Country GuideArmenia

From Global Connections

Armenia received foreign direct investment (FDI) inflows of AMD70.4 billion in 2015. The largest sources of foreign investment were Russia, Switzerland and Luxembourg. The largest share of foreign investment was in the mining industry.

Armenia ranked 35th in the World Bank's 2016 Doing Business rankings, up three places from 38th in the year prior. The rankings recognised a number of reforms enacted by the country to make doing business easier. Armenia reduced the time and cost for documentary and border compliance for trade with the Russian Federation by joining the Eurasian Economic Union. Armenia also made enforcing contracts easier through a new law requiring that cases be assigned to judges randomly and through a fully automated system. Dealing with construction permits was made easier by exempting lower-risk projects from requirements for approval of the architectural drawings by an independent expert and for technical supervision of the construction.

Key facts about starting a business in Armenia:

  • It takes two procedures and approximately three days to start a new business in Armenia; this process is detailed in the Doing Business in chapter
  • In 2015, the minimum monthly wage was set at AMD55,000; employment regulations are discussed in detail in the Labour chapter
  • Requesting and obtaining a building permit takes approximately 15 days and costs AMD350,000
  • All Armenian incorporated entities must prepare statutory financial statements in accordance with the International Financial Reporting Standards (IFRS); further details can be found in the Audit chapter
  • Companies that wish to list securities on the NASDAQ OMX Armenia must, amongst other requirements, have been operating for no less than three years; capital markets are discussed in the Finance chapter

Armenia's attractiveness as an investment location can be attributed to a number of factors, including its strong economic growth and strategic location between Europe and Asia. Nevertheless, in order to make an informed decision, it is critical to understand the nuances of any local regime. The manner in which people conduct business in Armenia may differ from the home countries of investors. Furthermore, variations on these distinctions may exist depending on the region and the industry in which a company operates.

Armenia's official language is Armenian. Russian is also widely spoken. Business attire is smart and conservative. A handshake is the typical business greeting and will be used at the beginning and end of a meeting. Punctuality is valued in Armenia. There are no specific protocols for the exchange of business cards.

Those looking to establish a business in Armenia may look across the region for alternative options. However, Armenia can be differentiated on the following factors:

  • A developing economy offering a number of opportunities for foreign investors
  • The Armenian Law on Foreign Investments provides protections for foreign investors, including equal treatment and freedom to repatriate profits
  • Armenia has a low corporate tax rate at 20 per cent; this is further detailed in the Tax chapter
  • The European Bank for Reconstruction and Development invested USD140 million in Armenia's infrastructure in 2015; an overview of the country's current infrastructure can be found in the Infrastructure chapter
  • The Armenian government offers a number of incentives to foreign investors, such as an exemption from export duty; discussed further in the Trade chapter

While there are significant opportunities for investment in Armenia, a number of challenges remain. All goods must be imported/exported via Georgia or Iran due to the blockades imposed by Turkey and Azerbaijan. As a result, transportation costs are high.

This guide has been developed to provide businesses with an overview of Armenia, its legal regime, start-up and market entry considerations, tax and customs requirements and a general summary of the factors that may affect the decision to do business in Armenia. However, the information contained in this document is generic in nature and you should not act or rely on it without obtaining specific professional advice.

Please note that the Country Guides may only be available in English.

Useful Links

1 State Register of the Legal Entities
2 Tax Service of Republic of Armenia
3 Armenia Customs
4 Intellectual Property Agency
5 Ministry of Foreign Affairs
6 Ministry of Labour and Social Affairs

 

Sources

1 FDI Statistics
2 Doing Business Rankings
3 European Bank for Reconstruction and Development Investment

 

Download Country Guide - Armenia (1.01MB, PDF)

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This document is issued by HSBC Bank Armenia cjsc (the Bank). This guide is a joint project with Grant Thornton. It is not intended as an offer or solicitation for business to anyone in any jurisdiction. It is not intended for distribution to anyone located in or resident in jurisdictions which restrict the distribution of this document. It shall not be copied, reproduced, transmitted or further distributed by any recipient. The information contained in this document is of a general nature only. It is not meant to be comprehensive and does not constitute financial, legal, tax or other professional advice. You should not act upon the information contained in this document without obtaining specific professional advice. Whilst every care has been taken in preparing this document, the Bank and Grant Thornton makes no guarantee, representation or warranty (express or implied) as to its accuracy or completeness, and under no circumstances will the Bank or Grant Thornton be liable for any loss caused by reliance on any opinion or statement made in this document. Except as specifically indicated, the expressions of opinion are those of the Bank and are subject to change without notice. The materials contained in this document were assembled in January 2016 and were based on the law enforceable and information available at that time.

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