Invest Armenia
Ashot Khudgaryan, Investment Promotion Officer
Development Foundation of Armenia
2015
Country Profile
Independence:
Area:
Population:
Official Language:
Working Language:
Membership in:
21 September 1991
29,743 sq. km
3.01 million
Armenian
English, Russian
UN, Eurasian Economic
Union, Council of
Europe, WTO, CIS, OSCE
Highlights:
Diaspora : 7mln
2 international airports:
Zvartnots International Airport,
Shirak International Airport
Located at the crossroads of Europe and Asia
Currency: Armenian Dram: 1AMD = 0.0021USD
9th safest country (2015 Gallup Law and Order Index)
Source: ArmStat, GALLUP
Macroeconomic Data
2014 GDP Breakdown
2014 Data
Gross Domestic Product
(USD billion)
10.8
Gross Domestic Product
real growth, %
3.5
Inflation (year-end)
3.0
Investment (USD million)
839.7
incl. FDI (USD million)
350.0
Exports FOB (USD million)
1547.3
Imports CIF (USD million)
4424.4
Source: ArmStat
2014 Export Statistics
Export volume – $1,518 bn.
Export Structure by Countries
Source: ArmStat
Export Structure by Products
2014 Import Statistics
Import volume – $4,401 bn.
Import Structure by Countries
Source: ArmStat
Import Structure by Products
FDI inflow in 2014
2014 FDI inflow : 349,986,300 USD
No.
Sector
%
No.
Country
%
1
Electricity, gas, steam
and air supply
71.19
1
Russian Federation
73.54
2
Beverages
7.41
2
Germany
5.66
3
Telecommunication
5.22
3
Uk
4.03
4
Mining
4.87
4
Lebanon
3.43
5
Real Estate
3.13
5
Luxembourg
3.31
6
Construction
1.86
6
Switzerland
2.78
7
IT
1.84
7
France
2.22
8
Plant and animal
breeding
1.37
8
Argentina
1.92
9
Accommodation
0.93
9
Ireland
1.65
10
Other
2.18
10
Other
1.46
Source: MinEconomy
Key Sectors
• Agriculture
• Watch Making, Jewelry & Diamonds
• IT & Innovation
• Tourism & Aviation
• Life Sciences
• Renewable Energy
Armenia in the EEU
Rank in the
World
(1-best,
185 – worst)
Ease of Doing
Business
(Doing Business
by World Bank )
Economic
Freedom
(Heritage
Foundation)
Corruption
Perception
Index
(Transparency
International)
Armenia
35
52
94
Kazakhstan
41
69
126
Belarus
44
153
119
Russia
51
143
136
Kyrgyzstan
67
82
136
Source: Doing Business, Heritage Foundation, Transparency International
FDI in Armenia
Main Business Cost Components
Electricity Supply
0.08 $ Kw/hr
Water Supply
0.35 $/m3
Gas Supply
328.42$/1000m3 (up to 10,000m3 consumption per month)
276.98$/1000m3 (over 10,000m3 consumption per month)
Office Purchase
700-3500$ per m2 for a prime location
Office Rent
Starting from 20$ per m2 for a prime location
Construction Costs
300-500$ per m2 of construction
Land Purchase
20-100$ per m2
Land Rent
50$ per m2 annually
Unskilled Worker Year Salary
3000 USD
Semi-skilled Worker Year Salary
5100 USD
Skilled Worker Year Salary
9200 USD
Source: ArmStat
Why Invest in Armenia
•
Talented, creative, easily trainable and cost efficient workforce
•
Developed infrastructures
•
Developed banking system according to international standards
•
100% ownership allowed for foreign companies
•
“Grandfather clause” for 5 years
•
No restrictions on investment sectors
•
No restrictions on remittances
•
Free repatriation of profit
•
Free currency exchange
•
No restrictions on staff recruitment
•
Foreign companies, registered in Armenia have the right to buy land
•
Existence of 2 Free economic zones: high tech and jewelry and diamond processing
•
Special incentive schemes for investment project
•
35th in the world according to the “Ease of Doing Business” ranking*
•
52nd in the world according to the “Economic Freedom” ranking*
•
R&D expenses incurred during the reporting year are fully deductible from gross income
Trade Regimes of Armenia
Armenia is a member of:
• WTO
• Eurasian Economic Union with Russia, Kazakhstan, Belarus and Kyrgyzstan,
-> access to market of 182.1 million
• GSP regime with USA, Canada, Japan, Norway and Switzerland
• GSP+ regime with EU: 7,200 made in Armenia products can be exported to EU
without customs duties.
