Order No. 1279, dated October 26, 2026, issued by the President of the Republic of Azerbaijan, Ilham Aliyev, has established a new institutional framework for the management of construction projects. The document, which provides for the creation of a Coordination Commission for Construction Projects, integrates the simplification of administrative procedures, the coordination of inter-agency activities, digital data exchange, and the monitoring of outcomes into a unified reform logic. This approach links the assessment of construction permitting not merely to the duration of the procedure, but also to the quality of service, data transparency, and the interoperability of systems.

Abdulrahim Dadashov, Deputy Head of the Monitoring and Evaluation Department at the Center for Analysis of Economic Reforms and Communication, stated that the primary economic impact of the Order is not limited solely to the establishment of the new coordination body. The mechanism being implemented enables the identification of the causes of delays in the permitting process based on data, the benchmarking of less efficient stages, and the alignment of reform decisions with measurable outcomes. This feature holds particular significance within the World Bank’s “Business Ready” methodology—specifically regarding the “Business Location” topic—in terms of public services, data transparency, and operational efficiency.

Under the Order, the Commission will coordinate the prompt resolution of delays arising during the preparation, approval, and permitting phases of construction projects financed by public funds; it will also monitor whether applications are processed within the established regulatory timeframes by obtaining reports from the relevant authorities. Furthermore, the implementation of open, transparent, and competitive mechanisms—including digital tools—for projects funded by the private sector also forms an integral part of this reform agenda.

A. Dadashov noted that, in this context, digital integration is not merely a standalone technological innovation, but rather a means to reduce administrative burdens. Improving state information resources related to construction permits, consolidating essential data into a unified database, and strengthening inter-system integration can help reduce the need to repeatedly submit the same information to various agencies, ensure the traceability of process stages, and facilitate more prompt decision-making.

The new institutional framework is built upon a digital foundation established in previous years. Reforms in the issuance of construction and occupancy permits have accelerated the transition from a model reliant on physical documentation and separate applications to various agencies toward a unified electronic service system. Since a construction permit encompasses the legality of land use, project safety, utility infrastructure, and the future operation of a facility within a single process, the clarity and efficiency of these procedures directly influence the investment decisions of entrepreneurs.

The “single-window” approach developed in recent years has facilitated enhanced data exchange among state agencies, enabled the electronic submission of documents, and allowed for the receipt of final outcomes in an electronic format. The integration of the Electronic Construction Portal, the State Register of Construction, and the Urban Planning Control subsystems into a unified information support system goes beyond merely allowing for the electronic submission of applications; it ensures that all stages of the administrative process are conducted in a coordinated manner.

Since 2023, the integration of the process for obtaining technical specifications for utility infrastructure—such as electricity, water, sewage, and gas—into the construction permitting procedure has reduced the need for entrepreneurs to submit separate applications to individual utility providers. Coordinating the expert review of construction projects, the acquisition of technical specifications, and the receipt of opinions from relevant authorities within a single information system has established the practical foundation for the principle of "single application – coordinated process – electronic outcome."

Another change implemented in this sector in 2026 relates to Resolution No. 26 of the Cabinet of Ministers, dated January 27, 2026. Under this Resolution, it is now stipulated that information regarding the extension of a construction permit’s validity period must be provided immediately upon the decision being made, rather than within the previous three-business-day timeframe. Although the amendment does not alter the grounds for extending a permit or the overall timeframe, it serves to eliminate time delays during the stage of delivering the decision to the applicant and enhances the predictability of the process.

A. Dadashov added that the mere existence of an electronic service does not guarantee that it functions with equal convenience and reliability for all users. Quality service entails clearly specifying the required documentation, providing timely notifications regarding the stages of an application, justifying requests for additional documents or decisions to reject an application based on specific legal grounds, minimizing the need for the resubmission of information, and offering an effective support channel in the event of technical malfunctions. The coordination and monitoring capabilities of the new Commission could facilitate the systematic identification and addressing of these practical issues.

The World Bank’s “Business Ready 2025” report further underscores the significance of this new institutional mechanism within the context of international assessment criteria. The report’s “Business Location” topic evaluates the regulatory framework governing how entrepreneurs acquire, lease, or construct commercial premises; it assesses this based on the quality of the regulatory framework, the provision of public services, data transparency, and the practical efficiency of the processes involved. This methodology evaluates not only the existence of an electronic portal but also its functionality, the interoperability of databases, the upfront visibility of fees and timelines, the availability of complaint mechanisms, and the actual time required for process completion. According to the “B-READY 2025” results presented on the “Azranking” platform, Azerbaijan scored 70.99 out of 100 possible points in the “Business Location” category. In the country profile, the regulatory framework was rated at 70.47 points, public services and data transparency at 56.64 points, and operational efficiency at 85.86 points. The results indicate that the legal framework and the practical speed of issuing permits are relatively strong, while the primary potential for further development lies in the scope of digital services, inter-system integration, and open data.

In the World Bank’s country profile, the sub-category for digital public services related to construction permits received 6.6 out of 8 possible points. Additionally, the country scored 10 out of 20 points for service interoperability and 25 out of 40 points for data transparency. According to A. Dadashov, the unified database, inter-agency integration, monitoring of execution timelines, and the expansion of digital solutions—all mandated by the Order—directly address the existing opportunities for improvement in these areas. He emphasized that one of the areas where practical implementation will expand in 2026 is the notification mechanism for temporary structures on agricultural land. The Rules, approved by the Decree of the President of the Republic of Azerbaijan dated December 5, 2025, provide for the electronic submission of information regarding temporary structures—built using lightweight materials and designed for easy assembly and disassembly—intended for agricultural purposes. They also mandate that these structures be recorded in a unified registry within the State Register of Constructions. This simplified notification process does not signify the elimination of oversight; rather, it entails tailoring such oversight to the nature of the structure and its associated risk level.

Another reform initiative in the realm of construction permitting involves the integration of "green construction" and "green building" approaches into the legislative framework. The Action Plan, approved by the Order of the President of the Republic of Azerbaijan dated January 30, 2026, envisages the analysis of urban planning and construction legislation, the examination of international best practices, and the development of proposals to improve normative legal acts—all with the aim of mitigating the impacts of climate change in urban areas. This initiative could facilitate the better integration of energy efficiency, water conservation, sustainable construction materials, waste management, and building life-cycle costs into design and expert review criteria.

A. Dadashov emphasized that the new legal and institutional framework shifts the focus in the realm of construction permitting from the mere existence of procedures to their actual quality. As service interoperability and data transparency improve—driven by legal simplification, digital integration, regular electronic reporting, and independent monitoring—these changes could also positively influence Azerbaijan’s standing regarding the “Dealing with Construction Permits” indicator. Thus, the construction permitting process becomes not merely an administrative procedure, but a governance tool that supports the efficient implementation of public investments and a more predictable business environment for the private sector.