Table of Contents

1. Benefits of Registering a Company in Armenia

Swift and Effortless Registration: Armenia offers ultra-fast, one-day registration for businesses with sample documents, while customized or remote registrations take just one to three business days. A registration certificate with a taxpayer ID number is swiftly provided, enabling immediate operations.

Affordable Setup and Maintenance: With no minimum capital requirements and an option for a nominal paid-up capital of $1, Armenia ensures cost-effective registration. No government fees accompany company registration or renewal, eliminating recurring reporting costs. Inactive entities are exempt from taxes and tax filings, while obligations like office rental, local hires, or compulsory bank accounts are non-existent.

Foreign Ownership Freedom: Armenia welcomes foreign ownership without constraints. Full ownership can be held by foreigners, exempt from local partnerships or agents. Citizenship or residency of shareholders poses no limitations. Non-resident directors and employees, even sole foreign directors, can manage and wholly own companies without local presence mandates.

Residence and Citizenship Avenues: Operating or owning an Armenian company can open paths to various residency statuses for you and your family. Three years of residency under general naturalization rules can lead to Armenian citizenship eligibility.

Advantageous Tax Regime: Micro-businesses, IT startups, entities in economic or industrial zones, and more qualify for zero-tax status. Companies with annual sales of less than 115 million drams (approx. $299,000) incur sales (turnover) tax of 1.5-5%. Dividend taxation at 5% is flexible due to numerous double-tax treaties, while capital gains on asset sales remain untaxed. Additionally, gifts, inheritance, net worth, and insurance/pension payments incur no taxes.

Privacy and Credibility: Selecting the right corporate structures or using nominee services is possible for ownership privacy. Armenian bank secrecy is law-protected and disclosing it is a crime. As of 2022, Armenia does not participate in CRS automatic exchange of information (AEOI). Armenia does not appear on any list of offshore jurisdictions, lending to its positive image and credibility. The country has an up to date anti-money laundering legislation, and the Central Bank has ensured the safety, stability and good reputation of the banking system.

Skilled Workforce and Low Labor Costs: Armenia offers a highly educated, skilled workforce with a 99.7% adult literacy rate. Multilingual universities contribute to a qualified labor pool. The minimum monthly wage stands at $195, while the national average is approximately $690.

Economic Growth, Integration, and Diaspora: In 2022, Armenia's GDP grew by 12.6%. Membership in the Eurasian Economic Union (EAEU), WTO, and free-trade agreements with CIS countries, Canada, Japan, Norway, and Switzerland position Armenia favorably. The global Armenian diaspora, numbering 7 million, enriches the country's resources.

Investment-Friendly Environment: Armenia ensures free repatriation of capital and profits, allows foreign land ownership, and encourages investments through tax incentives and government aid programs. Extensive double taxation and foreign investment protection agreements strengthen Armenia's investment appeal.

2. Corporate Forms

Choosing the appropriate business structure entails a comprehensive assessment of both tax and non-tax considerations. These encompass factors like limited liability, establishment and maintenance costs, confidentiality, number of shareholders, managerial framework, and exit strategies.

Engaging in unregistered business operations, known as illegal entrepreneurship, carries significant tax and criminal implications in Armenia. If you're unsure about whether your business activities necessitate registration in Armenia, it's advisable to consult with professionals who can provide expert guidance.

3. Subsidiary, Branch Office, Representative Office

Choosing the appropriate business structure entails a comprehensive assessment of both tax and non-tax considerations. These encompass factors like limited liability, establishment and maintenance costs, confidentiality, number of shareholders, managerial framework, and exit strategies.

1. Branch Office (BO): A branch office is a territorial division of a foreign enterprise operating within Armenia. It doesn't exist as a separate legal entity but rather serves as an extension of the foreign company. For proper functioning, branch offices established in Armenia need to undergo registration with the State Registry and obtain a taxpayer identification number.

