Introduction
In recent times, Armenia has emerged as an attractive destination for foreign investors due to its simplified procedures for registering legal entities and high profitability of business activities. According to Forbes analysts, in the first quarter of 2023, citizens of the Russian Federation have opened more than 3,400 companies in Armenia, of which 2,000 are individual entrepreneurs. This trend indicates the significant foreign investment that Armenia has received in the past year.
To give you a better perspective, as of 2023, the total number of registered companies in Armenia has reached 3,874. These companies have generated a total annual income of €17,761,169,219. This impressive figure showcases the immense potential and opportunities that Armenia offers to businesses and investors. With its strategic location, skilled workforce, and supportive government policies, Armenia has become a favorable destination for foreign companies looking to expand their operations and increase their profits.
Key takeaways
According to statistical data and indicators of recent years, Armenia is a center of business activity with huge prospects for both its residents and foreign investors.
What do you need to register a company in Armenia?
Until applying to register a company officially, the founders of the company shall decide:
The form of incorporation (LLC, CJSC, OJSC etc.),
Company’s business address,
An amount and value of shares or stocks,
An amount of shares or stocks of each shareholder or stockholder,
The passports and social cards of shareholders or stockholders,
Appointment of chief executive director (CEO).
Moreover, during the procedure of company registration, it is not mandatory having a work permit or conclusion on a matching list of exceptions of acquiring a work permit and residency status. Know more about obtaining a work permit in Armenia. You can see Gritarres Legal services on the acquirement of work permit.
Key takeaways
No work permit or residence status is required to open a company in Armenia.
Business Name
The business name of the company is registered simultaneously with the company registration. The company has the right to have such a business name that other companies have not used. Companies are entitled to use their business name for trademark, letterhead, and other marketing purposes. If a legal entity registered its business name in order of law, it has the special right to use it.
Companies shall not have such a business name which contains in its words of state-governmental bodies of Armenia, the full or half names of international organizations which are protected by the force of the international agreement, insults and contradict national and spiritual values, humanity and moral principles.
Companies have the right to use in their business name also "Arm", "Armenia", and "Armenian" words and their translations. However, to use these words, obtaining an advance permit and paying an annual 600.000 AMD as a state fee is necessary.
Companies business name shall contain in it also its' form of incorporation (LLC, CJSC, OJSC, and so forth).
Key takeaways
The business name of the company is registered simultaneously with the state registration of the company, and the business name must not coincide with the business names of other companies.
Legal Address
Throughout of registration of the company, the founders shall also provide the company's address. The business address should be demonstrated in the company's charter. Several companies have the right to have the same business address. Furthermore, renting a business place to register as a legal address is not mandatory. For example, a legal address can be to owner's apartment address, and so on.
Shareholders and manager (CEO)
Founders, shareholders, or stockholders can be resident and non-resident individuals and companies as well as states, e.g. the Republic of Armenia or other states, and their municipalities. Non-resident individuals shall submit notarized translations of their passports. The non-residents who are not physically in Armenia shall send a copy of their passports to Armenia approved by apostille.
Concerning the necessary documents (for non-resident organizations), the founders have to provide:
a decision on willingness to register company in Armenia made by their managing body,
the Articles of Associations,
and a document which demonstrates tax number of company (protocol, statement).
In this case, the whole documents should also be sent to Armenia and approved by apostille.
It is worth mentioning that Armenian company's stocks and shares transfer in the order of heritage if anything else is not provided in the company's charter.
Taking into account the form of the company (LLC, CJSC, OJSC), shareholders or stockholders are not liable for the proper and timely performance of the company's responsibilities.
The company has the right to have a resident or non-resident, 18 years old or above, capable individual CEO. If a company's charter directly contains an opportunity which allows performing responsibilities of the CEO by another company, the duties can be transferred. In this case, the company will professionally serve the CEO's responsibilities. Moreover, the company will pay low taxes.
