Entrepreneurship in Armenia

• Private Entrepreneur (PE)

• Limited Liability Company (LLC)

• Joint-Stock Company (JSC)

• Closed Joint-Stock Company (CJSC)

• Partnership

• Cooperative

• Branch Office

• Subsidiary

• Non-Profit Organization

• Private Equity Fund

Differences in Company Formation

LLC

An LLC, or limited liability company, are generally SMEs in Armenia. There are no minimum share capitals needed, shareholders are liable to the extent of their investments only, at least one investor must be included, and shareholder meetings should occur annually at a previously specified time, but which can occur remotely, with written votes. The manager need not be a shareholder or of Armenian citizenship, while a board of directors is optional. A shareholder can withdraw from the company at any time and receive the value for the share owned. If the manager of the company is a foreigner who will stay in Armenia for longer than the visa allows, a temporary residency should be obtained. One can work with a regular visa without a work permit, but only so long as the visa allowance, and not a day more. In such cases, residency, temporary or permanent, must be filed for.

JSC

While a JSC, or joint-stock company, is similar to an LLC in how it functions in Armenia, though there are certain differences in the details of ownership, exit strategy and management. The share capital can be represented by common or preferred, voting or non-voting shares, at least one investor is necessary, with the shareholders liable to the extent of their contributions only, while a meeting done annually can occur anywhere in the world and be represented by a proxy. In companies with 50+ shareholders, a board of directors including at least 3 persons is required. In both the case of an LLC and JSC, an annual account is necessary, including an annual report, the balance sheets and profit/loss accounting, all approved at the shareholder meeting within 6 months from the end of the fiscal year. Publicly traded companies have separate laws in terms of annual accounting, while larger companies with a turnover exceeding 1 billion AMD have certain added filing and publishing requirements. Contributions outside of cash must be assessed by an external auditor, and in the event of an OJSC, shares can freely be sold to third parties.

Note: Corporation are required by law to add the type of company at the end of the name, such as LLC, LTD, CJSC, OJSC, etc. They cannot contain the words “bank” or “insurance” without proper state licensing, nor can they include “Armenia” or “Armenian” in the name without government approval.

Note: Owning or managing an operational company in Armenia will generally qualify you and your family for a residency status. It may also become a basis for citizenship by exception through a direct petition sent to the Prime Minister of the RA. Three years of residency generally makes one eligible for citizenship. 

For more information and to compare each form, click here. 

Currently, Armenia is seeing growing opportunities to work with Iran, China, India, and Southeast Asia. As a member of the Eurasian Economic Union (EEU), Armenia has free access to Russia, Kazakhstan, Kyrgyz Republic, and Belarus. Free Trade agreements also exist with Ukraine, Moldova, Tajikistan, Turkmenistan, and Georgia. 

Armenia is also the only CIS country to enjoy the “GSP+” arrangement with the European Union, allowing the export of over 7000 products with reduced or no tariffs. A GSP agreement also exists with the US, Canada, Japan, Norway, and Switzerland. 

You will need certain things before getting ready to register your company:

• Passport - original and Armenian notarized translation

• Local phone number (cell phones work, as well)

• Local address (not your rental home to prevent any problems) - it is recommended to use a company providing virtual offices if you don’t have a physical one. Refer to armenian-lawyer.com or bridgingnations.am. 

In general, there are 3 main steps to opening a business in Armenia:

• Register your company

• Create a company seal

• Open a corporate bank account

Here you can find a step-by-step guide on how to open a business according to various corporate forms. 

Procedure and Costs of Company Formation in Armenia

Start with company registration at the State Register for Legal Entities in Yerevan. It has no associated costs and the Business Entry One-Stop Shop was launched within the Ministry of Justice in 2011. Name reservations, business registration and tax identification numbers are all issued here. The TIN is issued by the State Registrar. Maximum amount of time this all can take is 3 business days.

Electronic registration is also available at www.e-register.am/am/ and is gaining in popularity, but you require an electronic signature. The site also allows you to do a company search by name or person. There are no fees to open an LLC or JSC, unless it is a non-profit organization or a company branch.

