Small Business Paradise: Why Armenia Shines in 2024

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Not sure where to launch a small business in 2024? Come to Armenia!

In 2024, Armenia makes major strides in its economic and social development, poised to overcome its prevailing challenges. Despite the hurdles, the nation’s rich history and breathtaking natural beauty remain a strong foundation for growth, particularly in the tourism sector. The allure of Armenia’s cultural heritage and picturesque landscapes not only has the potential to boost tourism (now you know what industry may spark your business interest) but also serves as a catalyst for promoting and solidifying its national identity. As Armenia successfully overcomes the existing difficulties, the intrinsic resilience and determination of the country position it to achieve its goals and pave the way for a promising future in 2024.

Armenia: a draw for small businesses in 2024

With its conducive environment for growth, the country was a promising destination for small businesses and startups in 2023. The International Monetary Fund (IMF) projects a robust 3.5% economic expansion in the country for the year to come, marking a recovery from the dual setbacks of the COVID-19 pandemic and the conflict with Azerbaijan in 2020. Anchoring its appeal, Armenia boasts a low and flat income tax rate of 20%, set to further decrease to 19% soon, coupled with double taxation treaties with over 40 countries. Notably, this is a huge stimulus for international economic collaboration.

Armenia’s strategic positioning facilitates market access to both Europe and Asia, leveraging its membership in the Eurasian Economic Union and a strong partnership with the European Union. Notably, the nation promotes the establishment of small businesses through a special taxation regime for micro-entrepreneurs. Under this framework, micro-entrepreneurs enjoy an exemption from sales tax, replacing it with a fixed monthly payment of AMD 5,000 (approximately EUR 9.6) per activity. Combined with a streamlined and swift online company registration process, it turns Armenia into an attractive hub for small businesses and startups seeking to capitalize on low taxes, beneficial market access, and simplified business procedures.

Micro-entrepreneurship and its allure in Armenia

One distinctive advantage for those considering business ventures in Armenia in 2024 is the option to register as a micro-entrepreneur. This special taxation regime, introduced in the Armenian Tax Code in 2020, provides enticing incentives for small businesses. Below, we will analyze the concept of a micro-entrepreneur, with its associated benefits and requirements, and unravel the straightforward process of registering a company under this regime.

A micro-entrepreneur, as defined by the Armenian Tax Code, is either a legal entity, an individual entrepreneur, or simply an individual meeting specific criteria. The key conditions include an annual turnover not exceeding AMD 24 million (which equals EUR 46,200), no employment of staff, and avoidance of prohibited or restricted activities such as banking, insurance, gambling, and mining.

One of the primary perks for micro-entrepreneurs is the exemption from the standard 20% sales tax on taxable income. Instead, they pay a fixed monthly amount of AMD 5,000 (around EUR 9.6) per activity, irrespective of their income or profit. This sum can be halved for micro-entrepreneurs operating in border or mountainous communities. We would like to draw your attention to additional benefits for micro-entrepreneurs, which include simplified accounting and reporting procedures, reduced administrative burden, and access to various state programs and grants designed to support small and medium enterprises.

Seamless journey of micro-entrepreneur registration in Armenia

The process of registering a company in Armenia as a micro-entrepreneur is both simple and expeditious. The initial step involves choosing a name for the company after you verify its availability on the Electronic Register website. Subsequently, an online application form must be completed on the same platform, accompanied by necessary documents (a passport copy, proof of address, a detailed CV, and a Know Your Customer (KYC) form).

The application is then submitted, and a registration fee of AMD 10,000 (approximately EUR 19.2) is paid online or at any bank branch. Following this, you will receive a confirmation email containing the company’s registration number and tax identification number. Within 20 days of registration, a visit to the tax office is required for an in-person presentation of original documents to verify your identity and the submitted information.

During this visit, a declaration must be signed, affirming compliance with the micro-entrepreneur criteria and agreement to adhere to the rules and obligations of this taxation regime. Upon completion, a certificate of registration as a micro-entrepreneur is issued to the applicant, allowing the commencement of business activities. The entire registration process generally spans from one day to two weeks. The exact term depends upon your company type and document submission efficiency.

Important tips for foreign entrepreneurs in Armenia’s business environment

Please be advised that for foreign entrepreneurs considering this path, several tips and resources will facilitate the registration process in Armenia as a micro-entrepreneur. Firstly, the selection of a company type, whether a legal entity, individual entrepreneur, or individual, should align with your specific needs and goals. To ensure a smooth registration process, consider permitted activities for micro-entrepreneurs such as trade, services, agriculture, or tourism. Currency selection, whether Armenian drams or foreign currency, should be based on convenience and benefits, with the option to exchange currencies at banks or authorized exchange offices.

To streamline the process even further, engage a professional service provider proficient in the legal and regulatory aspects of registering a company in Armenia. You will find numerous service providers online that offer assistance in dealing with the intricacies of the registration process.

In conclusion

Are you intrigued by the prospect of becoming a micro-entrepreneur in Armenia? If you are nodding your head in agreement, don’t waste precious time! Simply reach out to International Wealth, and our legal team will promptly respond to your inquiry. As always, we are more than willing to assist you not only in seizing the micro-entrepreneurial opportunity but also in facilitating the acquisition of real estate in Armenia and the establishment of a bank account. This way, your business and personal journey in Armenia is sure to be as seamless and comfortable as possible. Feel free to connect with us to explore these and many more exciting possibilities!

  • Post published:January 5, 2024
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  • Post category:Business

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