Registration of LLC in Armenia

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Armenia is one of the EEA countries that attracts foreign investment more and more every year with its simplified company registration procedure, government support for investors, as well as a significant number of trade agreements. Armenia has official channels in the field of cooperation with countries such as the USA, Canada, Japan and others. In addition, Armenia cooperates with the European Union. The country and the EU have a Comprehensive and Expanded Partnership Agreement. The document extends its effect not only to the political sphere, but also to the economic sector.

Doing business in this country has the following advantages:

• Possibility of remote registration of companies.
• No minimum capital requirements.  
• Existence of double taxation avoidance agreements. This list includes 41 States.
• Unlimited volume of foreign ownership and repatriation of profits.
• State benefits for companies in the field of IT, pharmaceuticals and tourism.
• Turnover tax – 5% (analogous to the Russian simplified taxation system).
• Availability of free economic zones, activities in which are exempt from most taxes and allow 100% foreign participation.

It is for these reasons that many Russians want to open their own business in Armenia. We will tell you how to do this in this article.

Why do entrepreneurs choose Armenia?

The country has been demonstrating steady economic growth in recent years. It is expressed in an increase in the growth rate of GDP. According to the European Statistical Organization, Armenia shows the largest GDP growth among European countries. In addition, Armenia has a developed tourist network, which causes an annual influx of tourists to the country. However, this is not all the advantages of the country. Among the main ones are:

• The country has free economic zones, where the registration of new enterprises is carried out under a preferential tax system, and also does not require the mandatory hiring of residents for jobs.
• Export of products with reduced transportation costs due to the expanded partnership between the EU countries and Armenia.
• The certificate “Made in Armenia”, which allows entrepreneurs to supply their products to the markets of the EU, China, EFTA, Ukraine, Georgia, as well as CIS countries.
• A large number of startups and investment-active enterprises.
• Armenia is a member of the Eurasian Union, which allows importing goods to a number of countries, as well as exporting raw materials from Belarus, Kazakhstan, Kyrgyzstan and other EAEU members without duties.
• The Government of the country is fighting corruption and bureaucracy, as well as taking measures to reduce crime. This excludes the costs of insuring property, business and other assets.

Features of opening an LLC in Armenia

The legislation establishes the following requirements for a registered company:

• Participants can be both individuals and legal entities, residents or foreigners.
• At least one director must be appointed, regardless of citizenship or residency.
• The name of the LLC must be unique and contain an indication of the organizational and legal form. The inclusion of the words “bank”, “insurance” in the name is allowed if there is a corresponding license from the state.
• If a non-resident needs to register a company in Armenia using national symbols or the word “Armenian” in the name, then it is necessary to obtain the approval of local authorities.

Submission of documents for registration of LLC in Armenia  

Registration of new companies in Armenia is carried out by the Agency of the State Register of Legal Entities of the Ministry of Justice of the Republic of Armenia. As a rule, documents are submitted in person or through the Agency’s website www.e-register.am .

Both the founder and the head of the LLC being created, as well as any persons authorized by them, can submit documents.

The list of documents consists of the following business papers:

• The decision to create an LLC signed by the founders. It must contain the name of the LLC, the legal address, information about the participants and the head, information about the authorized capital.
• The charter of an LLC (a standard one can be selected).
• A notarized copy of the passport/passport of the LLC participant – an individual. Or an extract from the commercial register for a legal entity with a translation into Armenian.
• A notarized copy of the passport/passport of the head of the LLC.
• Application and declaration on the true beneficiaries of the LLC (in Armenian and in Russian).

The application for the state registration of an LLC is filled out by an Agency employee based on the information received.

For electronic registration using the Agency’s website www.e-register.am it is necessary to register and fill in the data:

• About the applicant.
• About the name of the company.
• About the charter (you can choose a standard one) and about the legal address of the company.
• About the types of activities and the actual address.
• About the founders.
• The amount of the authorized capital and the distribution of shares between the founders.
• About the head of the company.

