As cities worldwide embrace technology and innovation to drive economic growth, emerging startup ecosystems are reshaping urban landscapes. Dubai and Singapore have rapidly positioned themselves as global tech hubs by offering tax incentives, government support and cutting-edge infrastructure to attract top talent and investment in industries like fintech, AI and blockchain.
Now, Baku is making strides to join this transformation, leveraging its strategic location, skilled workforce and government-backed initiatives to foster a thriving startup ecosystem. While it has yet to reach the global stature of Dubai or Singapore, Azerbaijan is steadily building the foundation for a competitive digital economy.
The country’s growing tech potential
With a low-tax environment, strong government backing and a fast-expanding IT sector, Azerbaijan is emerging as a key player in Eurasia’s digital economy. As a multicultural nation with a population of 10 million, its linguistic and cultural diversity makes it a strategic gateway to Türkiye, the former Soviet republics and the MENA region. Affordable living costs, business-friendly policies, and a rapidly developing tech ecosystem provide a fertile ground for startups and investors alike (Startup Genome).
Azerbaijan’s economic shift from an oil-dependent model to a digital and green economy is accelerating growth in its tech sector. The country plans to increase its non-oil GDP by 130% by 2026, with IT service income rising at an annual rate of 18%. Over 450 e-government services are now available, reflecting the country’s commitment to digital transformation.
Government support and startup growth
Azerbaijan’s Technopark law offers attractive incentives to IT companies, including zero profit tax, reduced income tax (0-5%), and simplified access for foreign professionals, who receive automatic residence permits without the need for work permits. These policies are powering the rapid expansion of Baku’s startup ecosystem, which grew by 40% between 2022 and 2024. The country now boasts over 100 active startups, with an ambitious goal of reaching 500 by 2026. A rising flow of venture capital investments, a strong collaborative community and frequent networking events are further driving innovation and professional growth (Startup Genome).
The Digital Silk Way and AI leadership
At the same time, Azerbaijan’s Digital Silk Way project aims to position the country as a key digital bridge between Europe and Asia. A $50 million joint investment with Kazakhstan will finance a Trans-Caspian fiber-optic cable, enhancing digital infrastructure and trade efficiency. This initiative strengthens the Middle Corridor, integrating digital logistics and paperless trade solutions. Additionally, partnerships with major tech firms like Google and Amazon are reinforcing Azerbaijan’s role in global digital commerce (Daily Sabah).
Most recently – on March 18, Azerbaijan approved its Artificial Intelligence (AI) Strategy (2025-2028) to accelerate AI-driven innovation and digital transformation. The strategy emphasises investment in AI startups, workforce training, data security and international collaboration, positioning Azerbaijan as a regional leader in AI development (Trend.az).
Azerbaijan’s future as a digital powerhouse
With strong government support, ambitious digital projects and an expanding startup ecosystem attracting investment, Azerbaijan is making significant strides toward becoming a major tech hub in Eurasia. As an Azerbaijani citizen, I take great pride in seeing my country transform into a regional center of digital innovation. With a rich history, a vibrant culture and an unwavering spirit of progress, Azerbaijan is poised to become a rising global competitor alongside major tech hubs like Dubai and Singapore.
