Residency for Digital Nomads in Armenia 2024

If you are a digital nomad, freelancer, remote worker, or online business owner looking to become a resident of Armenia, you will need to meet certain requirements. Specifically, you must be engaged in business activities in Armenia, which means registering with the Armenian tax office as a sole proprietor (or register an LLC). However, your work does not have to be connected to Armenia, and there are no requirements to have Armenian clients or suppliers.

It is important to note that you will need to report at least some income and pay taxes in Armenia. The tax rates will depend on your income or sales, with independent service providers typically opting for the "turnover tax" regime, which levies a 5% tax on reported income. Under the "microbusiness" regime, it may be possible to pay 0% tax if your annual income does not exceed around $60,000, though not all types of activities qualify for this treatment. You may also be subject to social (pension) contributions and military stamp duties after your residence permit is issued.

For example, let us say you offer online classes. Since educational services can be treated as a "microbusiness," you will be exempt from taxes on income of up to around $60,000 per year, and you will not have to make social (pension) contributions. However, you will need to pay monthly military stamp duties of $4 to $25 after your residence permit is issued.

On the other hand, if you are a business consultant, consulting services cannot be treated as a "microbusiness," so you will have to pay a 5% turnover tax on your income of up to $296,000. If you report income from consulting services of $1,000 per month, you will pay $50 in turnover tax (5% of $1,000) and a flat fee of $13 in income tax. After your residence permit is issued, you will also need to pay a flat social (pension) contribution of $13 and a monthly military stamp duty of $5. Your total monthly tax bill will be $81 ($50 + $13 + $13 + $5).

If you are interested in obtaining an Armenian residence permit, you will need to follow these steps:

Step 1: Travel to Armenia or mail the necessary documents to Armenia (including a power of attorney and a legalized passport copy or the original passport) if you are applying remotely.
Step 2: Register with the tax office as a sole proprietor and obtain a taxpayer identification number (2-3 days).
Step 3: Report income from business or employment to the tax office and pay taxes (approximately 3-6 weeks).
Step 4: File your residence permit application. If you are applying remotely, you will need to mail your original passport. The passport will be returned to you after a few days (1-2 days or approximately 2-3 weeks for remote applications).
Step 5: Wait for your residence permit application to be examined and approved (30-50 days).
Step 6: We will collect your residence permit and have it delivered or mailed to you (1 day).

The whole process typically takes between two to four months, depending on the type of application (remote or in-person) and your individual circumstances.

To apply, you will need a valid passport, and a medical check certificate and photographs may also be required. You will not need to provide proof of address or employment, police clearance certificates, bank account statements, reference letters, health/travel insurance, or tickets.

Keep in mind that you will need to budget for legal fees, as well as other expenses like government fees, mailing, translation, and notarization. For more information, feel free to contact us.

If you are applying for an Armenian residence permit, your lawyer or representative can file the application remotely. However, on the day of the application, we will need to present your original passport to the immigration officer. This means that if you are applying remotely, you will need to mail your passport to Armenia via a courier service like FedEx, DHL, or UPS for a few days. Your passport will be mailed back to you immediately after the application is filed.

If you hold an Armenian residence permit, your immediate family members may also be eligible for residency. Specifically, you can sponsor your spouse, your children (whether they are minors or adults, with no age restrictions), and your parents (also with no age restrictions). You do not need to demonstrate that your family members are financially dependent on you.

Furthermore, if you have a permanent (long-term) or special residence permit, you can also sponsor your siblings, grandparents, and grandchildren.

Applications for temporary (1-year) or permanent (5-year) residence permits must be filed at the Immigration Office. Please note that Armenian embassies typically do not process residence permit applications, except in the case of a special 10-year residence permit.

To apply, you will need a valid passport, and a medical check certificate and photographs may also be required. You will not need to provide proof of address or employment, police clearance certificates, bank account statements, reference letters, health/travel insurance, or tickets.

It is important to note that obtaining a residence permit (temporary, permanent, or special) does not automatically make you a "tax resident." Tax residency is regulated by tax laws, not immigration laws. In general, you become a tax resident of Armenia by spending more than 183 days in the country in a year. This means that it is possible to hold a residence permit without becoming a tax resident, and vice versa.

Please be aware that if you are employed as a worker or are a "private entrepreneur" in Armenia, you may be required to begin making social (pension) and military contributions once you have obtained your residence permit.

Armenia does not typically tax individuals' capital gains on the sale of securities or real estate, or other assets, regardless of whether those gains are generated in Armenia or elsewhere. Certain forms of income, such as insurance and pension payments, are also exempt from taxes. Additionally, there are no taxes on gifts, inheritance, or net worth.

However, there is no general rule that exempts a tax resident from paying taxes on income generated outside of Armenia.

You may also be able to obtain documents such as proof of registered address in Armenia, a social security number, a taxpayer identification number, a tax residency certificate, or a certificate of permanent residency.

