What is a grant?
A grant is material assistance rendered in order to develop and implement humanitarian, social and ecological projects, works on rehabilitation of destroyed objects of industrial and social purpose, as well as infrastructure in the territories damaged as a result of war and natural disaster, programs in the field of education, health, culture, legal advice, information, publishing and sport, scientific, research and design programs, along with other programs that are important for the state and society.
A grant can be issued in form of financial means and/or other material form.
Who can give out grants?
The following entities and individuals can issue grants:
- Bodies financed from the state budget of Azerbaijan (for example, ministries and other state bodies);
- Legal and natural persons of the Republic of Azerbaijan (for example, citizens or local commercial or noncommercial entities);
- International organizations and their representative offices, foreign governments and their representative offices, international organizations with charitable, humanitarian, and other social purposes, financial and credit institutions, foreign public organizations including funds, associations, federations, and committees as well as branches and representative offices of foreign legal entities registered in Azerbaijan (branches and representative offices of foreign NCOs that signed an agreement with the Ministry of Justice (MoJ), carrying out activities in the field of development of education, science, health, culture, and sport, so long as such activities are not aimed at the direct generation of profit.
A foreign entity can provide grants to local NGOs and FNGOs with registered offices in Azerbaijan only if it has a registered branch or representative office in Azerbaijan and has signed an Agreement with MoJ.
Who can be a grant recipient?
The following entities and individuals may receive a grant:
- The Government of Azerbaijan and bodies financed from the state budget of Azerbaijan;
- Municipalities (local government bodies);
- Local and Foreign NGOs, with the latter having a registered branch and representative in Azerbaijan;
- Public legal entities (legal entities established by the state or municipal bodies); and
- Natural persons of Azerbaijan (i.e., citizens, foreigners or stateless persons).
Is a grant subject to income tax?
No, if it is duly registered.
What is the procedure for registration of a grant agreement (decision)?
An NGO as well as natural person receiving a grant shall submit an application for registration of the grant to the MoJ within one month from the signing of an agreement (decision) accompanied by original copy of the agreement (decision).
The following documents shall be submitted to the MoJ for grant’s registration:
- Original copy of the grant agreement (decision) signed by the grantee and donor;
- Project description signed by the grantee and donor (this can be a part of a grant agreement as well);
- Copy of ID if a donor or grantee is a natural person;
- Power of attorney if the application is submitted by a person who is not a legal representative of the submitting entity;
- Financial-economic justification of the grant.
It is recommended also to attach a document confirming submission of the annual financial report.
There is a standard application form for grant registration. If the documents are issued abroad, they have to be legalized or apostilled, as well as translated into Azerbaijani language. The copy of the grant agreement/decision does not have to be notarized.
What are the grounds for rejecting a grant registration?
The following are the grounds for rejecting the application for grant registration:
- Incomplete application and missing documents required under the law;
- If activities under grant violate the legislation of Azerbaijan, or the recipient’s charter, including if the conditions of a grant agreement (decision) contradict the definition of a grant;
- If similar areas are financed by the Azerbaijani government;
- If the foreign donor does not have a registered office in Azerbaijan;
- If the person signing a grant agreement (decision) does not have the authority to do so;
- If there is not written consent from the donor that the property purchased under a grant be sold during the project;
- If the terms of the grant agreement (decision) are unclear and the planned activities are not specified;
- If annual financial reports of NGO-grantee were not submitted to the MoF;
- If the opinion of the MoF on the financial-economic expediency of the grant is negative (for example, if the purpose or financial-economic justification of a grant were not clear, as determined at the MoF’s discretion);
- If deficiencies identified by the MoJ are not rectified in a timely manner.
What is the timeframe for the MoJ’s registration of a grant agreement?
The MoJ should register a grant agreement (decision) within 15 days of submission and issue a notification of registration to the applicant NGO.