US embassy cable - 05YEREVAN189

UNCLAS SECTION 01 OF 05 YEREVAN 000189 
 
SIPDIS 
 
COMMERCE FOR 3150/PBRADLEY/BSMITH 
COMMERCE FOR 4201/ITA/IEP/OEERIS/BISNIS/EHOUSE 
EMBASSIES - PLEASE PASS FCS 
DEPT FOR EUR/CACEN, EB/CBA 
ANKARA ALSO FOR CFC/ SNYDER/BALLINGER 
PASS TDA-STEIN, OPIC, EXIM-TUMMINIA/PANARO 
 
E.O. 12958: N/A 
TAGS: KTDB, BBSR, BEXP, BTIO, AM 
SUBJECT: IMI (ARMENIA): HOW TO ESTABLISH AN OFFICE IN 
ARMENIA 
 
-------- 
SUMMARY 
-------- 
 
1.  This cable explains the process of opening a 
business in Armenia.  It describes the varieties of 
corporate structures under Armenian law, the process of 
establishing and registering companies with foreign 
participation, and the practical aspects of renting 
office space, hiring personnel, and obtaining 
government licenses.  It also provides key contacts and 
useful web resources.  End Summary. 
 
 
------------------------- 
LEGAL FORMS OF BUSINESSES 
------------------------- 
 
2.  Foreign investors may choose from a range of legal 
entities through which to do business in Armenia. 
Foreign investors can establish a legal company under 
Armenian law, open a branch or representative office of 
a company established under foreign law, or acquire 
shares in an existing business. 
 
3.  The Civil Code of the Republic of Armenia, provides 
for the following types of legal entities: 
 
-- Sole proprietorship 
-- Limited Liability Company 
-- Joint-stock company 
-- General partnership 
-- Limited partnership 
-- Commercial cooperative 
 
4.  Most small and medium-sized businesses in Armenia 
are sole proprietorships, limited liability companies 
or closed joint-stock companies.  The majority of 
foreign investors register limited liability companies 
and joint-stock companies. 
 
5.  According to the Armenian legislation, an 
enterprise or entrepreneur may not conduct business 
without a registration certificate from the State 
Registry.  For this, the following documents must be 
provided: 
 
-- Application for the registration; 
 
-- The minutes of the meeting founding the company; 
 
-- In case one of the founders is also legal entity, a 
formal decision by that company to participate in the 
subsidiary company; 
 
-- In case one of the founders is foreign legal entity, 
the documents proving its judicial status, as well as 
its founding documents; 
 
-- Two copies of the company's charter; and 
 
-- Receipt for payment of state duties. 
 
6.  Enterprise registration also requires registration 
with the Intellectual Property Agency, the tax 
authorities, and the Social Security Fund. 
 
7.  Registration Procedures: 
 
Step 1.  Pay (at any commercial bank) state duties for: 
a) Registering a legal entity; 
Fee: AMD 12,000 (approximately USD 24) 
b) Registering the company name. 
Fee: AMD 5,000 (approximately USD 10) 
 
Step 2.  Register company name at the Intellectual 
Property Agency by submitting an application to State 
Registry.  This should take about 2 days. 
 
Step 3.  Translate and notarize the founders' 
documents.  Prepare and sign the incorporation 
documents. 
 
Step 4.  Open a temporary bank account.  The bank will 
give you a verification document that you should 
include in your registration packet.  Depending upon 
the type of the company, the following amounts should 
be deposited as the charter capital: 
 
-- Limited Liability Company - AMD 50,000 
(approximately USD 100) 
 
-- Closed Joint-Stock Company - AMD 100,000 
(approximately USD 200) 
 
-- Open Joint-Stock Company - AMD 1,000,000 
(approximately USD 1,000). 
 
Step 5.  Submit the registration application to the 
regional branch of the State Registry.  Registration 
can take up to five days, after which you can collect 
the registration certificate from the State Registry. 
 
Step 6.  Register at Armenia's Tax Service to get a tax 
identification number (TIN).  You will need to submit a 
copy of your company charter and identification 
documents.  Registration normally takes 1-2 business 
days.  There is no fee. 
 
Step 7.  Register with Armenia's Social Security Fund. 
You must do this within 30 days of registering with the 
State Registry or you could face penalties.  Be sure to 
take a copy of your registration certificate, your 
company charter, and your Tax Identification Number. 
There is no fee and you can usually get the social 
security registration certificate on the spot. 
 
Step 8.  Obtain permission from the local police 
departments to apply for a company seal.  Take your 
completed application form, Certificate of State 
Registration, Charter, Tax Identification Number, and 
bank receipt for payment of State Duty for requesting a 
seal.  Permission should take one day.  Fee: AMD 6,000 
(approximately USD 12) plus banking fee. 
 
Step 9.  Order your company seal at "Seal" JSC. 
Duration: 1-30 days depending on design and price. 
Fee: order completion within several hours AMD 21,500 
(approximately USD 43); two-day service costs AMD 
15,500 (approximately USD 31). 
 
