Summary 

In the conditions of modern market economies, small businesses in the South Caucasus countries are considered as the main driving force of economic reconstruction and growth. Most studies conducted over the past decades show that the number of small enterprises in the private business sector is growing faster than that of large enterprises. This indicates that small businesses should be the central point of the country's industrial policy, the aim of which is to accelerate the allocation of resources from the public sector to the private sector in order to create sufficient jobs and in this regard achieve the primary goal of sustainable development, "overcoming poverty".

Small businesses in the South Caucasus countries face significant challenges, including limited access to finance, complex regulations and the lack of qualified labor force. Resolving these problems naturally requires, first of all, tailored policy interventions/tax policies.

The article discusses the significant challenges facing the small business sector in the South Caucasus countries. Also, mechanisms that will help small entrepreneurs easily overcome challenges and develop have been assessed. Based on all this, relevant conclusions and recommendations have been prepared.

Keywords: small business, small business challenges, promotion of small business development, special taxation regimes.