REGULATORY MECHANISMS FOR STIMULATING INVESTMENT IN INNOVATION AND STARTUPS

In the context of modern economic transformation, the expansion of digital technologies and the rise of knowledge-based models have positioned the innovation and startup sector as a key driver of sustainable development. In this regard, the legal support of the innovation environment and the promotion of startup activity play a central role not only in economic growth but also in ensuring technological resilience. Stimulating investment, providing tax incentives, legal transparency, and protecting investor rights are essential prerequisites for sectoral development. In Azerbaijan, although significant steps have been taken in recent years to establish a legal framework for innovation and startup activity, the existing normative base remains fragmented and inconsistently implemented. Instruments such as the "Startup Certificate" are present in legislation, but their broader application, the development of mechanisms ensuring legal protection for investors, and the adaptation of international experience remain key challenges. This paper explores the legal status of innovation and startup activity within national legislation, analyzes the current investment promotion mechanisms, and evaluates the legal regimes of technoparks and innovation zones. The study also examines how investor rights are protected and proposes specific legal reforms based on global best practices. The findings highlight that the development of the innovation sector requires not only economic tools but also a robust legal foundation and strong institutional support.