Azerbaijan's Medical Tourism Sector Grows With Tax Incentives & Infrastructure Development

(MENAFN- AzerNews) Nazrin Abdul Read more

In recent years, Azerbaijan has made significant strides in positioning itself as a key player in the burgeoning global medical tourism industry. The country's abundant natural resources, including therapeutic oils, mineral waters, and balneological opportunities, combined with its growing healthcare infrastructure, have set the stage for Azerbaijan to emerge as a major destination for international medical tourists. This shift has been reinforced by strong governmental support aimed at fostering the growth of medical tourism.

The adoption of new policies, such as tax incentives for foreign patients and infrastructure development, is part of a broader strategy to stimulate the country's health sector, attract foreign investment, and increase economic revenue from tourism. We are exploring the progress Azerbaijan has made in the medical tourism field, examining the role of government support, and analysing the future prospects of this sector.

Azerbaijan's medical tourism landscape

Medical tourism is a dynamic sector where countries with specialized healthcare services and unique therapeutic resources attract foreign patients seeking high-quality, affordable medical treatment. Azerbaijan has positioned itself strategically to take advantage of this trend. The country's rich resources, such as Naftalan oil - a therapeutic oil with a history of medicinal use dating back to ancient times - and its vast network of mineral-thermal springs, give it a competitive edge in the medical tourism market. Additionally, regions like Garabagh, Kalbajar, and Lachin offer unique balneological and therapeutic tourism opportunities.

Government support and strategic policies

Azerbaijan's government has been instrumental in fostering the sector's growth through targeted policies, infrastructure investments, and international partnerships. One of the most notable recent developments is the introduction of amendments to the Tax Code, which provides tax incentives to medical service providers catering to foreigners. This move is designed to reduce the tax burden on businesses while encouraging investments in the healthcare and tourism sectors.

The government adopted a major amendment to the country's Tax Code, allowing for the full return of VAT paid on medical services provided to foreign patients. This initiative is expected to significantly boost the medical tourism sector by making health services more affordable to international clients. The introduction of tax incentives for medical services aimed at foreigners is also likely to encourage foreign investors to establish medical facilities in the country, thus improving access to advanced medical technologies and specialized care.

Furthermore, the development of health tourism zones in areas like Kalbajar and Lachin is another demonstration of government support. These regions, rich in mineral-thermal waters and clean air, offer substantial potential for wellness retreats and medical treatment centers. President Ilham Aliyev's decree on increasing the role of Naftalan oil in health tourism is another key development, as it helps to revive an ancient healing tradition that dates back to the 19th century. Once certified for international medical standards, the therapeutic Naftalan oil is expected to draw medical tourists from Western countries and boost the country's global appeal.

International collaborations and infrastructure development

Azerbaijan is also leveraging international collaborations to improve its medical tourism offerings. The October 2024 "Azerbaijan Health Tourism Conference: Opportunities for Development" in Shusha brought together experts from countries such as Turkiye, Russia, Switzerland, and Malaysia to explore best practices in the medical tourism industry. These partnerships are helping to enhance the quality of care, improve marketing strategies, and promote Azerbaijan's offerings in global markets.

The government's investment in infrastructure, such as the renovation of the Istisu sanatorium in Kalbajar and the construction of new medical facilities, further solidifies Azerbaijan's commitment to developing its medical tourism sector. The presence of three international-standard airports in the Garabagh region will also facilitate easier access for international tourists, ensuring that the country is well-connected to global markets.

Additionally, the establishment of international-standard medical centres and rehabilitation facilities has attracted attention from both foreign medical professionals and tourists. The improvement in medical infrastructure not only aims to increase the number of tourists but also aims to enhance the overall health care standards within the country.

Despite its promising potential, Azerbaijan's medical tourism sector faces several challenges. One of the main barriers is the lack of international certification for certain therapeutic products like Naftalan oil, which limits its appeal to Western medical tourists. The certification process is currently underway, and once completed, it is expected to open up new markets for Azerbaijan's health tourism.

Another challenge lies in raising awareness about Azerbaijan's medical tourism offerings in international markets. While the country has made notable strides in marketing, it still competes with other well-established medical tourism destinations like Thailand, India, and Hungary. Therefore, Azerbaijan must continue to invest in marketing campaigns and collaborate with international health insurance companies, travel agencies, and medical facilitators to expand its reach.

Looking ahead, Azerbaijan's medical tourism sector is poised for growth. The government's continued investment in infrastructure, international certification of therapeutic resources, and strategic collaborations will play key roles in overcoming existing challenges. With a robust and evolving health tourism landscape, Azerbaijan is well-positioned to attract a steady stream of international medical tourists in the coming years.

In conclusion, Azerbaijan's government has taken significant steps to position the country as a competitive destination for medical tourism. By leveraging its natural resources, improving infrastructure, offering tax incentives, and engaging in international collaborations, the country is on the path to becoming a prominent player in the global medical tourism market. As the government continues to support and develop this sector, Azerbaijan has the potential to not only enhance its economic standing but also to provide high-quality medical services to foreign patients. The recent amendments to the Tax Code, aimed at reducing the tax burden on medical service providers and promoting investments in the sector, demonstrate a strong commitment to fostering the growth of medical tourism. With continued governmental support and an unwavering focus on international collaboration, Azerbaijan is well-positioned to reap the rewards of its investments in medical tourism, contributing to both economic growth and the enhancement of the country's global health care reputation.

MENAFN18122024000195011045ID1109007572