In order to register the company, the information necessary includes:

Applicants have a few documents that may be needed, though most all can be drawn up at the registration office.

- Name of the company
- List of partners or owners
- Manager of the company
- Registration address (no certificate of ownership or lease required- Must be Armenian)
- Amount of charter capital
- Registration form that includes information of shareholders and managers responsible
- Shareholder resolution, signed by all
- The charter of the company
- Confirmation payment of state overhead (a payment check or through e-payments.am)
- Personal information about the head of the executive body, including passport and social security ID
- Beneficial ownership certificate, certifying the beneficial owners of the company, to be disclosed to the Central Bank of Armenia.

Trademark the company name. In Armenia, you can choose any name for the company as long as it is not previously registered by the state. Trademarking adds an extra layer of legal protection to your brand. Follow by ordering a company seal, which can take up to 1 day and cost 8,000 AMD and up. This is not required by law. It is recommended to have an accountant to ensure your monthly reporting is done on time and in line with the local laws. The fewer mistakes on this front, the better for you.

Opening a Corporate Bank Account

Setting up a corporate account at the bank of your choice will take you a few hours to complete. Only the minimum number of documents are required, for the most part, but you’ll have to check with the bank in question to be sure. Normally the passports of the shareholders and directors should be enough. You will receive a registration certificate with the taxpayer ID number, ready for immediate operation.

Note: You will need a company seal to open an account, for the most part. 

Armenia’s banks offer a wide range of business-oriented services to foreigners as well as locals. You are able to open an account in most major foreign currencies, conduct international bank transfers, pick up a safety deposit box, use state of the art mobile banking, etc. Note: Not all banks will work with clients from Iran and Syria due to international restrictions. We recommend contacting different banks about your preferred business accounts. Most are quite flexible and willing to match another’s incentives to keep you to themselves. 

Shop around for the best bank for you. You will at least need your company seal, registration certificate (obtained from registration office once completed), notarized Armenian passport translation, and a local phone number. Certain banks might have a slew of other documents to present, however, so call or connect with them beforehand. 

Foreign Ownership

Foreigners may own 100% of the company without the need for local partnership. There are no citizenship restrictions applied to ownership or stakeholders. All employees can also be foreigners. There are no laws forcing a certain ratio to be local employees. A local address is also unnecessary. The foreigner may be the only director as well as the full owner of the company. 

Foreign Investment

An investor in Armenia is freely allowed to export their cash and profits made during their investment. Types of investment allowed in Armenia by foreigners, include:

• Foreign currency deposits

• Movable and immovable property

• Securities provided by the legislation of the RA

• Economic activities allowed by legislation

• Extraction of natural resources

• Acquisition of existing enterprises

• Opening of branches and representative offices of foreign legal entities

• Opening a foreign legal entity

• Acquisition of shares in existing companies in the RA

Government Incentives

Certain incentives for your business include:

• Up to 30% profit tax reduction for new jobs created for a period of 3 years

• VAT payments postponement for up to 3-year period for importing equipment and goods

• Profit tax privileges for large importers

• Reduced corporate tax for large exporters

• 0% VAT, corporate, property, customs duty taxes up to 10 years in Free Economic Zones: residents of Free Economic Zones (FEZ) are exempt from all taxes except the payroll taxes.

• 0% corporate tax, income tax and VAT in specific territories of Armenia

• Customs duty exemption for materials and equipment/technology

• Support for creation of startups by SME DNC

• Inactive (dormant) companies do not pay taxes or file tax returns

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  Newly registered businesses in the IT sector, including both companies and private entrepreneurs, have had the opportunity to apply for an IT Start-Up certificate. This certificate holds the potential to offer significant tax advantages, including a substantial reduction in payroll tax, lowering the rate of personal income tax withheld by the employer from the standard 20% to just 10% until December 31, 2024. Currently, the deadline for applications is November 1, 2024.

Note: This is only available to companies with under 30 employees, as well as those not considered subsidiaries or branch offices for foreign companies.