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JOINT-STOCK COMPANY

HOW TO REGISTER YOUR BUSINESS

 

Who is a foreign investor?
A foreign investor can be any foreign state, foreign legal entity, foreign citizen, stateless person, citizen of the Republic of Armenia permanently residing out of the territory of the Republic of Armenia, as well as any international organization which engages, in accordance with the legislation of the country of its location, in investment in the Republic of Armenia.

What is a foreign investment?
Foreign investment is any type of property, including financial resources and intellectual values, which is being directly invested by a foreign investor in commercial and other activities implemented on the territory of the Republic of Armenia to gain profit (revenue) or achieve any other beneficial result

What is an enterprise with foreign investment?
It is an enterprise of any organizational-legal type created in compliance with the legislation of the Republic of Armenia, the founder or a participant of which is a foreign investor.


What kinds of investment forms are there?
  Foreign investors shall be entitled to investment in the territory of the Republic of Armenia by means of:
   a) Foreign currency, other currency values and the national currency of the Republic of Armenia;
   b) Movable and immovable property (structures, buildings, equipment and other material values) and   any property right related to that property;
   c) Stocks, bonds and other securities as established by legislation of the Republic of Armenia;
   d) Any right to claim money or performance of contractual obligations;
   e) Any valuable right to intellectual property;
   f) A right, conferred by legislation of the Republic of Armenia or by contract, to engage in economic activities, including the right to explore, extract, develop or exploit natural resources;
   g) Paid services:
   h) Any other type of investment not prohibited by the legislation of the Republic of Armenia

What are the methods of implementing foreign investments?
 Foreign investors shall be entitled to implement investments using the following methods:
   a) creation of enterprises entirely owned by foreign investors; creation of branches, divisions and representative offices owned by foreign legal entities and takeover of ownership of acting concern;
   b) foundation of joint ventures with legal entities and non-incorporated enterprises of the Republic of Armenia as well as citizens of the Republic of Armenia or acquisition of shares in acting concerns;
   c) acquisition of stocks, bonds, and other securities within the limits defined and established by the legislation of the Republic of Armenia:
   d) attainment of the right to use land independently or with the participation of legal entities or non-incorporated enterprises of the Republic of Armenia and procurement of concessions to use natural resources on the territory of the Republic of Armenia;
   e) acquisition of other property rights;
   f) other methods which are not prohibited by the legislation of the Republic of Armenia, particularly the conclusion of contracts with legal entities or non-incorporated enterprises of the Republic of Armenia.

Implementation of foreign investments may be prohibited or limited to the manner provided by the legislation of the Republic of Armenia.

  What legal regimes of foreign investment are used in the Republic of Armenia?
The legal regime of the Republic of Armenia governing foreign investments and the methods of their implementation cannot be less favorable than the regime governing the property, property rights and investment activities of citizens, legal entities and non-incorporated enterprises of the Republic of Armenia.
To encourage foreign investments in the most significant fields of social and economic development, additional privileges for such investments may be established in a manner provided by legislation of the Republic of Armenia.
The legislation of the Republic of Armenia may define those areas, wherein the activities of foreign investors and enterprises with foreign investment are limited or prohibited due to requirements of national security.

Are there any guaranties in the event of amendments to the legislation of the Republic of Armenia?
In the event of amendments to the foreign investment legislation of the Republic of Armenia, the legislation, which is effective at the moment of implementation of investments, shall be applied upon the request of a foreign investor, during a five year period from that moment.
Foreign investments in the Republic of Armenia shall not be subject to nationalization. Government bodies cannot confiscate foreign investments.
Confiscation may be allowed only as an extreme means in case of emergency declared in accordance with the legislation of the Republic of Armenia, and it may be applied only upon the judgment of law court and with full compensation.

What compensation is assigned for damages caused to foreign investors?
Foreign investors shall be entitled to compensation, according to a court decision, for those material and moral damages, including lost profits, which damages are caused to them as a result of illegal actions performed by the Government bodies of the Republic of Armenia or their officials as well as improper performance by those bodies or their officials of their obligations established by the legislation of the Republic of Armenia toward a foreign investor or enterprise with foreign participation.
All the damages caused to foreign investors as a result of actions identified in Article 8 and Article 9 Clause 1 of the RA Law on Foreign Investments shall be subject to prompt compensation at current market prices or prices determined by independent auditors. This compensation shall be paid either in the currency invested or in any other currency mutually agreed upon by the parties.
For the period from the moment of origination of the right to compensation through the moment of its execution, interest on the due amount of compensation shall be calculated at current rates for deposit accounts established on the loan market of the Republic of Armenia.