--------- 
LICENSING 
--------- 
 
8.  Many businesses require state licenses.  The Law on 
Licensing outlines two types of licensing procedures -- 
simple and compound.  The Ministry of Finance and 
Economy provides simple license within 3 days of 
receiving application.  If you need a compound license 
you must submit a request to the agency that oversees 
your activity.  If your license is not rejected after 
30 days, you can begin your business activity. 
 
-------------- 
LEGAL SERVICES 
-------------- 
 
9.  To simplify the process of registration and avoid 
complications, you may want to use the services of a 
local legal consulting firm.  A list of consulting and 
law firms operating in Armenia is available on BISNIS 
website: 
 
www.bisnis.doc.gov/country/armenia.cfm 
 
-------------------- 
USEFUL WEB RESOURCES 
-------------------- 
 
10.  Foreign investors may obtain the information on 
different aspects of establishing a business in Armenia 
accessing the following local web resources available 
in English: 
 
Social Security 
Registration             www.mss.am 
 
Investor Entry           www.armeniaforeignministry 
 
Licensing                www.aviation.am 
                         www.rcnm.am 
                         www.mfe.gov.am 
Licensing and Real 
Estate issues 
www.cadastre.am 
 
Privatization of land    www.privatization.am 
 
Tax-related issues       www.taxservice.am 
 
Customs                  www.customs.am 
 
Certification            www.sarm.am 
 
------------------- 
OFFICE SPACE RENTAL 
------------------- 
 
11.  Office space is widely available in Yerevan. 
Businesses may choose from among the following types of 
rentals: 
 
-- Two or three storey renovated private houses, 
centrally located with air conditioning and several 
telephone lines.  The monthly rental price for this 
kind of office space is between USD 10 to 15 per square 
meter. 
 
-- Office space available in former or current state 
institutions, buildings of the Academy of Sciences, or 
commercial space in ordinary apartment buildings rent 
for USD 5 to 12 per square meter. 
 
-- Specialized business centers and hotels lease modern 
office space with air conditioning, multiple telephone 
lines and Internet access, security systems, backup 
electric generators, parking lots, reception and 
secretarial support.  The largest providers are the AUA 
 
SIPDIS 
Business Center, SIL Group, Grant Thornton Amyot, Hotel 
Marriott Armenia, Hotel Yerevan, and Ani Plaza. 
Such office spaces costs between USD 15-20 per square 
meter monthly. 
 
-------- 
CONTACTS 
-------- 
 
Real Estate Agencies 
 
AL Tandem 
Tel: (374-1) 589-936 
E-mail: altandem@mail.com 
Website: www.altandem.am 
 
Madatyan and Sons 
Tel: (374-1) 544-666 
Website: www.mrealty.nt.am 
 
Bars 
Tel: (374-1) 561-411 
Fax: (374-1) 523-082 
E-mail: info@bars.am 
Website: www.bars.am 
 
---------------- 
HIRING PERSONNEL 
---------------- 
 
12.  Companies may find local qualified staff via: 
 
-- Recruiting agencies operating in Yerevan.  Their 
services include personnel search and consulting 
services on the labor market. 
 
-- Advertisements in local media; and 
 
-- Website of the local NGO Career Center: 
www.careercenter.am (post job announcements for free). 
 
Average salaries for qualified specialists, net 
USD/month: 
IT sector: 
 
Director, CEO, Head of branch   1,500 - 4,000 
Programmer                        300 -   900 
System administrator              300 -   800 
Accountant, HR specialists        400 - 1,200 
 
Other sectors: 
 
Regional representative           800 - 1,500 
Sales manager                     600 -   800 
Office manager                    200 -   400 
Secretary                         100 -   150 
 
SIPDIS 
 
-------- 
CONTACTS 
-------- 
 
Tanger Recruiting Agency 
33 Moskovyan Street 
Suite 26 
Yerevan-02 
Tel: (374-1) 531-892 
E-mail: tanger@netsys.am 
Website: www.tanger.am 
 
Accept 
4 Byron Street 
Suite 5 
Yerevan-09 
Tel: (374-1) 584-945 
E-mail: accept@port.am 
 
Career Center NGO 
56 Komitas Avenue 
Yerevan-51 
Tel: (374-1) 234-739 
Fax: (374-1) 241-149 
E-mail: mailbox@careercenter.am 
Website: www.careercenter.am 
 
 
--------------------- 
OTHER USEFUL CONTACTS 
--------------------- 
 
Ministry of Justice of Armenia 
8 Khorhrdarani Street 
Yerevan-10 
Tel: (374-1) 582-157 
E-mail: justice@justice.am 
Website: www.justice.am 
 
State Registry Agency under 
the Ministry of Justice 
15 Grigor Lusavorutch Street 
Yerevan-10 
Tel: (374-1) 524-516 
 
Small & Medium Entrepreneurship 
Development National Center (SME DNC) 
5 Mher Mkrtchyan Street, 
Yerevan-10 
Tel: (374-1) 541-648 
Fax: (374-1) 541-642 
E-mail: info@smednc.am 
 
Evans