2. Subsidiary: A subsidiary involves the establishment of a locally registered company (LLC or JSC) that is either fully or partially owned by a foreign corporation. All aspects of corporate operation are governed by Armenian law. Importantly, the limited liability structure ensures that creditors of the subsidiary cannot lay claim to the assets of foreign shareholders.

3. Representative Office: A representative office, akin to a branch office, functions with the key distinction that it cannot conduct business activities. Rather, its purpose is confined to representing the interests of the foreign entity within Armenia. Operating a representative office mandates registration with the State Registry and acquisition of a taxpayer identification number.

4. Permanent Establishment: The concept of a permanent establishment revolves primarily around taxation. It materializes when a foreign company maintains a significant business presence within Armenia. The decision to establish a permanent presence is predominantly driven by tax considerations. The Tax Office oversees the registration of permanent establishments and issues corresponding taxpayer identification numbers.

4. Employer of Record

When the central goal of establishing a business presence in Armenia revolves around employing local staff, you have the option to explore employer of record services as a viable alternative. This solution offers potential benefits, encompassing cost efficiencies and the mitigation of compliance-related uncertainties. Typically encompassing an array of provisions, such services span the spectrum from recruitment and onboarding to orchestrating local payroll, tax submissions, salary disbursements, and the administration of employee benefits.

5. Business Registration Process

Registration Process: The seamless establishment of companies and necessary corporate modifications is registered through the State Registry of Legal Entities under the Armenian Ministry of Justice. A physical presence before the Registry isn't mandatory, as authorized lawyers can handle the administrative procedures by filing requisite registration documents using a power of attorney. Following company registration, the logical next steps encompass ordering a corporate rubber stamp and submitting statements to the tax office.

Timeline: The registration typically takes only one business day after the registration documents are submitted. It's important to note that certain registrations tied to branch offices and non-profit entities might entail longer durations.

Documents: While document prerequisites may slightly differ based on specific scenarios, in general, individual shareholders and directors should furnish original or legalized copies (Apostille or consular legalization) of their passports. Corporate shareholders and directors must provide legalized copies of pertinent corporate documents – including the certificate of registration and articles of incorporation. These originals or legalized copies are required for subsequent notarized translation into the Armenian language.

Cost: Incorporation expenses consist of governmental fees, legal charges, and other costs, like fees for translation, corporate stamps, and mailing services.

6. Key Registration Requirements and Considerations

7. Compliance Requirements

In Armenia, obtaining a general business license typically marks the starting point for launching your business. This comprehensive license is usually adequate to kickstart your operations. However, specific industries may necessitate supplementary licenses at both the national and local levels. Notably, certain situations may merely call for formal notifications, streamlining the licensing process.

8. Corporate Changes and Dissolution

Corporate Amendments: Effecting changes within a company's framework involves registering these amendments with the State Registry. Alterations connected to the company's name, statutory capital, address, or executive directorship necessitate amendments to the articles of association. For Limited Liability Companies (LLCs), modifications in shareholding must also be registered. Typically, documents submitted undergo verification and registration within a two-day span. An expedited registration option exists through fast-track service fees for urgent cases (refer to the provided table for details).

Dissolution Guidelines: Dissolving a company mandates the announcement of dissolution on the official website www.azdarar.am. This step notifies creditors, affording them a two-month window to submit their claims. The tax office, on the other hand, is granted 20 days for unpaid tax claims, often following a tax audit. Company dissolution is accompanied by collaboration with the National Archive for document archiving and coordination with the Police to surrender the company's stamp.

As an alternative to dissolution, a company can file a declaration with the tax office, indicating its inactive status. Inactive (dormant) companies remain registered but are exempt from tax return filings and tax payments.

Reorganization: Reorganizing a company may encompass mergers, spin-offs, split-offs, or alterations in corporate structure, such as transitioning from an LLC to a Joint-Stock Company (JSC) or vice versa. Public notifications are mandatory as part of the reorganization process, serving to inform potential creditors.

Both dissolution and corporate amendments can be executed remotely by your authorized lawyer or representative, equipped with the necessary power of attorney.

9. Armenia in International Rankings