Corporate Maintenance Requirements in Armenia: Essential Compliance Tasks for Your Armenian Entity

Failing to maintain proper corporate records in Armenia can result in various negative consequences. These may include administrative fines for non-compliance, penalties for late or inaccurate tax filings (up to 5% of unpaid tax amount for each 15-day period of delay), increased scrutiny from regulatory authorities, and potential personal liability for directors and officers in serious cases. Inadequate record-keeping can also create operational challenges such as difficulty enforcing contracts, obstacles in corporate transactions, problems obtaining licenses or permits, and challenges in accessing financial services. Additionally, failure to publish required financial statements can result in administrative fines of up to 50 times the minimum salary for first offense, increasing to 500 times for repeat offenses.

Yes, Armenian law increasingly recognizes electronic records as legally acceptable, provided they meet certain requirements for authenticity and integrity. Businesses should implement proper security measures and backup systems to prevent data loss and use digital signatures where required by law. For official submissions to government authorities, electronic filing systems are now available and often mandatory, particularly for tax filings and corporate reports. The e-invoicing system is required for VAT-registered businesses. However, some documents may still require physical copies with original signatures for certain legal proceedings or official registrations, so it's advisable to check specific requirements for different types of records, especially for regulated industries.

Foreign companies operating in Armenia through branches or representative offices must comply with specific record-keeping requirements. They must maintain documents confirming the establishment of the branch or representative office, power of attorney for the head of the local operation, internal regulations, records of activities conducted within Armenia, and correspondence with the parent company. While the core record-keeping principles are similar to those for domestic companies, foreign entities may face additional requirements related to their foreign status, such as maintaining documentation of their relationship with the parent company and any cross-border transactions. Additionally, foreign companies should be prepared to provide Armenian translations of key documents for submission to local authorities and may need to engage local professionals familiar with Armenian compliance requirements to ensure proper maintenance of records and timely filing of reports.

A corporate secretary is not strictly mandatory for all Armenian companies, but it is recommended by the Armenian Code of Corporate Governance, particularly for medium to large companies and those with international connections. The appointment of a corporate secretary is considered a best practice for ensuring proper maintenance of corporate records and overall governance compliance. For smaller companies that may not justify a dedicated corporate secretary position, the functions can be assigned to a qualified individual who handles other responsibilities as well. What's crucial is that someone has clear responsibility for maintaining proper corporate records and facilitating governance processes. Public interest entities and companies seeking to attract investment may find particular value in appointing a formal corporate secretary to strengthen their governance practices.

If your company exceeds the size thresholds during a fiscal year, you don't immediately become subject to the higher category's requirements. Classification changes only when you exceed the thresholds for two consecutive years. However, it's good practice to begin preparing for the eventual change in requirements once you cross a threshold for the first time. This preparation might include upgrading accounting systems to accommodate more comprehensive reporting, engaging with potential auditors if an audit will be required, and establishing more robust governance processes. Planning ahead allows for a smoother transition when the new requirements do become mandatory and helps avoid last-minute compliance challenges that could disrupt operations or result in penalties.

Unlike some countries, Armenia generally does not provide automatic extensions for filing deadlines. However, in exceptional circumstances (such as force majeure events), companies can petition the State Revenue Committee for an extension. These are granted on a case-by-case basis and should not be relied upon for regular compliance planning. It's always best practice to prepare well in advance of deadlines to ensure timely submission of all required filings. If you anticipate difficulty meeting a deadline, it's advisable to consult with local legal counsel or tax advisors as early as possible to explore available options and minimize potential penalties.