IMI (ARMENIA): HOW TO ESTABLISH AN OFFICE IN

UNCLAS SECTION 01 OF 05 YEREVAN 000189

SIPDIS

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E.O. 12958: N/A
TAGS: KTDB BBSR BEXP BTIO AM
SUBJECT: IMI (ARMENIA): HOW TO ESTABLISH AN OFFICE IN
ARMENIA

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SUMMARY
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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.


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LEGAL FORMS OF BUSINESSES
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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).

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LICENSING
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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.

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LEGAL SERVICES
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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

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USEFUL WEB RESOURCES
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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

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OFFICE SPACE RENTAL
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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.

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CONTACTS
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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

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HIRING PERSONNEL
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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

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CONTACTS
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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


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OTHER USEFUL CONTACTS
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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