“Considering those who are in an enemy position against Israel, the outlook does not seem at all encouraging for Azerbaijan”

The Azerbaijani government is offering Israeli companies operating in the high-tech sector the opportunity to relocate to Azerbaijan in exchange for tax incentives.

According to information from "Turan," the Israeli publication "Globes" has reported based on sources from companies considering relocating to Azerbaijan.

“Specifically, Azerbaijan is offering to fully exempt these companies from corporate tax, property tax, land tax, and dividend tax for a period of 10 years. These are not all the incentives Azerbaijan has begun to offer to selected Israeli startups. This move is related to the establishment of a technology park in Baku, but according to the Azerbaijani government's perspective, companies can be located in any region of the country,” the publication wrote.

According to "Globes," a number of Israeli companies operating in the high-tech sector are already in talks about relocating to the country:

“In addition to the aforementioned tax incentives, a zero income tax rate will be applied to employees’ monthly salaries of up to $4,700 USD. To obtain the incentives, companies must provide information about their activities over the past year or confirm an annual turnover of 200,000 manats. Immigration support is provided within the program framework, including assistance in formalizing residence permits and resolving household issues.”

Azerbaijan is eager to become the "father of technology" in the Eurasian region, so relocating to this country could benefit companies by providing a gateway to Turkish-speaking countries. Baku’s relations with Ankara are based on the idea of “One nation, two states.” Therefore, companies wishing to operate in Turkey could take advantage of this situation,” the publication writes.

What prospects can this step have for Azerbaijan? About this interview with ASTANA with security expert Arastun Orujlu

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Question: Mr. Arastun, according to the information being released, the Azerbaijani government is offering Israeli companies operating in the high-tech sector the opportunity to come to the country in exchange for tax incentives. Do you think this is a successful invitation? What prospects does their coming to Azerbaijan offer for the country?

Answer: First of all, I would like to note that indeed, broad incentives are planned for IT (information technology) companies operating in Azerbaijan. There are relevant regulatory documents on this, but I am far from claiming that these documents are perfect and that they cover all necessary issues for IT activities. On the contrary, there are numerous gaps and flaws in the normative legal acts related to this field. Moreover, many questions arise regarding inviting Israeli IT companies to operate in Azerbaijan. These questions are extensive in scope. They concern not only economic and security issues but also political and even geopolitical aspects. However, since this cooperation project is not transparent, it is difficult to comment on all its aspects, although the sides that are open to the public already raise sufficiently serious questions. Based on these questions, there are strong reasons to say that the positive prospects of the deal for Azerbaijan will be minimal at best.

Question: Are security issues being adhered to in Azerbaijan? Who can guarantee that these companies and Israel will not carry out cyber espionage operations against other states, including Azerbaijan, through Azerbaijan?

Answer: No one and no country can provide such a guarantee, including Azerbaijan itself, as there is no assurance that any foreign company will not serve the intelligence purposes of its home country, nor can any foreign country guarantee that. Firstly, because IT companies in any country have close cooperation with their state institutions, including security agencies, and secondly, there does not seem to be significant success in the field of security and information security in Azerbaijan in general. One reason is that Azerbaijan's state institutions lack the necessary experience and human resources in this field, and another reason is that certain states maintain a special status in public opinion and in the state's attitude towards them. The dominance of concepts like “friend” and “brother” states in Azerbaijani society ultimately works against the country's security. Implanting such narratives in public consciousness not only makes citizens lose their vigilance and become victims of foreign intelligence but also serves to silence critical approaches to the activities of such states against Azerbaijani interests by targeting their authors.

Question: You are probably aware that intentions other than the IT sector are being utilized in Azerbaijan. The “Pegasus” programs can be cited as an example. Everyone knows that an Israeli company is behind this matter. Now, who will benefit the most from inviting Israeli companies operating in the IT sector to Azerbaijan?

