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Invest Armenia

Invest Armenia. Ashot Khudgaryan, Investment Promotion Officer Development Foundation of Armenia. 2015. Country Profile. Independence: 21 September 1991 Area: 29,743 sq. km Population: 3.01 million Official Language: Armenian Working Language: English, Russian

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Invest Armenia

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  1. Invest Armenia Ashot Khudgaryan, Investment Promotion Officer Development Foundation of Armenia 2015

  2. Country Profile • Independence: 21 September 1991 • Area: 29,743 sq. km • Population: 3.01 million • Official Language: Armenian • Working Language: English, Russian • Membership in: 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

  3. Macroeconomic Data 2014 GDP Breakdown Source: ArmStat

  4. 2014 Export Statistics Export volume – $1,518 bn. Export Structure by Countries Export Structure by Products Source: ArmStat

  5. 2014 Import Statistics Import volume – $4,401 bn. Import Structure by Countries Import Structure by Products Source: ArmStat

  6. FDI inflow in 2014 2014 FDI inflow : 349,986,300 USD Source: MinEconomy

  7. Key Sectors • Agriculture • Watch Making, Jewelry & Diamonds • IT & Innovation • Tourism & Aviation • Life Sciences • Renewable Energy

  8. Armenia in the EEU Source: Doing Business, Heritage Foundation, Transparency International

  9. FDI in Armenia

  10. Main Business Cost Components Source: ArmStat

  11. 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

  12. 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

  13. 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

  14. 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.

  15. 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.

  16. 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

  17. 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%

  18. 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. 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%D0%97%D0%AA%D0%AF%D0%A2%D0%98%D0%AF%20%D0%A0%D0%90%20%D0%BD%D0%B0%2017.01.2016.pdf

  19. Development Foundation of Armenia • Reliable partner, who provides you: • Aftercare • Tailored Quality Information • Assistance in Company Registration and Recruitment • Business Connections in Armenia • Liaising with Government Institutions

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