Residence by Investment
Armenia's immigration-friendly laws make it possible to invest in safe assets, such as vacation property, to acquire short-term or long-term residence status. With a low-risk investment you can become an owner of a beautiful vacation property and get a temporary residence permit. Larger investments may qualify you for long-term (five years) and special (ten years) residence.
These upscale villas are located in Tsaghkadzor (valley of flowers in Armenian), the most sought-after vacation destination in Armenia. Together with Marriott hotel they form a single recreational unit with common security and service. Residents enjoy a great view of the mountains and the XI century Kecharis church and have access to Marriott's facilities, including restaurant, casino, bar, swimming pool, shops etc.
Tsaghkadzor is located 50 kilometers north of the capital Yerevan. Surrounded with alpine meadows, the town is situated at a height of 1,841 meters above sea level. Summers in Tsaghkadzor are characterized with mild climate, while winters are cold and snowy. The skiing season in Tsaghkadzor normally starts in mid December and stretches well into March with the top slopes often fit for skiing in April. The infrastructure of tourism is highly developed in Tsaghkadzor, which is the second Armenian city after Yerevan to have the largest number of hotels.
Fractional Ownership of Vacation Property
Most people either cannot afford the type of vacation property they want or reason that they would not use the vacation home often enough to justify the expense. Fractional (shared) ownership provides a solution to these problems by allowing each co-owner to pay only a fraction of the costs and ongoing expenses of vacation home ownership.
With fractional ownership you have a percentage ownership in the property. If the property goes up in value, your share of the pie also becomes more valuable. You may make personal use of the space or let family members or friends use it. When not using your place yourself, renting it out through the property management company is a great way to help offset expenses.
Q&A: Property & Ownership
What exactly will I own? How does fractional ownership work?
Instead of being owned by a single owner, the vacation property belongs to multiple owners. You will be the co-owner of the property, and the size of your share will depend on the amount of your investment.
Usage rights are allocated based on time. Each co-owner is assigned the right to use the property during a specific number of weeks each year. The usage periods are variable as they change every year through annual rotation.
Can I earn rental income?
You may choose to exercise your usage rights by staying at the vacation property in person or letting your family or friends stay there.
Will the property appreciate over time?
The nature of investment in real estate is such that we cannot guarantee a certain return on investment or the safety of it. However, according to the official statistics, the real estate market has been growing in Armenia over the last few years, and the prices for housing in the resort town of Tsaghkadzor are second highest in the country, after the capital Yerevan. According to the official numbers, average property prices in Armenian regions increased by 26.6% in 2018.
What is the economic/touristic growth potential?
Tsaghkadzor is a fast-growing resort hosting 50,000-60,000 tourists in winter season alone. During winter, the occupancy rate of hotels often exceeds 90%.
What are the main features of the property?
Investment properties are upscale villas in the ski resort town of Tsaghkadzor, the most prominent vacation destination in Armenia.
The total area of the house is 240 sq. m. (2,580 sq. ft).
How usage rights are allocated?
Allocation is based on "rotating season - floating week" schedule. This arrangement rotates the seasons during which you can use the property each year based on a fixed year schedule. For example, your first year usage might be for high season (July-August, December-January), second year usage will be for middle season (June, September, February-March), third year usage would be for low season (April-May, October-November). In year four, the cycle would start again and repeat.
With a "floating week" you select a non-specific week (or weeks) within a season (e.g. high, middle, low). In other words, you may use your rights during the entire season. Accommodations are reserved on a first come, first serve basis.
"Rotating season" allows owners an opportunity to use the resort during every season, ensuring that everyone gets a chance to visit the resort during the most popular seasons.
How is the ownership legally structured?
The vacation property is owned by a company - a special purpose vehicle (SPV) the only function of which is to hold the title to the property. Each investor acquires shares in the SPV, corresponding to the amount of his/her investment.
Owning a vacation home as an SPV company offers several advantages, including (i) protection of personal assets from liabilities arising from fractional ownership, (ii) protection of the shared property from seizure by creditors of co-owners, (iii) increasing flexibility for ownership changes.
Who will manage the property? How it will be managed?
The daily management of the property will be carried out by a professional management company with 10+ years of experience and over $6M of assets under management. Decisions requiring the majority (or super-majority) of the votes of co-owners (shareholders) are those involving major physical changes to the property, large expenditures, changing usage rights allocations, selling the entire property and other particularly important matters.
Do I have to pay annual dues?
Yes, the annual dues are used to cover operating expenses, including, property tax, insurance, maintenance, repairs, improvements, utilities, cleaning, accounting and management. Annual dues also fund reserves for long-term recurring expenses such as painting, roofing, system upkeep, and furniture and appliance replacement.
