Armenia lies in the South Caucasus region of Eurasia, landlocked in the neighborhood with Turkey, Georgia, Iran, and Azerbaijan. In Armenia, architecture, music, arts, weaving, and many other art forms have deep historical roots. Armenia was the first country in the world to adopt Christianity as the religion of the state in the 4th century AD.
Armenia has witnessed its fair share of invasions, turmoil, and natural disasters during its long history. Today, Armenia is constantly coping with political and economic issues. However, despite all the instability, Armenia’s cultural and historical richness is intact, owing to the resilient people.
The official language of Armenia is Armenian; an Indo-European language that has its own unique dialect and alphabetical system. Russian is also spoken widely in Armenia
Types of business structures in Armenia
In Armenia, there are several types of business structures available for entrepreneurs to choose from, depending on their goals, needs, and preferences.
Here are some of the most common types of business structures in Armenia:
| S# | Type of business structure | Local name | Min. paid-up capital required |
| 1. | Sole Proprietorship | Anhat anjnanagir | No paid-up capital required |
| 2. | Limited Liability Company | Sahmanakan kzmakertutyun | $1 |
| 3. | Joint Stock Company | Bazhnic hanvac ynkeryutyun | $12,000 |
| 4. | Partnership | Gorcalutyun | No paid-up capital required |
Sole Proprietorship
A sole proprietorship structure is run and managed by a single natural person. It’s a simple business model that does not require a lot of paperwork, large investment, or a team to operate. The downside is that the owner is personally liable for all debts and obligations of the business.
Limited Liability Company (LLC)
An LLC is a separate legal entity from its owners, who are not personally liable for the company’s debts and obligations. This type of business structure is popular among small and medium-sized businesses.
Joint Stock Company (JSC)
A JSC is a type of business structure in which the company’s capital is divided into shares that can be bought and sold by investors. JSCs are subject to more stringent regulations and requirements than LLCs.
Partnership
A partnership is a business structure in which two or more individuals share ownership and management of the business. There are two main types of partnerships in Armenia: general partnerships and limited partnerships.
Cost of registering and incorporating a company in Armenia
Registering a company in Armenia can prove to be a complex process; especially for foreign investors. Seeking assistance from local professionals may be necessary at some point. However, it is important to know the major costs involved in the process beforehand.
Limited Liability Company (LLC)
The estimated cost of registering an LLC in Armenia is around $240 to $300, including the state registration fee, legal fees, and notarization costs. Additional costs may be incurred for translation and other services.
Joint Stock Company (JSC)
The estimated cost of registering a JSC in Armenia is approximately $1,000 to $1,200, which includes the state registration fee, legal fees, notarization costs, and other expenses such as stamp duties and translation costs.
Sole Proprietorship
The estimated cost of registering a sole proprietorship in Armenia is around $140 to $200 including the state registration fee, legal fees, and notarization costs.
Partnership
The estimated cost of registering a partnership in Armenia is similar to that of registering a sole proprietorship, i.e., $140 to $200.
Cost of doing business in Armenia
The recurring costs of a company are referred to as operational expenses. Operational expenditures are an integral part of the budgeting process. Here are a few expenditures that may be accounted for.
Taxes
Armenia has a flat corporate income tax rate of 20%, which applies to both resident and non-resident companies. There are also other taxes such as value-added tax (VAT) which is 20%, social security contributions, and personal income tax. Businesses may also be subject to customs duties and other fees depending on the type of goods and services they offer.
Labor Costs
The cost of labor in Armenia is relatively low compared to many other countries. The minimum wage (blue-collar workers) in Armenia is approximately $130 per month, and the average monthly salary (white-collar employees) is around $490 per month.
Utilities
The cost of utilities such as electricity, water, and gas are generally low in Armenia compared to many other countries. However, the cost may vary depending on the location and the size of the business.
Property rent and ownership
The cost of renting or buying commercial property in Armenia can vary depending on the location and the size of the property. In general, real estate prices in Armenia are lower than in many other countries.
Regulatory Compliance
Businesses in Armenia may also incur costs related to regulatory compliance such as accounting and auditing fees, legal fees, and other compliance-related costs.
It’s important to note that the actual cost of doing business in Armenia may vary depending on the specific circumstances of the business.
Advantages of having a company in Armenia
Armenia offers a number of strategic benefits to investors; especially foreign companies. Some benefits pertain to the strategic location while others are a result of the government’s policies to propel business.
Here are a few major advantages a company may enjoy:
Strategic Location
Armenia is strategically located between Europe and Asia, providing businesses with access to various markets. It also has a favorable business environment with a skilled workforce, low labor costs, and modern infrastructure.
Ease of doing business
Armenia has implemented various reforms to improve the ease of doing business, such as simplifying the registration process and reducing the time and costs associated with starting and running a business. Armenia is also ranked relatively high in the World Bank’s Ease of Doing Business rankings.
Access to international markets
Armenia is a member of the Eurasian Economic Union (EAEU) and has free trade agreements with various countries, providing businesses with access to a large market. Armenia also has preferential trade agreements with the European Union (EU) and the United States, which can provide businesses with additional opportunities.
Skilled workforce
Armenia has a highly educated and skilled workforce, with a strong focus on science, technology, engineering, and mathematics (STEM) education. Many businesses in Armenia specialize in high-tech industries such as IT, electronics, and pharmaceuticals.
