The United Arab Emirates stands as a vibrant example of innovation and technological advancement. The nation’s government is brimming with digital agencies and think tanks that steer both public and private sectors towards optimal practices and fresh opportunities. Non-oil sectors contributed 71% to the 2023 GDP, and Foreign Direct Investment (FDI) surged to US$23 billion. Notably, the UAE topped the Global Entrepreneurship Monitor (GEM) rankings for the third consecutive year, making it a prime location for business growth. However, in a globally interconnected digital economy, there’s always another frontier to explore. The UAE’s business-friendly environment allows tech startups to scale rapidly, attracting eager customers and scarce talent to establish themselves. So, what lies ahead? Which horizon should UAE tech brands target next? Traditional hubs like India and Eastern Europe have solidified their positions, but focusing solely on these regions might overlook potential opportunities for UAE businesses in expansion mode.
One such promising nation is Azerbaijan, situated between the Caspian Sea and the Caucasus Mountains. Historically peaceful, Azerbaijan is home to a young, 10-million-strong, multilingual population, with a median age of 33.1 years, slightly younger than the UAE’s 33.6 years. This population works within the same time zone as the UAE, offering a strategic advantage. Whether outsourcing or expanding market reach, businesses must carefully evaluate their options. The UAE’s strength, and the primary reason why entrepreneurs choose it as a launchpad, lies in its government’s vision for the private sector. As the Emirates transitions away from oil dependency, it emphasizes the importance of innovation—a task perfectly suited for private enterprise. Azerbaijan shares this perspective, having crafted a strategy that balances robust regulatory oversight with support for emerging businesses. The Azerbaijani government has streamlined setup processes and ensured legal procedures are transparent.
Business leaders are enticed by tax incentives for relocation, with rates as low as 0%. However, the government’s support extends beyond favorable laws. It operates programs to identify and fast-track top talent from university students, accelerating the time to value for human resources. Similar to the UAE, Azerbaijan’s government plays a pivotal role in establishing digital infrastructure essential for business operations. The country has taken bold steps to create specialized agencies, such as the Innovation and Digital Development Agency (IDDA), which has propelled Azerbaijan into one of the fastest-growing tech ecosystems in the region. IDDA, akin to the UAE’s numerous incubators and business support agencies, drives initiatives to foster a conducive environment for tech companies expanding into Azerbaijan.
The government also recognizes the paramount importance of safeguarding digital infrastructure to protect modern businesses from cyber-attacks. With Azerbaijan ranking 40th out of 194 nations in the International Telecom Union’s (ITU) Global Cybersecurity Index (GCI), UAE businesses can trust that the digital infrastructure supporting their operations will remain resilient. When UAE business leaders consider Azerbaijan, they’ll find a welcoming environment beyond just government support. The country’s multicultural workforce, enriched by influences from Eastern Europe, the Middle East, and Western Asia, offers a strong advantage in multinational team settings. Many Azerbaijanis are multilingual, fluent in the official language, English, and Russian.
Many UAE businesses have grown into regionally and globally recognized brands. From e& to Emirates to dnata, Emirati companies have inspired a culture of ambition and global vision. It’s likely that many UAE entrepreneurs are already eyeing foreign markets for potential entry points. Geography plays a significant role in their decision. For a country to be a viable business hub, it must offer more than just the right location. It needs the right conditions, transport infrastructure, and legal environment to facilitate smooth expansion. Azerbaijan, positioned between eastern and western markets, offers these elements, with major ports and airports ready to transport goods and people to all corners of the globe. This is why companies from Türkiye, Israel, and Pakistan are already expanding their operations into Azerbaijan.
The UAE understands the synergy of favorable laws, a diverse talent pool, strategic geography, and a stable government to attract FDI. As UAE business leaders embark on the next chapters of their success stories, location will be crucial. Competing in a global arena requires choosing regional bases where they can feel secure and thrive.
