Azerbaijan seeks to nurture tech sector as it looks beyond oil

Azerbaijan seeks to nurture tech sector as it looks beyond oil COP29 climate summit in Baku · Reuters Nailia Bagirova Mon, August 17, 2026 at 6:59 AM EDT 2 min read By Nailia Bagirova BAKU, Aug 17 (Reuters) - Long reliant on oil and gas exports, Azerbaijan is courting foreign investment in its small but growing technology sector with a ‌series of reforms aimed at attracting tech companies and venture capital. The former Soviet ‌republic has been heavily dependent on energy exports since it gained independence in 1991. At the height of the oil ​boom, hydrocarbons accounted for about three-quarters of economic output and 90% of exports, according to the International Monetary Fund. The technology sector, in contrast, accounted for just 2.1% of gross domestic product last year, up from 1.9% in 2024, but the government aims to grow that share and turn the ‌capital, Baku, into a technology and ⁠innovation hub on the Caspian Sea. LEGISLATION ESTABLISHES INVESTMENT FRAMEWORK Legislation passed in July creates a legal framework for investment instruments, which the government says will ⁠allow startups and investors to structure deals in Azerbaijan rather than setting up entities in foreign jurisdictions, reducing costs and making subsequent funding rounds easier. Foreign venture capital and corporate and institutional investors are expected ​to provide ​a significant share of new funding to the ​industry, Deputy Digital Development Minister Rashad Hasanov ‌told Reuters. Baku also pla…