Company Formation Armenia
Updated on Friday 23rd November 2018
Armenia is a rather small, yet strategically important country situated at the crossroads of Europe and Asia. Moreover, Armenia provides a positive and open attitude towards foreign investments. A positive and open attitude towards foreign investments, together with support from the Government for direct foreign investments are key factors that make Armenia attractive both to foreign investors who wish to open a new company and for foreign corporations that want to expand on the market. Our agents are specialized both in offshore company formation in Armenia and can assist you if you choose this jurisdiction for company formation purposes.
When opening a company in Armenia, one of the first steps is to understand the local regulations and the investment environment, followed by choosing an appropriate type of company. the list below includes the types of business entities available to local and foreign investors:
- the limited liability company: incorporated by one or more shareholders who will be liable only to the extent of their initial investment.
- the joint-stock company: with similar liability principles as the limited liability company, this business form is suitable to larger corporations doing business in the country.
- the partnership: this includes both the limited partnership and the full partnership or general one; the differences lie in the liability of the partners and are described below.
- the branch: this is an extension of a foreign company abroad that can perform the same business activities in Armenia.
- the sole trader: this is an individual who engages in delivering certain types of services under full liability for the business activities.
Company formation in Armenia is subject to a set of rules regarding the incorporation process but also for incorporation costs. Some of the common fees will include those for drawing up (and translating) the needed documents, Government fees, notary fees as well as legal fees when applicable. The procedure is necessary in order to register the company with the State Registry of Legal Entities and this initial step is followed by also registering the company with the tax authorities.
The company formation procedure in Armenia, the needed taxes as well as the subsequent procedures after registering the company with the State Registry will depend on the chosen type of company. This is why working with our team of offshore company formation agents who specialize in Armenia is useful for investors and can help save time and streamline the entire process.
Below, we present the main steps for company creation as well as other issues to take into consideration when opening a business in Armenia.
Company formation steps in Armenia
In order to open a company in Armenia, investors are required to choose between one of the available business forms. Issues like taxation for the selected type, the available capital, the liability, and management structure are all worth taking into consideration when making this decision.
The steps described below outline the general procedure for company formation.
- Upon deciding to open a company in Armenia, the client is asked to provide three company names for the future entity; as the respective denominations must first be checked and then reserved, the client can freely state three such names as per his/her choice. In the meantime, a company-related form should be filled out by the client with information on the shareholding structure of the newly opened company in Armenia, i.e. shareholder/s and director/s, and company’s proposed activities.
- Along with this form and depending on the shareholding structure, in other words whether the company will be founded by a natural person or a legal entity, the client should also provide a series of documents that are to be used in the incorporation process; among the necessary documents for opening a company in Armenia, we mention: copies of the passports of the shareholders and directors, specimen signatures, articles of association, certificate of incorporation and certificate of good standing. Most foreign investors choose not to visit the country for this purpose and to delegate powers to a representative through a Power of Attorney. Based on this specific document, notarized and apostilled, the company can be registered with the local Trade Register and also the company’s bank account can be set up.
- Once the documents mentioned above have been duly prepared and provided by the client, then they can be submitted for registration, which is, in fact, a quite straightforward procedure.
- Business licenses and permits are not required in all business fields, however, some type of businesses that engage in selected fields may be required to obtain special licenses as well as notify that they will undertake a certain activity. In some cases, a municipality permit is required.
Requirements for company registration in Armenia
The laws on foreign investments in Armenia allows for full foreign ownership and there is no need for the director of a company to be an Armenian citizen. Some of the facts on company formation advantages in Armenia are highlighted below:
- any person of any nationality or residence can be director or shareholder in an Armenian company;
- the shareholders of a company established in Armenia can be both natural persons or legal entities;
- a company opened in Armenia must hold a local registered office (service provided by BridgeWest);
- although there is no minimum requirement for the share capital, it is, however, advisable to deposit approximately 50,000 AMD.
- the entire company registration procedure is a straightforward one which can, under ideal conditions, take only a few business days.
