Company Formation Armenia
Updated on Tuesday 08th May 2018
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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. Foreign-owned companies are encouraged by the Armenian Government to open companies in Armenia, who is making significant efforts to attract businesses from all over the world.
Company formation steps in Armenia
In view of opening a limited liability company in Armenia, the founders should observe certain standard and well-structured procedures.
1) 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.
2) 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.
3) 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.
Requirements for companyRegistration in Armenia
- 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 (around 90 EUR).
Services provided for company incorporation in Armenia
- 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. The minimum capital for an Armenian Limited Liability company is 50,000 AMD (approx. 100 EUR), of which half should be paid up prior to registration. The profits are divided among founders according to the stipulations in the charter.
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 minimum required capital for an open JSC is 1,000 times the minimum monthly wage. Prior to founding a JSC, the founders must fully pay the minimum required capital.
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. Also, a closed JSC requires a minimum capital reduced to 100 times the minimum monthly wage.
Establishing an Armenian Branch, Subsidiary or Representative Office - Any foreign company is able to set up branch entities in Armenia. These can be set up as separate entities from the parent company (Armenian companies having the foreign company as shareholder) or extensions of the parent-company in Armenia.
Armenia key facts
- Armenia has a corporate tax of 20% on taxable profit earned by legal entities.
- The VAT in Armenia is 20%. Some transactions in different areas are subject to exemption from VAT in Armenia. The VAT can be paid monthly or quarterly, according to preferences. The choice has to be stipulated at registration.
- When it comes to dividends, the recipients, whether they are from Armenia or not, do not have to pay dividend tax. Anyhow, there are some exceptions for non-residents of Armenia, when the dividend tax is withheld at the source.
BridgeWest is also able to offer ready-made Armenian companies and VAT registration.
Please contact us for more information and prices.