IT Legislation
Armenia has maintained its competitive advantage in technology development as a known hub for software development, industrial computing, electronics, and production of semiconductors. The sector has remained significant in the Armenian economy due to a competitive labor force, its share of GDP, constant growth in the number of companies, and total turnover. According to Armenian National Statistics Service the Information and Communication Technology (ICT) Sector in 2017 grew by 5.3%. However, within the sector, IT services grew by 27.3% from the previous year and volume was $170,092 million in 2017.
Starting from 2015 Armenian legislation contains special legal regime of tax privileges for Armenian IT (and some engineering) startups.
According to “Armenian law on state assistance to IT sector” Armenian companies (or sole entrepreneur) (hereinafter “IT startups”) within 3 months after registration may apply to special certification committee to get certificate and enjoy tax privileges for the next 5 years.
You can contact us for more details about the legislation.
Company Registration
State registration of a legal person is carries out by the Agency for State Register of Legal Persons within the Staff of the Ministry of Justice of the Republic of Armenia (hereinafter referred to as “the Agency”), except for the organisations (banks, credit organisations, insurance companies, contractual investment funds and other financial organisations, including their branches, representations and institutions) the registration whereof is carried out by the Central Bank of the Republic of Armenia. It has no associated costs and the Business Entry One-Stop Shop was launched within the Ministry of Justice in 2011. Name reservations, business registration and tax identification numbers are all issued here. The TIN is issued by the State Registrar. Maximum amount of time this all can take is 3 business days.
Electronic registration is also available at www.e-register.am and is gaining in popularity, but you require an electronic signature. The site also allows you to do a company search by name or person. There are no fees to open an LLC or JSC, unless it is a non-profit organization or a company branch.
Applicants have a few documents that may be needed, though most all can be drawn up at the registration office:
In Armenia, you can choose any name for the company as long as it is not previously registered by the state. Trademarking adds an extra layer of legal protection to your brand. Follow by ordering a company seal, which can take up to 1 day.
Work Permit and Residency
As a general rule, foreign workers (employees and contractors) in Armenia need two documents: 1) a work permit issued by the Ministry of Labor authorizing the Armenian company (employer) to hire the foreigner for a period of up to one year; and 2) a temporary residence permit issued for the duration of the work permit.
There are a number of exemptions from work permit requirements, such as highly skilled foreign specialists, business owners, executives and certain other categories of workers.
The process at the MLSA involves a test of the Armenian market to ensure that there are no qualified and available Armenian workers to fill the position. If MLSA identifies Armenian nationals who may fit with the employer’s requirements they will be referred to the employer for an interview. The employer does not have to advertise the vacancy or to offer a certain wage (as long as the minimum monthly salary requirements are satisfied).
If no candidates are referred by the MSLA to the employer or if the employer rejects these candidates for valid reasons, the employer is then allowed to apply for a work permit for a particular foreigner. The work permit has a fixed term and is renewable on request. From the moment when a work permit is granted the foreign national can start working in Armenia.
After obtaining the work permit the foreign national has to file an application for a temporary residence permit at the Passport and Visa Department of the Police in Yerevan. The application must be accompanied by supporting documentation, including medical test results. The temporary residence card is issued within approximately 30-45 days of the application date.
Under the current regulations obtaining a work permit can take as little as 13 business days.
The employer or the employee will have to pay the fees for obtaining a work permit (AMD 25,000 or around USD 52) and, if necessary, a temporary residence permit (AMD 105,000 or around USD 219).
All documents, except for the employee’s passport, are retained by the MLSA.
Working without a work permit or a residence permit may result in penalties for the employer and visa revocation for the employee. The work permit and the residence permit may be revoked if the employment agreement is terminated.
Armenian residence permit grants you the right to visa-free travel and unrestricted stay in the country and the right to engage in any lawful activities, such as doing business, working, studying or simply retiring. A resident may sponsor his/her family members to become residents and may invite other foreigners to Armenia. Residents enjoy constitutional rights and freedoms, including rights to work, healthcare, social security, education, property and privacy rights, freedom of speech, conscience, religion and belief. Armenian residents are not obliged to serve in the military.
Temporary Resident Card is issued with one-year validity period with the possibility of one-year extension.
The applicant must apply for the extension at least 30 days before the expiration of the Temporary Resident Card.
Permanent Resident Card is issued to a foreign citizen when:
Permanent Resident Card is issued with five-year validity period. It can be extended with five more years.
To extend the Permanent Resident Card, the applicant must apply at least 30 days before the expiration of the card.