Our offshore company formation team can give you more details about these requirements as well as the associated costs for registration and maintenance. An option for foreign investors who cannot be present in the country during the entire company formation procedure is to reach out to our agents who specialize in incorporation matters in Armenia and arrange for representation through a power of attorney.
Services provided for company incorporation in Armenia
Our team of offshore company setup agents who also provides complete incorporation services in Armenia can help you with the following:
- drafting the Articles of Association (necessary for the company incorporation in Armenia): The Articles of Association of an Armenian company can be signed through Power of Attorney (the same applies to Public Notary proceedings, a step required by the Armenian Law).
- drafting all other documents required for the incorporation of the Armenian company:
- These documents include Specimen Signatures, Special Forms provided by the Company Registration Office in Armenia etc.
- arranging Public Notary procedures: The procedures for incorporating a company in Armenia have to be done through an Armenian Public Notary;
- offering a Registered Office in Armenia for your company (if required): The registered office may be any address where the Armenian company declares to have its headquarters. The registered office will be public.
- setting up a bank account for your Armenian company: This refers both to an initial share capital account as well as a current bank account after the company is formed.
- recommending an accountant in Armenia: Accountancy services are recommended for any new business registration in Armenia.
Establishing an Armenian Limited Liability Company
Like sole proprietorships, limited liability companies are a common form of business organization, as they have no complex organization procedures and are fit for small and medium business. A limited liability company can be opened in Armenia by one or more persons who are liable for the company's debts and obligations, only to the extent of their investments. Prior to registration, the founders must fully pay the initial capital. There is no statutory requirement to have a minimum authorized capital upon incorporation and this can be an advantage for investors. a minimum investment is recommended and one of our agents can give you more information on this matter.
Registering an Armenian Open Joint Stock Company
The joint stock company is a legal entity with a charter capital divided into a defined number of shares. The founders established the nominal value of the shares. Their liability is limited to the value of their possessed share. The open joint stock company is different from the closed one having stocks available for sale to the public. The share capital of the company can consist of common voting or non-voting shares. There is a requirement to have a report issued by an external agent for in-kind contributions.
Incorporating an Armenian Closed Joint Stock Company
The closed JSC functions the same as a regular JSC, having a capital divided among shareholders, with a determined nominal value per share and limited liability for each shareholder. The main difference is that in a closed JSC shareholders cannot sell their shares to the public, the stocks being owned only by the founders. This closed type has a limited number of shareholders.
Establishing an Armenian Branch, Subsidiary or Representative Office
Any foreign company is able to set up branch entities in Armenia that will act as extensions of their activities. It is also possible to set up a subsidiary and the differences between these two are worth taking into consideration:
- liability: the foreign company abroad is fully liable for the branch’s actions in Armenia while the subsidiary is a separate legal entity;
- taxation: the branch is taxed on its Armenian profits while the subsidiary is taxed as a resident company, on its worldwide profits.
- limitations: the branch office must use the same business name as the parent company while the subsidiary can have a different business name.
- governing law: the branch is not solely governed by Armenian law because it is not a legal entity with legal capacity in Armenia; the subsidiary is under compliance with the Armenian company laws.
Lastly, the representative office is only suitable for those foreign companies that need to perform market research activities in Armenia. The office cannot engage in usual business activities and cannot derive profits.
Armenia key facts
Some of the facts below are of interest for those who open a company in Armenia with the help of our offshore incorporation agents:
- Armenia has a corporate tax of 20% on taxable profit earned by legal entities.
- The VAT in Armenia is 20%. Some transactions in different fields are subject to exemption from the VAT in Armenia. The VAT can be paid monthly or quarterly, according to preferences. The choice has to be stipulated at registration.
- Dividends received by a resident company are taxed at a 20% rate; however, the provisions of a double tax treaty signed by Armenia and another country in which the company making the dividend payments is located can lower this percentage.
BridgeWest is also able to offer ready-made Armenian companies and VAT registration. This is a separate service that encompasses the broader aspects of shelf companies in the country. Investors who believe that purchasing a ready-made company is suitable for their business goals (as it allows for a faster setup time) can reach out to us for more information about the available options.
Please contact our team of experts in offshore company formation matters for more information and prices.