Taxpayer Identification Number
Individuals receiving profits from commercial organizations are mandated to obtain a Taxpayer Identification Number (TIN). This is imperative, as the distribution of profits entails the obligation to remit income tax on dividends, necessitating the possession of a TIN for tax payment purposes. Furthermore, certain foreign banks may request the Taxpayer Identification Number as a means to authenticate their association with the Republic of Armenia.
The application process primarily involves the submission of a TIN application along with a copy of the passport.

Tax Residency Certificate
In general, an individual can become a tax resident of Armenia if their stay in the country extends to 183 days or more. Alternatively, a petition can be submitted to the tax office to procure a tax residency certificate, even if the stipulated duration of 183 days is not met. However, the application must substantiate that the center of vital interest is situated in Armenia, signifying that personal or business affiliations with Armenia outweigh those with any other country. It is crucial to note that such certificates are issued exclusively for a specific tax year and explicitly cite the pertinent double tax treaty.

To initiate the application for a tax residency certificate, the applicant is required to submit a comprehensive set of documents. These include statements detailing income from foreign sources, copies of all passport pages, a calculation table reflecting the individual's presence within the Republic of Armenia, or a written justification outlining the localization of the center of vital interests within the territory of the Republic of Armenia, supported by relevant documentation.

The issuance of the tax residency certificate is typically completed within two business days.

The government fees for obtaining a residence permit vary between $270 to $390, depending on the type of permit. Immediate relatives of Armenian nationals are generally exempt from paying government fees, and reduced rates apply to US nationals. In the event that the application for a residence permit is rejected (but not if withdrawn by the applicant), the government fees are refundable.

Please be aware that in addition to government fees, you may also incur expenses related to document translation, medical checks, photographs, etc. If you plan to hire a lawyer to represent you before the immigration authorities, legal fees will also apply.

Residence permits must be renewed (extended) periodically. Temporary permits can be renewed annually, while permanent (long-term) and special residence permits can be renewed every five and ten years, respectively.

The application for renewal must be submitted no later than 30 days before the expiration of the current permit. In the case of special permits, it is recommended to apply at least 60 days before the expiration. If there are family members (dependents), the main applicant should apply even earlier to allow sufficient time for processing both their own and their dependents' applications.

Please note that currently, the Immigration Office requires all appointments to be scheduled in advance through an online booking system (https://e-request.am/en). The waiting periods for these appointments may range from a few weeks to even longer, so it is important to consider this factor when planning for an extension.

The renewal procedure is similar to that of the initial application. For instance, a business owner would still need to be interviewed by an immigration officer and show proof of active business operations, among other requirements (refer to section 3 above for further information).

There are no restrictions on the number of times a residence permit can be extended, and there is no requirement to spend a particular number of days in Armenia to extend the residence permit. Moreover, it is possible to apply for an extension remotely.

If you have been living in Armenia permanently for the past three years, you are eligible to apply for Armenian citizenship. However, the term "permanent resident" is not clearly defined by the Citizenship Law. In practice, the police will accept and process a citizenship application if the applicant has maintained an Armenian residence permit (temporary, permanent, or special) during the three-year period.

In addition to the residency requirement, you will need to pass a test on your knowledge of the Armenian Constitution. This is a multiple-choice test with 33 questions, and you only need to answer 17 of them correctly to pass. The test is administered in Armenian, and you will be asked to fill out a biographic form in Armenian as well. This means that you may need to spend some time (perhaps a couple of months) learning basic Armenian.

It is important to note that meeting the above requirements does not guarantee that your citizenship application will be approved. If your application is rejected, you can reapply after one year. Additionally, if your application is rejected, you can appeal the decision in court. However, administrative court proceedings are likely to take up to one year or even longer.

Vibrant expatriate groups such as the Armenian Repatriates Network and Expats in Republic of Armenia provide excellent resources for networking and integration.

According to official statistics published by the Cadastral Office, the real estate market in the center of Yerevan has demonstrated significant growth. From April 2023 to March 2024, average prices per square meter in the city center rose from $2,102 to $2,295, reflecting a 9.2% annual increase. This steady upward trend is part of a larger surge observed over the last decade, where prices soared from $1,021 in 2012 to $2,073 in 2023, totaling a 103% increase. This growth was particularly marked by a dramatic 42.4% rise from 2021 to 2022.

The process of purchasing a property in Armenia is efficient and quick, with the country ranking 13th out of 190 countries on the World Bank's "Registering Property" index. It is even possible to buy properties remotely without visiting the country.

Armenia does not have gift or estate taxes, and capital gains on the sale of real property by an individual are generally not taxed. Property tax rates range from 0% to 1% of the cadastral value, which is normally significantly lower than the market value. Stamp duties are not applicable, and only small official fees are paid, which do not depend on the value of the property. Rental income up to 60 million Armenian drams (approximately $155,000) per year is taxed at 10%, and rental income exceeding that amount is taxed at 20%.

