Starting a business in Armenia
Being an entrepreneur in Armenia has financial and legal benefits as the country currently has a transitional economy.
By relocating business activities or branches of a non-resident start-up company to Armenia, companies will have the possibility to offer their goods or services in a new market. Moreover, companies will acquire new clients and partners, diversify their business risks, and so on.
Concerning the legal advantages, Armenia guarantees the freedom of economic activities and competition. Therefore, each person has the right to conduct such business activities, which are not prohibited by the laws of Armenia.
The Armenian legislation allows registering various legal entities, including for-profit (commercial) and non-for-profit organizations, as well as individual entrepreneurs.
Armenian tax code provides various tax privileges for different types of businesses.
Armenia stands out also with its secure and flexible banking system. The country hosts 17 banks registered by the Central Bank of Armenia, which provide various banking services, particularly loans, money transfers, issues bonds, deposits and so on.
Key takeaways
The advantages of doing business in RA are due to free economic relations, flexible banking and tax systems, and simplified company registration procedures.
Key benefits of setting up a business in Armenia in 2024
Armenia has been becoming a hotspot for entrepreneurial companies, offering broad and profitable prospects for investors in 2024. Despite being the smallest country in the Caucasus region, it's fascinating to learn that 90% of venture capital in the South Caucasus was invested in Armenia in 2023.
One of the reasons for Armenia's success is its thriving information technology sector, which is recording an annual income growth rate of about 20%. This sector offers a range of opportunities for investors, from software development and data processing to artificial intelligence and cybersecurity. Furthermore, the government of Armenia has been actively supporting the growth of this sector through initiatives such as the "Armenia Engineering City" project, which will establish a technology hub in Yerevan, offering tax incentives, co-working spaces, and funding opportunities for startups.
It's not just local companies that are taking advantage of Armenia's IT sector growth. Since 2022, over 500 Russian companies operating in the IT sector have moved or opened their representative offices in Armenia, drawn by its favorable business environment, skilled workforce, and low operational costs.
With Armenia's impressive 10.5% economic growth recorded in 2023 and the above circumstances, it's safe to say that Armenia has entered a period of rapid economic development, opening up ample opportunities for both local and foreign investors and entrepreneurs. The country's strategic location, well-educated workforce, and favorable business climate make it an ideal destination for companies seeking to expand their operations in the Caucasus region and beyond.
In the light of the current geopolitical situation, vast non-resident companies can execute vital money transfers through Armenian banks. The expenses for preserving these kinds of companies are significantly low as they essentially don't accomplish business activities. However, the company has to appoint a CEO who will submit tax reports, pay taxes, tackle possible issues with the banks and, so forth.
The difference with the vast number of countries is that non-residents can own 100% of stocks in registered companies in Armenia. A non-resident can also appoint a CEO of that company. The next advantage is that non-resident CEO who doesn’t have desire to live constantly in Armenia is entitled, without work permission and residency card, to remain as CEO and accomplish obligations remotely. Nonetheless, if non-resident CEOs want to stay and work in Armenia, they have to get a work permit or conclusion corresponding to a list of exceptions to getting work permission and residency card. (For more detailed information on legal services for getting work permission, follow this link) (For more detailed information on legal services for getting a residency card, follow this link).With the same logic, other company employees can also be non-residents entitled live and work either in Armenia or remotely.
In the light of those mentioned earlier, it is worthy of highlighting other legal and financial benefits which substantiate why to give a preference to Armenia when running a business.
First and foremost, there are no minimum requirements for capital as nobody checks the fulfilment of capital during the procedure of companies' registration. Additionally, for registering the company, there are no mandatory state fees.
The following legal benefit is company registration shall be done within 1 day if the founder/s or their representatives (the power of attorneys which non-resident individuals and companies provide shall be approved by apostille as only in this case Armenian notary will verify their translation) are
in Armenia,
they are citizens of Armenia, or
their passports are translated into Armenian (verified by a notary),
and they choose the samples of ordinary documents (charter and the decision of the founder or the minutes of the founders’ meeting) offered by the Ministry of Justice of RA(via:https://www.moj.am/page/551).
Moreover, the serial number of a taxpayer (Tax Number) in each case is provided during the company registration, and there is no need to visit the authority to get it. Concerning the tax system, it is significant flexible.
With an aim to extend international investment in Armenia, Armenian legislation also provides opportunities for companies' re-domiciliation. The aim is that the shareholders who don't feel convenient regard with the requirements of Armenian legislation however, want to continue their business activity in Armenia, can substitute the company's “Individual Law” and adjust their national or another country's laws which requirements are familiar. In the same logical way, the company which aims instead of company’s “Individual Law” it’s inner relation are regulated under Armenian legislation requirements, they are entitled through re-domiciliation substitute their “Individual Law” into Armenian law.
Key takeaways
Unlike a large number of countries, 100% of the shares of a company registered in Armenia can be owned by a foreigner, and company registration can take only 1 day.
Unique economic advantages of Armenia
Armenia is considered to be a bridge between northern and southern countries. It is not surprising that the construction of the north-south road continues, and the whole route will be ready for exploitation by the end of the year. It is a superb opportunity to transfer, export, or import goods, products, and raw material.
Doing business in Armenia is more profitable as the business field has not reached the top of its development. In the market are not being offered various services and goods available in other countries, and local entrepreneurs have not gotten to the top of advancement. It means they don't have a dominant role in the market, as well compared to the other countries' mid salaries and estates are low. Shifting from the social form to the capitalist structure and economy of Armenia on the road of its development. Therefore, running a business project in a transitional economy already benefits developing businesses.
From 2nd January 2015, Armenia has been a member of the Eurasian Economic Commission (EEU), providing many attractive opportunities.
Key takeaways
Doing business in Armenia is more profitable, because the business environment has not yet reached the peak of its development, the market does not offer various types of products and services that are available in other countries.
Different types of companies in Armenia
Form of various types of Legal Entity in Armenia:
Commercial (Having an aim to get a profit) | Non-commercial (Without a purpose to get a profit) |
Limited Liability Company (LLC) | Non-government organization (NGO) |
External Liability Company (ELC) | Funds |
Joint-Stock Company either: Closed or Opened (OJSC and CJSC) |
The most common types of incorporation are Limited Liability Company (LLC) and Closed or Opened Joint-Stock Company (OJSC and CJSC). In contrast to a Joint-Stock Company, managing LLC is much easier as the legal requirements are soft.
Instead of registering a company, individuals are entitled to register as sole entrepreneurs. After registering as solo entrepreneurs, they are entitled to run business activities without having a company.
Key takeaways
Unlike joint-stock companies, LLCs are easier to manage, as the legal requirements for them are softer.