Every year, an increasing number of foreign businesses register in Armenia due to the country’s growing economy and favorable conditions. From March 2022 to February 2023, 2600 nonresident companies and 6000 nonresident individual entrepreneurs were registered in Armenia, according to the International Monetary Fund. Around 40% of the companies and 65% of entrepreneurs operate in the IT sector.
In this article, we delve into the reasons why businesses choose Armenia and highlight important aspects of the registration process.
Things to Know About Registering Your Business in Armenia
In Armenia, company registration is governed by the Law of State Registration of Legal Entities, adopted in 2011.
The most common types of companies are limited liability companies and joint-stock companies. Registering as a sole proprietorship is also an option. The application can be submitted by the founders, the director, or an authorized representative. You’ll need to provide an application, the founders’ decision, the company’s registration address, personal information about the executive, including their passport, and a Beneficial Ownership Certificate. As a legal person, you’ll have the same rights as nationals.
Below are 10 points to offer guidance if you’re considering starting your business in Armenia.
Registration of business in Armenia is fast and easy
Companies in Armenia are registered by the State Register Agency of Legal Entities of Armenia. Generally, the process takes a maximum of three days. If you decide to use sample documents, the registration can be done in minutes.
Official foreign documents need to be notarized and legalized. Once it’s done, you’ll get a registration certificate with a taxpayer ID number and be ready to start operating.
Remote registration is available on www.e-register.am. You can submit the documents with an electronic signature without a personal visit.
There is no minimum capital requirement
Small and medium-sized businesses can easily register as legal persons in Armenia without the need for a paid-up capital. This relieves the financial burden, boosts market competitiveness, and encourages many entrepreneurs to start a business in Armenia.
Business can be 100% foreign-owned
There are no limits on foreign ownership in Armenia and requirements to have a resident shareholder or manager. Similarly, there are no obligations to reside in the country, possess a local address, or hold citizenship.
Exceptions apply to specific industries with distinct shareholder requirements, including TV and Radio, Energy, finance, and gaming.
Tax Burden Is Low
A no-tax status is available for micro-businesses, IT startups, agricultural businesses, entities operating in free economic zones, industrial zones, some border towns and villages, etc. Small businesses have special tax regimes (1.5-5%). For investment projects, there are tax incentives and government assistance programs.
The standard corporate income tax (CIT) in Armenia is 18%. It applies to both Armenia-based and nonresident entities.
You can acquire Armenian residency on the basis of running a business in the country
You can apply for temporary or permanent residency in Armenia on the grounds of running a business. The residency status can facilitate access to banking services and property ownership rights.
Becoming a resident, you can sponsor extended family members. This status offers a five-year visa and the possibility to obtain citizenship in three years. Dual citizenship is allowed. Armenia doesn’t require residents to stay in the country.
Your business can hire talented, multilingual, and cost-effective workers
In Armenia, you can employ a well-educated, multilingual and cost-efficient workforce. According to the World Bank, the adult literacy rate in the country is above 99%. The official language of the nation is Armenian. Locals can widely speak English and Russian.
Employment relations in Armenia are regulated by the Labour Code. The minimum monthly wage is 75,000 Armenian dram (around $194 USD).
The Armenian government has an open-door policy for foreign investments
Armenia offers an investor-friendly environment with favorable conditions. The government provides different incentives, such as profit tax privileges and procedural support. Foreign investments in the country are regulated mainly by the Law “On Foreign Investments.” Investment permits are unnecessary, and companies can register by completing forms and procedures defined by the law.
Technology, Construction, Services and Trade-related Sectors Are Growing the Fastest
Armenia’s economic activity continues to be strong in 2023, driven by expansion in the IT sector, construction, service, and trade-related services.
Armenia is known for the rapid developments in the technology sector. Next to native startups are headquarters of multinational companies such as Cisco, Microsoft, IBM, Oracle, NVIDIA, and others.
Construction, transportation, hotel, and restaurant businesses are experiencing significant capital inflows due to the flourishing tourism income and remittances.
Priority sectors in the country include ICT, renewable energy, agriculture, jewelry, infrastructure, and textiles.
There are no export restrictions and taxes in Armenia
Armenia is a member of the Eurasian Economic Union together with Russia, Kazakhstan, Kyrgyzstan, and Belarus, which allows the movement of goods, services, people, and capital without any duties.
The country has an extended partnership with the European Union on the basis of which the import and export of goods are simplified, and transport costs are reduced.
There are no export taxes or registration requirements for exporters. All exports of goods from Armenia are subject to a simple customs declaration system. Exceptions are for some products that require prior State permission.
The main exports of the country are metals, diamonds, energy, beverages, and food. Imports include mining products, petroleum, oil products, natural gas, machinery, and equipment. You can learn more details on customs.am.
There are no restrictions on remittances
According to the Central Bank of Armenia, there’s no limit on currency exchange at market rates in the country. Armenian residents and foreigners can hold foreign currency accounts. Foreign exchange purchases and sales are carried out through parties licensed by the Central Bank.
Armenian banks serve international bank accounts. Similarly, residents can open accounts in international banks. Banks use the SWIFT system for transactions and provide diverse services such as lending, opening deposit accounts, conducting plastic card operations, and more.
Remittance of profits is unrestricted provided that applicable taxes have been paid to Armenia.
Registering Legal Entities in Armenia: A Streamlined Process
In Armenia, the State Register of Legal Entities under the Ministry of Justice oversees the registration of legal entities. This process has been made even more convenient with the introduction of electronic registration through the user-friendly e-Register website (https://www.e-register.am/en/).
Electronic Convenience: The advent of digitalization has revolutionized the registration of legal entities in Armenia. Through the e-Register website, entrepreneurs and founders can swiftly initiate and complete the registration process from the comfort of their homes or offices. This user-friendly platform provides step-by-step guidance, making the procedure accessible to both seasoned business professionals and newcomers.