Answer: The controversy surrounding the “Pegasus” program is still emerging and is one of the exposed cases. In reality, we could never have anticipated the extent of such activities. By the way, even the United States, which is Israel’s closest ally, has imposed sanctions on Israeli companies that created “Pegasus” and other similar programs targeting human rights and freedoms. At that time, Israeli officials claimed that “Pegasus” was sold to countries like Azerbaijan and Sudan to monitor terrorist activities. However, in Azerbaijan, those monitored through this program were invariably public-political activists, opposition representatives, human rights defenders, and journalists. It seems that the current socio-political situation requires new “Pegasus” and their creators. This version appears more convincing; otherwise, what economic and other contributions could foreign companies, exempted from all kinds of taxes for 10 years, not paying income tax on salaries up to $4,700 USD, having an annual turnover of only 200,000 manats, and receiving various state privileges, offer to the Azerbaijani state? Therefore, we can speculate that they might have been needed to assist the Azerbaijani authorities in monitoring activists within the country. Unfortunately, such dirty work has already been done many times before, as you mentioned.

Question: Israel itself uses cyber technologies for purposes other than technology. The recent explosions of pagers in Lebanon are said to be cyber terrorism carried out by Israel. Who can guarantee that such actions will not be taken against someone in Azerbaijan tomorrow?

Answer: There are many facts about Israel using IT technologies for various negative purposes, although other countries do not behave differently in these matters. The cyberattack carried out in Lebanon, regardless of how it is labeled, was the first operation of such a scale. Considering that a significant number of civilians were victims of the attack and that the operation aimed to create fear, terror, and panic in society, it can be termed a cyberterrorist act. On the other hand, there is an undeclared war between Israel and “Hezbollah,” a terrorist organization recognized by several leading states, operating in Lebanon. In this sense, the events can also be called “war crimes,” but let's leave that to the parties involved in the conflict and the relevant international institutions. No one can guarantee that similar actions will not be taken against Azerbaijan or its individual citizens in the future. Therefore, the country must think about its future now and strive to create successful Azerbaijani companies in the IT sector. They can be the only reliable guarantee for the country's success and security.

Question: Another aspect of the issue. If Israeli IT companies come to Azerbaijan, won’t this make Azerbaijan a target for other countries?

Answer: It certainly will, as Azerbaijan is adjacent to almost all countries in the region that could become targets. Sometimes, in this context, they deliberately manipulate the situation to direct attention primarily towards Iran so that they can succeed in legitimizing such projects in public opinion. However, we cannot say that Turkey, which we consider a brother state, would have a positive attitude towards this. Especially given the current state of Ankara-Tel Aviv relations. Let us not forget that Russia, which is trying to maintain comprehensive control over the region, is also present, and the extent of its influence over Azerbaijan is no secret. When you add various “proxy” organizations and terrorist groups hostile to Israel, the outlook does not seem at all encouraging.

Question: What steps need to be taken to prevent the unpleasant situations we’ve listed from occurring in the future?

Answer: First of all, I must say that the development of the IT sector is already of vital importance for any country. A single fact is enough to understand this: today, seven of the world’s ten largest companies by capital are technology companies. They are economic giants like Apple, Nvidia, Amazon, Microsoft, TSMC, Alphabet, and Meta. Just ten years ago, this list was completely different, and it will be entirely different again in five years. The technological revolution has already begun, and falling behind in this area could mean being left in the past forever. Therefore, it is extremely necessary to take urgent steps in these directions. To achieve this, conditions must be created for Azerbaijanis who have studied at the world’s leading universities but remained abroad because they couldn’t find a place in Azerbaijan to return to the country. State support must be implemented to develop existing startups and foster the emergence of new ones in the country. Special attention should be paid to education in this field, and special privileges should be offered to Azerbaijani citizens working in the IT sector. Only in this case can Azerbaijan have its own secure and successful IT sector, and the country's cyber security will be in reliable hands. It does not seem credible that those who create “Pegasus” and carry out grenade attacks could contribute to this.