Azerbaijan to obligate state companies to allocate at least 30% of net profit to dividends starting in 2027
BAKU. Feb 9 (Interfax) - The Azerbaijani Finance Ministry will implement a practice starting in 2027 obliging state enterprises to pay at least 30% of net profit to the state budget in the form of dividends, according to the ministry's report for 2025.
It was previously reported that the norm regulating dividend payments by state companies came into force in 2026. However, according to the Finance Ministry's report, this year the department will only engage in preliminary calculations of future dividend payments.
"In 2026, the Finance Ministry plans to begin work on forecasting dividend payments by state companies; their payments to the budget will begin in 2027," it said.
As reported, on December 29, 2025, Azerbaijani President Ilham Aliyev approved the rules for distributing net profit and the general parameters of the dividend policy of legal entities in state ownership, legal entities whose controlling stake/shares belongs to the state and public legal entities.
State enterprises will be exempt from the need to pay dividends to the state budget if their net profit for the reporting year is below 100,000 manat. For a number of state companies (from the transport sector and security sphere), this norm is reduced to 20,000 manat.
The objectives of adopting these rules are: determining the dividend income of state enterprises, ensuring the compliance of the state enterprise's activities with the social and economic interests of the state, stimulating effective and profitable activities of state enterprises, ensuring long-term development and maintaining the financial stability of the state enterprise, and ensuring the optimal distribution of net profit.
By May 1, the Finance Ministry will send the state enterprise a letter on preparing forecasts of dividend payments to the state budget for the next year and the corresponding reporting forms.
Based on the actual indicators of the previous reporting year, by July 1 of the current year the enterprise submits to the Finance Ministry information on the forecasted indicators for dividend payments for the next year.
In Azerbaijan's state budget for 2026, dividend income from state enterprises is provided at the level of 600 million manat ($353 million at the current exchange rate). The majority of these dividends will come from the State Oil Company of the Azerbaijani Republic (SOCAR) and the country's largest bank, the International Bank of Azerbaijan.
Previously, there were no norms in the country regulating dividend payments by state companies. The government made decisions on an individual basis regarding which enterprise would pay dividends and in what amount.
The official exchange rate on February 9 is 1.7 manat/$1.