After filling in the data, you will be able to view the submitted application and the charter in Armenian. Then the site page will be displayed, where you can attach additional documents. Further, after passing the data verification, the applicant can submit papers for the registration of an LLC, including by signing them with an electronic signature. In this case, a personal visit to the registration authority is not required.

It is important to take into account that the state fee for the registration of an LLC is not paid.

The procedure for opening an LLC in Armenia

Opening an LLC in Armenia is a procedure that does not require serious financial and time costs. Registration of a new enterprise is carried out in the State Register of Legal Entities of the Ministry of Justice of the state, accompanied by the assignment of a taxpayer number and a corporate seal.

The remote procedure, as a rule, takes about two days, depending on the amount of the state fee paid. Thus, the fee for the standard registration procedure of the company is 8,000 drams (about $ 17), when opening a branch in the Armenian jurisdiction – 12,000 drams (about $ 25).

It is important to note that businesses from other countries do not have to attract residents to open an LLC. The founders can be individuals and legal entities-non-residents with one hundred percent ownership of assets. If we talk about other features of LLC in Armenia, then we need to take into account:

• Complete absence of restrictions on the minimum size of the authorized capital. It can be one euro.
• When using national names, proper names of cities and other localities in the name of an enterprise, the state fee is 600,000 drams (1,233 US dollars) annually.
• The website of the Intellectual Property Agency or the State Register is used to verify registered corporate companies (the name obtained during registration is exclusively the property of the owner of the enterprise).
• The legislation does not limit the powers of nominee directors to manage a new LLC in Armenia.
• The organizational and legal form of enterprises (LLC) provides for the presence of only one shareholder.

Terms of state registration of LLC in Armenia

• Two working days after submission of all necessary documents to the Agency.
• Day to day, if the LLC was created on the basis of standard documents.

LLC is considered registered from the moment of entering into the Unified State Register of information about legal entities established by law.

Grounds for refusal of state registration of LLC

The legislation of Armenia provides the following grounds for refusal to register a legal entity:

• Violation of the procedure established by law for the formation of legal entities.
• Failure to submit documents prescribed by law.
• Non-compliance of the submitted documents with the law or other papers at the disposal of the legal entity.
• Availability of information about the deprivation of the founder, as well as the head of the executive body of the newly registered (created) commercial organization of the right to engage in entrepreneurial activity, as well as about the criminal record that has not been removed or not repaid in accordance with the established procedure.
• Non-compliance of the brand name with the requirements established by law, if the registration of such a name was refused and the person did not submit another name.

It is noteworthy that the contradiction of the charter of the LLC to the legislation of Armenia is not a reason for refusing state registration of a legal entity. Also, they cannot refuse to register an LLC on the grounds of the inexpediency of its creation.

The decision to refuse the state registration of an LLC may be appealed to the Ministry of Justice of the Republic of Armenia, as well as in court.

Features of the tax system in Armenia

Depending on the affiliation to various business entities, a company may receive a different tax regime. Medium and large firms typically pay the following taxes:

• 20% corporate income tax (CIT).
• 20% VAT.

If the company will work in the restaurant business or open a car dealership, a trading company, a transport company, a dental clinic or an entertainment center and the business will operate on a small scale, then it is possible to carry out activities under a patent. We are talking about a fixed fee, which is paid monthly and replaces VAT and CIT.

There is also a form of payment of turnover tax. This is how firms whose annual revenue does not exceed 58.53 million drams can work. The rate is from 1.5% to 5%, set individually.

The tax code separately prescribes the type of family business. In this case, the company does not pay VAT if the turnover for the year is less than 18 million drams.

The income tax paid by companies is 23% (when paying up to 150 thousand drams per month), 28% (from 150 thousand to 2 million drams) and 36% (if more than 2 million drams per month.

The rates for social contributions are 5-10%, depending on the amount received.

VALEN specialists will help investors register a limited liability company in Armenia. Thanks to our lawyers, there is no need to study the Armenian language and Armenian legislation. It is also not required to put an apostille and legalize documents when registering companies by founders from CIS countries – Belarus, Ukraine, Tajikistan, Russia, Azerbaijan, Georgia, Moldova, Kyrgyzstan, Uzbekistan, Turkmenistan.

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