What is the procedure of disposal of a foreign investor's profits or revenue and other means?
A foreign investor's profit or revenue, after paying the taxes and other fees established by the legislation of the Republic of Armenia, shall remain under his/her disposal.
Foreign investors shall be entitled to open current and other accounts in the banks of the Republic of Armenia authorized by the legislation of the Republic of Armenia, in a manner established by legislation of the Republic of Armenia.
Foreign investors shall be entitled to legally acquire foreign currency or commodities in the domestic market of the Republic of Armenia, in a manner established by the legislation of the Republic of Armenia

What customs duties exemptions are applicable?
Property imported by a foreign investor into the Republic of Armenia as the authorized capital of the foreign investment enterprise shall be exempted from customs duties. The list of such property is stipulated by the RA Government decree.
Property imported into the Republic of Armenia by foreign employees of enterprises with foreign investment intended for their personal use shall be exempted from customs duties

What are the particularities of export and import of products, work and services?
Enterprises with foreign investment shall be entitled to export their own products, works and services and import products, works and services for their own needs without any license, with the exception of the cases defined by the legislation of the Republic of Armenia and by international agreements. Regulations regarding the certification of exported products, works and services as private products of the above mentioned enterprises are established by the legislation of the Republic of Armenia.
Products, works and services being imported for the needs of the above mentioned enterprises are regulated according to the legislation of the Republic of Armenia.
Profits or revenues, including currency, gained by the above mentioned enterprises from the export of their own products, works and services, after the payment of taxes established by legislation of the Republic of Armenia, remains at the disposal of those enterprises.
Export and import of other products, works and services by enterprises with foreign investment shall be done on the basis established by legislation of the Republic of Armenia.

What kind of the taxes are paid in Armenia?

According to the RA law on Taxes, the following taxes are derived in Armenia:

1. State taxes

a) Profit tax

b) Income tax

c) Excise tax

d) Value added tax

According to the law, fixed payments and patent fees can be derived instead of above mentioned taxes.

2. Local taxes

a) Property tax

b) Land tax

c) Hotel tax

Other local taxes can be stipulated by other laws.

 

What tax privileges do companies have in Armenia?

A significant taxation privilege is stipulated by the RA law on Value added tax. In particular The VAT payment is delayed in case of importation by companies and sole entrepreneurs of goods classified under the following codes of Foreign Economic Activity Commodity Nomenclature (FEACN):  8422 (except for 842211000 and 842290100 codes), 8441, 8452 (except for 845210 and 845290000 codes), 8453, 8475, 250510, 250900, 251820, 2836, 39162010, 76041090, 8419, 8426, 8429, 8430, 8435, 8443, 8478, 8479, 85023100, 870410. VAT payment is delayed:

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.

In case the companies and sole entrepreneurs, elected according to the Government decree, in frames of investment projects import goods other than the ones classified under above mentioned FEACN codes and the value of which exceed 300 million AMD, the payment of VAT, calculated by customs bodies, can be delayed for three years.

 

Are there any privileges related to taxation of enterprises with foreign investment?
Enterprises with foreign investment shall pay taxes and enjoy tax privileges in a manner established by the legislation of the Republic of Armenia.
Privileges established by the RA Law on Foreign Investments shall apply to those enterprises with foreign investment where such investment is no less than 30 (thirty) percent at the moment of foundation.
For the purpose of drawing up the balance sheet and inventory, an enterprise with foreign investment shall convert foreign currency into the national currency of the Republic of Armenia at the exchange rate determined in accordance with Article 5 of the RA Law on Foreign Investments and other legislation of the Republic of Armenia.

JOINT-STOCK COMPANY


 .What is a joint-stock company in Armenia?
A joint-stock company is an enterprise which is a legal entity whose capital is divided into shares. There are two kinds of joint-stock companies, open and close.

What is the procedure for dismissal of officers?
Managers, members of the Board of Directors or members of the Supervisory Board may be dismissed by a vote of the General Meeting of the shareholders representing a working majority.

What minimum amount of statutory capital is required?
According to recent legislative amendments companies are no longer required to have a statutory capital except for financial organization, such as banks, credit, investment, insurance companies etc.

What is the minimum number of shareholders required?
A stock company may be established by domestic and foreign individuals and legal persons. According to the Civil Code a joint-stock company may be established by one person if he takes up all the shares of the company.

Are Board members required to be Armenian nationals or residents?
Board members, members of the Board of Directors or the Supervisory Boards and the Chairman of the Board of Directors are not required to be Armenian citizens or residents.

Who can be the members of the Board of Directors?
The members of the Board of Directors can be shareholders as well as third parties elected by the shareholders.

HOW TO REGISTER YOUR BUSINESS

 

How to begin the process of registration of a company?

