Armenia is a small Asian country with a unique culture and a favorable business environment. Therefore, the jurisdiction is interested in attracting foreign capital, manifested, for example, through the simplified procedure of business registration and the availability of free economic zones. In addition, the jurisdiction may interest business people because of the following potential benefits.
Advantages of jurisdiction
If you intend to start a business registration in Armenia, the decision is potentially advantageous due to the following advantages offered by the country:
- favorable geographic location (Armenia is adjacent to Georgia, Azerbaijan, and Turkey);
- openness to European and Asian markets;
- ease of starting a new business;
- absence of requirements for the size of charter capital;
- well-developed industry, agriculture, and construction;
- no requirements for the presence of residents in the company;
- provision of tax incentives.
Forms of legal presence and doing business
The establishment of a business in Armenia is possible in one of several forms:
- A Limited Liability Company is the most flexible option to open a business in Armenia, in which the company participants are not liable beyond the amount of funds they have invested. Nevertheless, there are certain restrictions for the transfer of shares of the company, and such limits should be fixed in its constituent documents. There are no requirements for the amount of the charter capital. Even one participant can establish an LLC. A company of this type must also have one director of any residency. LLC must comply with pretty simple rules of accounting and reporting.
- A joint-stock company is a legal entity that allows you to open a business in Armenia to issue and subscribe for shares. JSC can be of open or closed type. In an open JSC, shares can be offered to third parties and alienated without limitation. The number of participants is unlimited. In a closed JSC, shares are placed only among shareholders, and public offering to third parties is prohibited. There can be no more than 50 shareholders in a closed JSC. The amount of the authorized capital of JSC varies from 100 to 1000 minimum wages.
- A branch is a variant of doing business under which a foreign company is allowed to conduct the same activities in Armenia as abroad. Registration of a branch is required. The option is beneficial because it will enable testing the advantages of the jurisdiction before opening a company in Armenia by investing large sums of money.
- A representative office is a legal presence in which a foreign legal entity is prohibited from doing business. But it can analyze local markets, as well as promotional work. Registration of the representative office is required.
Company registration procedure
If you plan to open a company in Armenia, you can implement the business idea by going through the following steps:
- Determination of clear business priorities and selection of the most appropriate legal form.
- Collecting the documents and data required to register a new legal entity.
- Search and registration of a legal address for the new company.
- Drawing up registration and constituent documents.
- Preparation and filing of documents for review.
- Registration for tax and social insurance purposes.
- Opening of bank accounts for the new Armenian company.
- Obtaining additional permits and licenses.
Provide input on your business case for more detailed advice and to develop a customized enrollment plan.
Legislation and regulatory environment
Armenia's legal system is a continental law system. Foreigners and residents have equal rights to register Armenian companies and conduct business. Moreover, local legislation allows the establishment of legal entities without the participation of local citizens - foreigners may own 100% of the share capital. Sometimes it is possible to establish a company and open a bank account remotely.
Armenia's tax system
If you plan to open a company in Armenia, the decision should be evaluated along with the following parameters of the local tax system:
- Corporate tax - 18%
- PIT - 21%
- VAT - 20%
- (1) Dividends tax - 5% (2) Interest - 10% (3) Royalties - 10%
- Capital Gains Tax - (1) corporate - see corporate tax (2) individual - 10% to 20%, depending on the type of income and also on the taxpayer.
You can provide Prifinance lawyers with preliminary transaction volumes for more detailed calculations and tax planning suggestions.
How Prifinance lawyers can assist
If you plan to open a company in Armenia, the lawyers of Prifinance are ready to accompany the process of implementing a business decision at all stages, including:
- to analyze the situation and develop the most acceptable options for entering the Armenian market;
- collect all the necessary data and documents;
- hold meetings of the founders, as well as draw up all the documents required to establish a legal entity;
- pay all the required registration fees;
- prepare and submit the package of registration documents;
- open bank accounts for the future Armenian company;
- to accompany all the issues during the operation of the new company in Armenia, including all the necessary negotiations with the representatives of the local authorities.
Provide information and a list of your business objectives for more detailed advice and suggestions.