DOI: https://doi.org/10.36719/2706-6185/57/135-140
Anar Isgandarov
Baku State University
Master's student
https://orcid.org/0009-0001-3489-9697
anarisgndrov064@gmail.com
Managing Existing Obstacles and Risks in Attracting Foreign
Investment to Azerbaijani Tourism
Abstract
This article provides a systematic analysis of the legal, political, and institutional barriers to attracting foreign investment in the tourism sector of the Republic of Azerbaijan. Global trends show that tourism is no longer limited to cultural and leisure dimensions; it has become one of the leading sectors generating significant economic value. Therefore, the investment climate — particularly legal certainty and risk management — plays a critical role in foreign investors’ decision-making processes. The paper explores key challenges such as political uncertainties, inconsistencies in the implementation of legal norms, long-term contract stability, and the efficiency of dispute resolution mechanisms.
The study focuses on the role of international arbitration in resolving investor–state disputes, assesses Azerbaijan’s bilateral investment treaties (BITs), and investigates possible legal and financial safeguard mechanisms that can enhance investor confidence.
It further examines the potential role of state-backed guarantees, risk insurance funds, and international platforms such as MIGA and ICSID in mitigating sector-specific risks. Based on the analysis, the article concludes by emphasizing the importance of improving the legal framework and developing a more adaptive investment policy for the tourism sector. These reforms are essential to ensure the long-term, stable inflow of foreign capital into the industry and to strengthen Azerbaijan’s position as an attractive tourism investment destination.
Keywords: foreign investment, tourism sector, legal risks, arbitration, BITs, investment protection, financial guarantees, ICSID, dispute resolution