Key takeaways
Founders, participants or shareholders of the company can be resident and non-resident natural and legal persons, the Republic of Armenia, communities of Armenia, other states and their communities.
Documents
To register a company, the founders shall provide to the State Register Agency of Legal Entities of Armenia the following documents:
Application form,
Founder’s (founders) decision on founding a company. The decision shall contain the form of the company, information on approvement of charter, amount and value of shares or stocks, the appointment of CEO, choice of company's name, legal address, and so forth.
Charter of company,
Announcement on the real beneficiary,
Copies of passports and social security cards of founders and CEO.
For registering as a sole entrepreneur is necessary to submit the following documents:
Passport,
Application,
State fee.
Registration Process of a New Company in Armenia
Registration Process
When founders have decided to use a common form of examples approved by the Ministry of Justice of RA, they can go to the State Register Agency of Legal Entities of Armenia or the "Hay Post" CJSC postal service, each office with the passport and register company.
In the rest cases, the founders should make an appropriate decision and prepare relevant documents. After these, they need to apply for registration.
Companies which aim to run a business in the financial field (for example, banks, credit organizations, and so on.) should apply their documents to the Central Bank of RA. The Central Bank of RA not only registers a company but also gives an appropriate license.
Timeline
On the one hand, companies’ registration takes after applying 2 up to 3 working days.
On the other hand, there is an exception; when an applicant uses the form of examples, it will be registered immediately.
Registering a sole entrepreneur will be done immediately.
Costs
Company registration is free of charge, while for registering as a sole entrepreneur state fee is 3.000 AMD.
Expenses for document translation and notary verification depend on the number of pages. Each page is 2.000 AMD.
Preparing a stamp from 5000-20.000 AMD. (Disclaimer: it is not necessary)
For more information on current exchange rates, please click here.
Key takeaways
State registration of the company is free and may take up to three days.
Amendments and Dissolution of the Company in Armenia
Companies can (mergers and acquisitions) perform mergers, amalgamation, division, separation, and restructuring. In the case of reorganization, the rights and obligations pass in order of succession. In the case of dissolution, the rights and obligations of companies terminate.
Additional information
Companies have a right to have representatives which are representing companies' interests and perform defence of those. They can also register branches that perform companies' the whole or the part of activities, including representatives' activities. Those are not considered legal entities and act based on the charter, which the shareholders approve.
After company registration, for running a particular type of business activity company shall obtain a license, certificates, and permits.
Ultimate Beneficial Ownership (UBO) (How to fill out the declaration on real beneficiaries in Armenia)
From an entrepreneurial perspective, individuals who benefit from a company's success are often not necessarily documented, shareholders. The ultimate beneficiaries may include those;
Who receives dividends,
Enjoy the advantages created by the company,
Make essential decisions in place of the listed shareholders, or have enough voting power to influence significant business decisions. According to Armenian law, having a stake of 20% or more in the company's capital is sufficient to hold such influence.
The burgeoning influx of international investments in Armenia has prompted the implementation of new regulations regarding the disclosure of information pertaining to companies' Ultimate Beneficial Owners (UBOs). While companies already hold a fiduciary obligation to possess documents containing data on UBOs, recent amendments have mandated that companies registered in Armenia have to declare their real beneficiaries beginning January 1st, 2023. This declaration must encompass comprehensive information about the UBOs, in particular;
The name, surname, and position of the declarator who is acting on behalf of the company,
Information about the listing of the company's shares or the admission to trading on a stock market,
Information about the listing of the organization which completely controls the company (the certificate of the company, which should demonstrate the tax number and the registration number of the company as well as the name and surname of the CEO of the company) as well as information about the volume of participation of the company,
Information about the volume of the participation of state, municipality, and/or international organizations,
Information about the UBO, in particular: their name, surname, citizenship, date of birth, the number of passports (date of issue and so forth), Social number, residency address, contact details (email, phone number, and so on), the date of becoming UBO,
The bases which are proved that an individual is an ultimate beneficiary,
Information about the individuals and/or organizations who/which influence the decision-making process of the company,
Information about the intermediate company (Registration number, tax number, name, and surname of the executive director).
