Why do business in Armenia?

According to Forbes' Best Countries For Business List, 2008, published on 26 June, Armenia is the best country for business in CIS. Armenia ranks 63-rd among 121 countries, leaving behind all the CIS countries. For instance Georgia is 68th, Ukraine - 75th, Azerbaijan - 82nd, Russia - 86th. The raniking is based on the country's GDP growth, inflation and uneployment rates, the state of tax and customs systems and publications on human freedoms. For the details about Armenia's ranking in the Forbes' List, please click here.

According to the 2008 Index of Economic Freedom, a product of The Heritage Foundation and Wall Street Journal, the Republic of Armenia is in the 28-th place with an index of 70.3 percent. This means that Armenia is in the range of “mostly free” countries. It is an apparent example of the success that Armenia, a member of the World Trade Organizations since 2003, has reached through its economic policies and reforming the relevant legislation. This is the best index of all former Soviet countries, even better that several Eastern and Western European countries. For instance Georgia has 69.2, Azerbaijan – 55.3, Iran  - 44.0, Russia – 49.9, France – 65.4, Spain – 69.7, Austria – 70.0.The complete list of the countries can be found at http://www.heritage.org/research/features/index/countries.cfm.

INCENTIVES for doing business in Armenia:

• Access to CIS and Middle East Markets
• Political and Economic Stability
• Favorable Investment Legislation
• Investment Guarantees
• Strong Government Commitment to FDI Attraction
• Well Educated, Skilled, Cost-Efficient and EasilyTrainable Workforce with strong Science Based Skills
• No Limitation on Foreign Ownership
• No Export Duty
• No Restrictions on Staff Recruitment Competitive Energy Cost
• No Restrictions on Remittances
• Foreign Exchange Free Conversion
• Free Repatriation of Profit
• Corporate Tax Holidays
• Stable Local Currency

Armenia's investment and trade policies are considered by international organizations to be the most open in the CIS. Foreign companies are encouraged to invest and are entitled by law to the same treatment as local companies, moreover they have certain advantages. Armenia's investment climate is continuously improving with a strong government commitment to attracting FDI, including refining the legislative framework.

The Law on Foreign Investment, adopted in July 1994, regulates foreign investment in Armenia. It provides guarantees to foreign investors and protects investors from changes in the business related laws for 5 years.

Foreign investors can make investments in Armenia through the establishment of fully foreign-owned companies (including representations, affiliates, and branches), the purchase of existing companies and securities, or the establishment of joint ventures. There are no limitations on the volume and type of foreign ownership, the number of foreign employees, and access to financial sources. Although foreigners can only lease land, a company registered by a foreigner as an Armenian business entity does have the right to buy land. Foreigners may obtain permission to use land under long-term leases, and concessions for the use of Armenian natural resources with the participation of an Armenian company.

A state registration has to be obtained for starting a business in Armenia. It takes about a week to register a company.

REGISTRATION REQUIREMENTS

To start a business in Armenia, it is required to register with a number of state bodies, including:

• Agency of State Register of the Ministry of Justice,
• Agency of Intellectual Property of the Ministry of Trade and Economic Development,
• State Tax Service,
• State Fund for Social Insurance of the Ministry of Welfare and Social Affairs
• National Statistical Service.

The permission for the seal has to be obtained from the Police of RA and the seal has to be prepared by the "Seal" Closed Joined Stock Company.

BUSINESS SUPPORT COUNCIL

To provide an effective mechanism for monitoring the improvement in the investment climate, the Business Support Council (BSC) was established by a Presidential Decree in early 2001. Armenian Development Agency was appointed the secretariat to act as an intermediary for the business community. Chaired by the Prime Minister, the evenly balanced private/state membership (the Chief Economic Adviser to the President, the Ministers of Trade and Economic Development, Finance and Economy, the Mayor of Yerevan, the Executive Director of ADA - as the executive secretary of the Council, and six representatives from  the business community on a rotation basis) represents a powerful and influential vehicle to improve the business and investment environment and eliminate administrative barriers to investment. 

Armenian Development Agency

The Armenian Development Agency (ADA) was established in 1998 by the Government of the Republic of Armenia to facilitate foreign direct investments and promote exports.

ADA acts as "one-stop shop" agency for investors assisting them in setting up their business in Armenia, helping in project implementation, performing a liaison role with the Government, providing information on investment opportunities in the country, as well as investment related regulations and laws. In it's export promotion activities ADA helps to find markets for products, undertakes market studies and seeks out partners for joint ventures aimed at increasing the volume of exports and development of Armenian enterprises. ADA also organizes international conferences, business-forums, trade fairs and exhibitions.

The Armenian Government considers ADA as the main national intermediary for bridging gaps between policy development and implementation and the public and private sectors. The Chairman of the Board of ADA is the Prime Minister of the Republic of Armenia.

ADA coordinates the work of the Secretariat of the Business Support Council of the Republic of Armenia , which provides an effective mechanism to channel issue of concerns in the Business Community to the Government, and the Secretariat of the IT Development Support Council of the Republic of Armenia.

ADA cooperates with many international organizations such as World Bank, Multilateral Investment Guarantee Agency (MIGA), UN Development Programme (UNDP), USAID, Development Alternatives Inc. (DAI) and others.

  Below is a list of the functions and services that ADA offers:

• Pre-
• Investment services;
• Airport-to-airport services;
• Facilitation for entry and exit visas;
• Organizing business trips to and from Armenia;
• Accommodation;
• Transportation services;
• Logistic and administrative services;
• Office space;
• Meeting rooms;
• Translation/interpretation;
• Meeting arrangements;
• Site visits;
• Information provision;
• Consulting services;
• Facilitation for notary services;
• Aftercare services;
• General counseling and facilitation;
• Facilitation for company registration;
• Event management.

For further information on Armenian Development Agency please visit: http://www.ada.am.