Foreigners can own 100% of real estate in Armenia, and they have the same rights as locals to acquire, hold, lease, sell, bequeath, and otherwise dispose of their property. There is no need for foreigners to have a residence permit or any other links to Armenia. Overall, the real estate market in Armenia offers great opportunities for foreign investors seeking to diversify their portfolio and take advantage of a growing economy.

You might want to consider buying off-plan property from real estate developers and see non-taxable capital gains of 20-30% after the construction is completed. There are many construction projects to choose from, and you can find more information on websites such as ArmEconomBank, ACBA Bank, Inecobank, Ameriabank, Red Invest Group, and Construction.am.

Armenia has a well-established banking system, with 18 privately owned banks regulated by the Central Bank. Among them, HSBC is an international bank, while many local banks have foreign capital from countries such as Russia (VTB), France (ACBA), Lebanon (Byblos, ID), Argentina (Converse), Iran (Mellat), and others. Armenian banks offer modern banking services, including online and mobile banking, debit and credit cards (Visa, MasterCard, AmEx), accounts in various currencies (USD, EUR, CHF, GBP, CAD, AED, RUR, JPY), gold metal accounts, wealth management, private banking, and safety deposit boxes. They also have low charges, strong privacy, and high-quality customer service.

In Armenia, individuals are not required by law to have health insurance. However, all six licensed insurance companies offer health insurance, with annual rates usually ranging between $300 to $600 per person. These companies are SIL Insurance, Liga Insurance, Nairi Insurance, Ingo Armenia, Reso, and Armenia Insurance.

Setting up an LLC in Armenia is a quick and uncomplicated process, which can be completed entirely remotely. There are no limitations on foreign ownership or management of companies, no minimum investment requirements, and no renewal fees to worry about. Shareholders are afforded limited liability and can utilize the LLC structure for purposes of asset protection or tax optimization. Armenia also boasts favorable tax regulations for small businesses, with many being completely exempt from taxes. Furthermore, IT companies can benefit from special tax incentives.

Benefits: Registering an LLC in Armenia has several advantages, including:

• Fast registration process (typically within a couple of days)
• Shareholders enjoy limited liability
• Minimal documentation requirements (only passports are needed)
• No restrictions on foreign ownership or directorship
• No minimum capital requirements
• No need to engage local partners, agents, managers, secretaries, etc.
• Permanent existence with no renewal fees
• Bank accounts available in various currencies
• No restrictions on repatriation of profits and capital

For more information, please see the page on incorporation.

Taxation: Armenia offers favorable tax rates for small businesses. Many types of businesses with annual sales below AMD 24 million (equivalent to around $62,000 as of March 2023) are exempt from income tax. Other businesses with annual sales below AMD 115 million (around $297,000) are also exempt from income tax but are subject to a sales tax (turnover tax) of 5% or less. Newly registered IT companies and firms operating in free economic zones, industrial zones, and certain border towns and villages are also eligible for tax exemptions.

An LLC registered in Armenia is considered a tax resident of Armenia and is taxed on its worldwide income. Tax rates are generally the same regardless of whether income comes from Armenia or another country.

Asset Protection: An Armenian LLC can be used as a holding company for assets. Setting up a tax-exempt "microbusiness" LLC can be advantageous for receiving passive income, such as dividends, of up to AMD 24 million (around $62,000) annually. Additionally, income from the sale of financial assets is not subject to taxation, regardless of the amount. However, it is important to avoid being classified as an "investment company," which requires licensing.

While it is possible to use an LLC to own real estate in Armenia or other countries, Armenian tax laws generally make it more beneficial to own such property as an individual to avoid capital gains tax on sales between individuals.

Armenian law does not recognize trusts, so assets are typically held through an LLC or other corporate structures such as a joint-stock company, foundation, or consumer cooperative. Nominee and corporate shareholders and directors are allowed, but companies must file annual statements disclosing the ultimate beneficial owners (UBO).

Foreigners can get married in Armenia without any requirement to live or have ties to the country. The registration process is typically quick and can be completed in as little as two business days. However, both individuals need to provide a "non-marriage" certificate from their country of permanent residence to confirm their marital status. If a non-marriage certificate cannot be obtained, an affidavit may be used instead. These documents must be legalized, either by Apostille or consular legalization, and translated into Armenian before they can be submitted to the Armenian Ministry of Justice. Remote registration with a power of attorney may also be possible.

Obtaining an Armenian driving license is a two-step process that involves taking a computer-based driving theory test and a practical driving test. The theory test questions are available in Armenian, Russian, English, Arabic, and Farsi. There are a total of 1,116 questions, and the test consists of 20 questions with only two incorrect answers allowed. To register for the test, you can visit the website roadpolice.am and wait for notification about the time and place of the test. If you pass the theory test, you will be allowed to take the driving test immediately. In addition, it is possible to exchange your foreign driving license for an Armenian one if your license is issued by a country that is party to the 1968 Vienna Convention.