Foreign business owners and investors appreciate the pace of the economic reforms, Armenia's safety, freedom and openness. There are generally no restrictions on foreign ownership of companies, real property and other assets. Armenia guarantees free repatriation of invested capital and profit. Investment projects are encouraged with tax benefits and government assistance programs. 

Zero-tax status is available to micro-businesses, IT start-ups, companies operating in free economic zones, industrial zones, certain border towns and villages. Other small businesses with annual sales of less than around $220,000 are subject to sales (turnover) tax of only 1.5-5%. Armenia generally does not tax individual's capital gains on the sale of securities, real estate or other assets. Insurance and pension payment are also exempt from taxes. There are no taxes on gifts, inheritance, net worth, etc. Property taxes are very low. 

Investing in Armenia can qualify you and your family members for a residence status (temporary, permanent, or special). Under general naturalization rules, a foreigner may become eligible for Armenian citizenship after three years of residency. 

Vineyards & Orchards

Rates as of Feb. 2022

Bank Deposits

Bonds

Government Subsidies for Agriculture

Agriculture is one of the moving forces of the Armenian economy. However, the full potential of the country is left unrealized, which is why the government has created different subsidy programs to boost selected agricultural sectors. 

Orchards & Vineyards

Fruit farming and wine growing are one of the oldest agricultural sectors in Armenia. Today, more than 60,000 entities are engaged in fruit farming and wine growing. Grape, apricot, and peach cultivation are the most popular forms. Between 1998 and 2016, the territory occupied by orchards doubled, and the yield has increased by 14.5% between 2008 and 2017 due to implementation of innovative technologies.

The government provides two types of subsidies: compensation of costs incurred in setting up a vineyard/orchard or a low-interest rate loan. 

Loan terms:

• Interest rate: 2% (0% for farmer in border communities and cooperatives) 
• Size of the vineyard/orchard: 0.5-100 hectares
• Maximum loan amount:
  
  • Vineyards: $2.9 million 
  • Intensive orchards: $5 million
  • Berry farms: $4.7 million
• Maximum term: 8 years with a grace period of 5 years 

Compensation:

• 50% of costs incurred in setting up the orchard/vineyard
• Size of the vineyard/orchard: 0.5-10 hectares
• Maximum allowable costs:
  • Vineyards: $24,800 per hectare
  • Intensive orchards: $44,800 per hectare
  • Berry farms: $36,700 per hectare

Cattle Farming

Cattle farming adds up to more than 50 percent of the GDP generated from livestock farming and its share is growing. In recent years, both the headcount of cattle and the prices for meat and milk have increased. In comparison to 2016, in 2018 the price of meat and milk increased by 38% and 11% respectively. However, as this sector is dominated by small households and not enough technological solutions are used, the country is not able to utilize the full capacity of this sector.

To boost cattle farming in Armenia, the government developed a project of subsidize agricultural loans that would decrease the financing interest rate from 14% to 2%. In 2018 around 60% of these subsidies were applied to cattle breeding projects. The government also aims to boost purebred breeding and has exempted farmers from VAT on import of such cattle. In 2013-2018 more than 2,000 heads of purebred cows were imported. It is expected that the governmental subsidies will result in importation of more than 10,000 animals in 2019-2024.

Subsidized loan terms:

• The subsidy is designed to decrease the interest rate to 2% for farmers and 0% for farmers residing in border communities.
• The beneficiary can acquire a maximum of 300 heads of purebred cows and the total value shall not exceed $600,000.
• The maximum term of the loan is 5 years.
  

Sheep and Goat Breeding

Sheep and goat breeding is also a traditional animal breeding sector in Armenia. It generates around AMD 50 billion (USD 104 million) of annual revenue, and this number can be doubled if the management of the businesses is improved. This sector focuses on production of food, wool, and leather; it involves low risks and yields high profits. Armenia has a favorable climate and conditions for sheep and goat breeding. More than 50 percent of agricultural land in Armenia are pastures.

Armenia has a high potential for lamb export. During the last four years, more than 20 thousand sheep and more than 2,000 tons of lamb were exported. The main directions for export are Iran, United Arab Emirates, Qatar, Kuwait, and Georgia. That being said, in 2019, the number of sheep and goats was around 640,000, which is about half the number that existed in 1991.

The government has allocated around $6.2 million for a subsidy program to help the farmers acquire sheep and goats. The program will provide 70% co-financing to agricultural cooperatives and 30% to individuals. It is expected that around 30,000 sheep and goats will be acquired thanks to the program. The maximum value of one purebred sheep or goat is set to around $1,000. 

Subsidy terms:

• The subsidy will cover 23% (27% for farmers in border communities) of the actual cost for the acquisition of sheep and goat (excluding transportation costs). 
• The beneficiary can acquire a maximum of 2,000 purebred sheep or goats. The total amount spent should not exceed $1.8 million. 

Small Business Opportunities

Nerses Isajanyan

Managing Attorney
LL.M. Georgetown University
New York Bar | Armenian Chamber of Advocates