Operating expenses are usually divided in proportion to ownership, so that a 20% owner will pay 20% of each of these expenses. Rental income would be offset against expenses.
How can I sell my share and exit the investment?
Your shares are freely transferable and you may sell, donate, bequeath or otherwise dispose of them. Also, the vacation property may be sold in its entirety, provided that the sale is approved by the 3/4 vote of all the co-owners.
Do I have to pay taxes?
If you sell your share in the property you will not pay any taxes, including capital gain taxes, even if you sell the share at a gain.
Income in the form of dividends is currently subject to 10% withholding tax, however this rate is set to be lowered to 5%.
Benefits of Fractional Ownership
With fractional ownership buying an expensive property is more affordable; you only pay for what you use
The costs of ownership are lower than the costs of renting a unit or staying in a hotel in the same resort area
As a buyer of property you will enjoy pride of deeded ownership, guaranteeing that you will have a great place to vacation for many years to come
As a property owner you will not be affected by inflation, and your vacations will be locked in at today's affordable prices
Q&A: Investment & Residence
What are the benefits of getting a residence permit in Armenia?
An Armenian residence permit grants you and your family members the right to unrestricted stay in Armenia, a free and open, democratic country with rich history and traditions, beautiful nature, and a very low crime rate. Residents can travel visa-free to Armenia and engage in any lawful activities, such as doing business, working (without a work permit), studying or simply retiring. A resident may invite other foreigners to Armenia. Residents enjoy constitutional rights and freedoms, including rights to healthcare, social security, education, property and privacy rights, freedom of speech and religion. Armenian residents are not obliged to serve in the military.
If you wish to travel to other countries, holding a residence permit may be required to apply for a visa at an embassy in Armenia. However, the residence permit itself does not grant you the right to travel to other countries.
After how many years of residency I will get an Armenian passport?
You may be eligible to apply for Armenian citizenship after three years of residency. The decision is normally made in 6-8 months after you apply. The law does not require that you stay in Armenia for a certain number of days. On the other hand, you will have to take a test on the knowledge of the Armenian Constitution in Armenian language, which presumes that you will have to show at least an elementary knowledge of Armenian language. Also, you have to keep in mind that each applicant's case is examined separately and citizenship is not issued automatically.
What is the step-by-step process and the timeline?
The package of documents is emailed to the Investor
Investor examines the documents, signs them and mails a copy back to Vardanyan & Partners (V&P)
Investor transfers the amount of investment to the bank account of the holding company (special purpose vehicle - SPV) and acquires a share equal to the investment.
SPV uses these funds to make a temporary investment in safe and liquid assets (such as publicly traded corporate or government bonds)
Investor comes to Armenia. Residence permit application is filed
Residence permit application is examined and approved
V&P collects the residence permit and mails it to Investor
The funds invested in SPV are used to acquire the property, finish, renovate and equip it. The management of the property is handed over to the management company.
Est. by Mar. 31, 2020
How much am I required to invest?
The minimum amount of the investment is $19,950.
What documents do I have to provide?
The only document you will have to present is a valid passport. There are NO requirements to provide proof of address documents, police clearance certificates, bank account statements etc.
Is it 100% guaranteed that my residency will be approved?
The investment is structured in a manner to qualify you and your family members for residency. While we cannot guarantee the approval because certain factors (e.g. background checks conducted by security agencies) are beyond our control, your investment will not be tied up in real estate until your residence permit application is granted. In other words, in the unlikely event that your residence permit is not granted the amount of investment will be returned to you within a short period of time.
What is the legal basis for the program?
The legal basis of the program consists primarily of the relevant provisions in the Law on Foreigners (Law No. 47 of Dec. 25, 2006, Official Gazette No. 3 (530) of Jan. 24, 2007, item 109) and the Law on Citizenship (Law No. 16 of Nov. 6, 1995, Official Gazette No. 1995/8).
In particular, the Law on Foreigners provides that foreign individuals engaged in entrepreneurial and economic activities in Armenia may be granted temporary resident status (art. 15(1)(e)), permanent resident status (art. 16(1)(b)), or special resident status (art. 18(1)).
What other expenses I will have to incur throughout the process?
In addition to the amount of investment your budget will consist of legal fees and travel expenses. Please contact us for more information.
Key Benefits of Residence
Residence in 30 Days
Get your residence permit in only 30 days
No Minimum Stay
You are not required to live in Armenia to maintain the permit
Immediate and extended family members covered
Valid for 1 year
Issued in 30-45 days
Family covered: spouse, parents, sons and daughters
Citizenship possible after 3 years
Valid for 5 years
Issued in 30-45 days
Family covered: spouse, parents, sons and daughters, siblings, grandparents and grandchildren
Citizenship possible after 3 years
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