International Agreements:
• Free Trade Agreements with CIS countries: Ukraine, Moldova, Tajikistan,
Turkmenistan and Georgia.
• MFN regime with all WTO members
• TIFA Agreement with the US
FDI Protection & International Treaties
• The law “On Foreign Investments” provides guarantees for national
treatment and non-discrimination for foreign investors.
• Bilateral Investment Treaties on Reciprocal Promotion and
Protection of FDI with 41 countries – Argentina, Austria, Belarus,
Belgium-Luxemburg, Bulgaria, Canada, China, Cyprus, Egypt, Finland,
France, Georgia, Germany, Greece, India, Iran, Iraq, Israel, Italy,
Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Latvia, Lebanon, Lithuania,
Netherlands, Qatar, Romania, Russian Federation, Sweden,
Switzerland, Syria, Tajikistan, Turkmenistan, Ukraine, UAE, United
Kingdom of Great Britain and Northern Ireland, Uruguay, USA,
Vietnam.
• Armenia has signed Double Taxation Treaties with 43 countries
Taxation
- Armenia has the lowest tax rate of commercial profits in the CIS
Armenia - 19.9%, World average – 40.8%, Europe average– 43.6%)
- Tax privileges for IT start-ups
- Tax exemptions for activities conducted at border zones.
Taxes
VАТ
20%
Profit Tax
Income Tax
20%
24.4% - 26%, after 4200$ - 36%
Export Duty
0%
Simplified Taxation for SMEs
Tax Privileges
Up to 30 % of profit tax reduction on the investment projects
approved by the Government of RA, compensating the salaries of
new jobs created for the current and 2 subsequent fiscal years.
VAT payment at importation could be delayed for certain goods
under specified codes:
1) for One year starting from the day of declaration of imported
goods if their customs value is less than 70 million AMD
2) for Two years starting from the day of declaration of imported
goods if their customs value is 70 million AMD or more
3) for Three years starting from the day of declaration of imported
goods if their customs value is more than 300 million AMD.
For other goods the importation cost of which exceeds 200
million AMD, VAT payment is delayed for three years.
Tax Privileges
Tax privileges are granted to large exporters.
Large exporters can be taxed at the following rates:
- 5% profit tax, if the sum of the exported goods and services
makes more than 40 billion AMD
- 2% profit tax, if the sum of the exported goods and services
makes more than 50 billion AMD
If they satisfy all the following conditions:
- Sum of exported goods and services, but no mineral materials,
precious metals and stones or products subject to excise tax,
must make a minimum of 40 billion AMD
- The company must have no income from sales of products or
providing services on the RA territory
Free Economic Zones
High-tech oriented FEZ for the following sectors:
• Electronics & Precision Engineering
• Alternative Energy
• Pharmaceutical industry & Biotechnology
• IT & Telecommunication
• Industrial Design
•
Production & Export Section
Industrial space - 55.799 sq m
Office space - 10.908 sq m
•
R&D Section
R&D space – 27.060 sq m
FEZ for Jewelry Sector Development
• Jewelry and watches production
• Diamond processing and cutting
• Other jewelry goods and accessories
production
Production/Office Section - 25.450 m2
Diamond Cutting Section – 6000 m2
Auxiliary Area – 10.000 m2
Exhibition Halls – 10.180 m2
Privileges:
Profit tax
• Corporate income tax
• Value added tax
• Property tax
• Customs duty
0%
Customs
Customs duties exemptions for imports of technological equipment, raw material and
material from a third country for exceptional use on the territory of EEU member state
within the frameworks of investment project implementation in accordance with
priority activities (sectors of economy) of EEU member states.
Customs Duties
Export Duty
0%
Import Duty
0% or 10%
The full list of the EEC common customs rates approved by the Eurasian Economic
Union can be found by this link.
http://www.eurasiancommission.org/en/act/trade/catr/ett/Pages/default.aspx
The full list of the EEC common customs rate exemptions for Armenia can be found
by this link.
http://www.eurasiancommission.org/ru/act/trade/catr/ttr/Documents/%D0%98%D
0%97%D0%AA%D0%AF%D0%A2%D0%98%D0%AF%20%D0%A0%D0%90%20%D0%B
D%D0%B0%2017.01.2016.pdf
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