It is important to note that the declaration of a company's Ultimate Beneficial Owner (UBO) must be submitted within 40 days of the company's registration, and in the event of a change in UBO, within 40 days of the company becoming aware of the change. Furthermore, regardless of any changes to the UBO, companies must submit an annual declaration by February 20th stating that the UBOs have remained the same over the past year. However, if there have been changes to the UBO, information regarding the new UBO must be provided.
At the same time, the will to ensure that the company beneficiary information is accurate and trustworthy is understandable. When state authorities are concerned about the authenticity of the provided information, they may collect tax and customs declarations to verify its legitimacy.
In the case when the company is formally registered with the Central Bank of Armenia, there are prescribed different procedures that must be followed to disclose the Ultimate Beneficial Owner (UBO).
Key Takeaways
Each company is obliged to submit a declaration about the beneficial owner by February 20 of every year.
Conclusion
Armenia has a desire to develop the economy thus the Armenian parliament adopted a simplified procedure for registering a company. International investments and the number of non-resident companies gradually increase.
Armenia also simplified the licensing procedure for running various types of business by providing enough opportunities to the investors.
Given the importance of the protection of foreign investors, Armenia signed several international agreements. Under these international agreements, Armenia provides high-level of protection of foreign investments.
Frequently Asked Questions (FAQs)
Can I register a company in Armenia remotely?
Yes, you can register a company in Armenia remotely. To do this, the company’s founder(s) must provide a copy of their passport, which needs to be sent to Armenia. The passport copy must be officially authenticated with an apostille or legalized by the Ministry of Foreign Affairs in the country of issuance. This process ensures that the document is legally recognized in Armenia.
Can a company in Armenia be set up with 100% foreign ownership?
Yes, a company in Armenia can be established with 100% foreign ownership. The ownership structure is flexible, allowing both individuals and other corporations as foreign owners without affecting the registration process.
Can I use a virtual business address for my company in Armenia?
No, using a virtual business address is not allowed for company registration in Armenia. You must provide a physical address for your business during the registration process.
Is there a specific share capital requirement for company registration in Armenia?
No, there is no requirement to deposit any share capital in a bank for company registration in Armenia. You do not need to contribute any initial funds to a company bank account to establish your business as a legal entity.
What documents are required to register a company in Armenia?
If you are registering the company as an individual, you need to provide a copy of your passport. This copy must be authenticated in the issuing country, either by apostille or legalization. Additionally, the passport copy should be translated into Armenian and notarized within Armenia to meet the legal requirements.
Is accounting and bookkeeping necessary for small and new businesses in Armenia?
Yes, accounting and bookkeeping are crucial for managing any business, including small and new businesses. Regardless of your company’s size or revenue, regular monthly reporting is required by law. Maintaining an organized accounting system helps ensure compliance and smooth business operations from the start.
What are the differences between sole entrepreneurship and company formation in Armenia?
When you register a company in Armenia, you create a separate legal entity. This means the company’s assets and liabilities are distinct from your personal assets. If the company faces financial troubles or legal issues, your personal assets are protected from company claims. In essence, your personal finances remain separate and unaffected by the company’s financial status.
In contrast, as a sole entrepreneur (individual entrepreneur), there is no legal distinction between your personal and business assets. You and your business are considered one entity under the law, which means you are personally liable for all business debts and legal obligations. This lack of separation exposes your personal assets to higher risks if your business encounters financial or legal problems. Operating as a sole entrepreneur involves a higher level of personal financial risk, as your personal property could be at stake.
How much does it cost to register a company in Armenia?
There are no state fees for registering a company in Armenia, meaning you do not have to pay any charges to state authorities during the registration process. Additionally, there is no mandatory requirement to deposit share capital, as there is no formal verification process for this payment.
For details about our legal service fees, please contact us directly. Once we understand your specific needs and requirements, we can provide a customized quote tailored to your situation.