To begin the State registration process you will need to present the below mentioned documents to the State Register Agency:

1. application;

2.the decision on founding a company taken by the founders of the company or the protocol of the founding meeting which shall be signed by all the founders or (in cases stipulated by the law) by the chairman of the meeting and the secretary;

3. the charter of the company, certified by the founder(s) or founding meeting;

4. information concerning the executive body of the company or its caretaker (passport data, social insurance card number, email);

5. in case there is only one founder of the company, instead of the documents mentioned in point 2, the founder shall present his individual decision;

6. in case there is a legal entity (registered in Armenia) among the founders of the company, in addition to the above mentioned documents, it is necessary to present also its decision as well as information concerning the legal entity -  the name and the registration number (this information shall not be presented if the founder is the State or a community);

7. in case there is a foreign legal entity among the founders of the company, it is necessary to present also an extract from the Commercial Register of the country where the founder legal entity is registered or other equivalent document proving the legal status of the founder as well as its constituent documents or extracts from them (all documents are to be certified and translated into Armenian);

8. in case the founder of the company is a foreign citizen, it is necessary to present also the copy of his/her passport or other equivalent document, certified and translated into Armenian.

 

 

How do I present registration documents?

You can either present the hard copies of above mentioned documents personally or you can input all necessary information and registration documents into the information system of the State Register Agency. 


How long will it take for the State Register Agency to accept or reject my application?

Within maximum 2 working days after receiving registration documents the State Register Agency shall either register the company or reject the application mentioning the grounds and reasons for rejection. In case the applicant uses template constituent documents provided by the RA Minister of Justice, the registration of the company will be carried out immediately.

How do I know that the company is registered?

If the application and the necessary documents are in line with the legislation requirements, the State Register Agency will issue the registration number, tax payer code and social payments card number.

 

What certifies the registration of the company?

The company registration is certified by an extract from the State Unified Register which is sent to the email address provided by the applicant. The information on the company registration also becomes available on the Internet through inputting a password into the information center.

Upon request of the authorized person the State Register Agency provides the printed version (copy) of the extract with a signature of the representative of the Agency.


How do I register the company with the Tax Service?

Registration with the Tax Service is carried out simultaneously with the company registration and the tax payer code is issued by the State Register Agency.


Where do I submit my social security registration?

The social security registration is also carried out simultaneously with the company registration and the social payments card number is also issued by the State Register Agency.


How is the company name registered?
The company name registration is also carried out through the State Register Agency and is included in the company registration procedure.

How much do I have to pay for the company registration?

The registration of legal entities is carried out free of charge. Private entrepreneurs have to pay AMD 3,000 (≈ $ 7) for their registration. This fee can be paid at any banks and also at State Register Agency through bank terminals.

 

How to develop a charter for the company?

You may take a printed version of template charter from the State Register Agency or can download it in a digital format from the official website of the Agency (www.e-register.am). Also, you can develop your own charter with the assistance of different legal counseling specialists.

 
Do I need a license?


Many economic activities require a license. To determine if your business requires a license, refer to the article 43 of the Law of the RA on Licensing (you can find the law on “Legislation” section of www.parliament.am website). If you do need a license, then the law will help you determine what type of license (simple or compound) is required and which agency is the licensor.

Due to recent legislative amendments, it is now possible to apply for a license on-line using the following link: https://www.e-gov.am/licenses.

    Simple license
To apply for a simple license, submit a written request to the License Agency of RA Ministry of Finance at 1 Melik Adamyan street, Yerevan 0010. You should present the following documents and information to the License Agency:

1. Application, indicating:

a) in case of legal entity, the name and organizational structure of the legal entity, the location and activity addresses, in case of sole proprietor or physical person,  the name, living and activity  addresses,

b) type of planned activity subject to licensing,

c) in case of legal entity, information concerning tax payer code, in case of sole proprietor or physical person, information concerning tax payer code or social card,

d) other information stipulated by law,

2. In case of legal entity, the copy of charter and registration certificate, in case of sole proprietor, the copy of registration certificate.

3. Other documents stipulated by law.

The simple license is issued within 5 working days after submission of above mentioned documents.
   Compound license
Types of compound licenses and names of agencies that oversee respective activities  are stipulated in the article 43 of the Law of the RA on Licensing. In order to apply for a compound license, you should present the documents required for a simple license, plus  a document confirming professional capability of people engaged in the activity subject to licensing as well as other documents stipulated by law.

 The compound license is issued within 30 working days after submission of above mentioned documents (if different term is not stipulated by law).

Who needs to register with Customs Service?
Not all companies are required to register with Customs; only those companies that plan on exporting and/or importing are required to register with customs.  After the company is registered with Customs Service it is provided with a personal code, which is used for customs processing in the sequel.

You are now legally registered and on the road to... 
  SUCCESS!



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