

In the program “Complex Question,” security expert Sulkheddin Akbar addresses this issue.

According to him, if Azerbaijan decides to entrust the high-tech sector to a foreign state, in this case, Israel, and even offers tax preferences, it means that Azerbaijan is fully trusting Israel. This is an unexpected decision because such relations can only exist with strategic allies. However, Azerbaijan does not have a strategic alliance agreement with Israel.

“In my opinion, this is an extremely risky endeavor. Today, we have excellent relations with Israel. But will they always remain so? Moreover, considering that Azerbaijan’s experience in this field is limited, that it has a very underdeveloped infrastructure, and is significantly lagging behind Israel in scientific, technical, and technological areas, this means that Israel will unquestionably dominate our cyberspace,” Akbar says.

In his view, Azerbaijan should not undertake such steps without consulting its only strategic ally, whom it trusts.

o1-mini