Investment climate, regimes and opportunities in Armenia
The Republic of Armenia has one of the most open investment regimes among the CIS countries. We are implementing an “open-door” policy with regard to foreign investments.
The Government of Armenia is carrying out deep and comprehensive reforms of the business environment providing favorable investment and business opportunities for foreign investors. Today Armenia is
- Armenia is the 38th among 190 countries according to the ranking of WB “Doing Business 2017”.
- With an overall score of 67.0 Armenia is ranked 54th in the 2016 Index of Economic Freedom released by the Heritage Foundation.
We provide guarantees to investors and protection of foreign investment and a number of privileges. The foreign investors are subject to general legislation (similar to local companies), which provides non-discriminatory treatment of foreign investors. The Law on Foreign Investments declares national and most favorite nation regime as well as key rights and privileges for foreign investments:
- 100% of property ownership (except land)
- Unrestricted access to any sector and geographic location within country
- Free and unlimited repatriation of property and profits
- Unlimited currency exchange on market rates
- Guarantees against nationalization and fair compensation in case of expropriation which can take place only in extreme cases of natural and state emergency and based on court decision
- Grandfather clause for 5 years (guarantees against changes of legislation on investments)
- Duty free import of personal goods of foreign employees
- Exploitation of natural resources through concession contracts
- No restrictions for personal recruitment.
As other advantages the following can be mentioned:
1. Free trade agreements with CIS countries, which gives duty free access to 250 million consumers.
2. Bilateral treaties on investment promotion and protection with nearly 40 countries. That means that the investors of the Contracting parties are granted a number of guarantees, in particular fair and equitable treatment, protection from expropriation, free transfer of means and full protection and security, an alternative dispute resolution mechanism is allowed.
3. Membership to the International Centre for Settlement of Investment Disputes.
4. Armenia currently enjoys “Generalized system of preferences” of the USA, Canada, Switzerland, Norway and Japan.
5. Armenia is one of the countries enjoying “Generalized system of preferences” (GSP+) provided by EU.
6. Since 02.01.2015 Armenia is a member of the Eurasian Economic Union (EEU), which creates the following opportunities:
- Access of Armenian production to about 170 million consumers.
- Duty free import of raw materials from EEU member states.
- No customs formalities during mutual trade berween EEU member states, which leads to financial costs reduction and time-consuming for business.
- No non-tarif measures of trade and trade technical bariers between EEU member countries.
- Favorable import tarifs for about 750 products.
At present, Armenia is a country of opportunities with a modern, well-educated, hard-working human capital, and various models of cooperation with a number of countries. Our country could become a unique bridge between the member states of the European Union and the Eurasian Economic Union: considering membership to the Eurasian Economic Union and the consequent opportunities on one hand, and the possibility of GSP+ preferential trade system with the European Union on the other. Armenia enjoys GSP preferential trade regime with Canada, Switzerland, Japan, Norway, and the USA. Another opportunity is the “Trade and Investment Framework Agreement” signed between the Government of the Republic of Armenia and the Government of the USA which creates favorable conditions for investments, commodity and trade promotion between the both countries.
Throughout its history, Armenia was situated on the crossroads of the East and the West thus making the Armenian nation perceptible both in Europe and in Asia. Armenia is ready to become a hub for international business community introducing the traditional Armenian hospitality and the comfortable accommodation conditions for businessmen and their families, bringing together the western and eastern mentality as well as lifestyle. In this context, I would like you to consider the possibilities of setting up head offices of major international organizations in the Republic of Armenia.
The following incentives are provided to investors in Armenia:
1. VAT payments postponement for up to 3-year period for importing equipment and goods within the scope of investment projects (RA Law “On Value Added Tax”, RA Government decree №1119-N of August 4, 2011).
2. Profit tax privileges can be also provided for new jobs creation for the projects selected by the corresponding decree of the Government of RA (RA Law “On Profit tax”).
3. Profit tax privileges for large exporters (RA Law “On Profit tax”).
4. Support to newly established IT companies (RA Law “On State Support to Information Technology Sphere”).
5. Opportunity to operate industrial zones (RA Law “On Industrial Policy”)
6. Customs duty exemption for materials and equipment imported from non-EaEU country that cannot be replaced by materials and equipment produced by EaEU country to realize investment project in the priority sector of economy of RA and exceptionally on the territory of RA (RA Government decree №1118-N of September 17, 2015).
7. Free economic zones. Residents of FEZ in Armenia are completely exempted from VAT, profit tax, property tax and customs duties (RA Law “On Free Economic Zones”, RA Government decree №1521-N of October 13, 2011). Services on behalf of the state bodies are delivered on “one stop shop” basis (RA Government decree №292-N of March 15, 2012).
Currently operating “Alliance” free economic zone is oriented to the production and exports of high and innovative technologies in the field of electronics, precision engineering, pharmaceutics and biotechnologies, information technologies, alternative energy, industrial design and telecommunications, as well as non-developed spheres in Armenia.
''MERIDIAN'' Free Economic Zone is specialized in jewelry, stones cutting and watch making.