President Ilham Aliyev has signed the law "On Crowdfunding," which was adopted by the Milli Majlis on July 14.
Operative Information Center-OMM reports that the new legislation establishes the legal, organizational, and economic framework for equity and debt-based crowdfunding. It defines requirements for crowdfunding platform operators and outlines the mechanisms for state regulation and supervision of these activities.
The primary objective of the law is to create accessible, sustainable alternative financing channels for economic entities, particularly startups, as well as micro, small, and medium-sized enterprises. By leveraging information systems and capital market opportunities, the law aims to boost business activity while ensuring the protection of investors' rights.
Crowdfunding activities will be regulated in accordance with the Constitution of the Republic of Azerbaijan, the Civil Code, international treaties, and specific legislation, including laws on anti-money laundering and counter-terrorism financing. The Central Bank of Azerbaijan will oversee the implementation of these regulatory acts.
The law does not apply to legal entities established by the state for investment policy purposes, nor does it cover activities within the Alat Free Economic Zone, which are governed by the "Law on the Alat Free Economic Zone."
The legislation will enter into force six months after its official publication. In conjunction with the law, the President has signed a decree mandating the Cabinet of Ministers to align existing legislation with the new requirements within four months. Furthermore, the Central Bank of Azerbaijan is tasked with approving regulatory acts regarding capital requirements, platform security, and reporting standards within a six-month timeframe.
