How to Register a Sole Proprietorship in Armenia
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Armenia is divided into ten provinces, with the city of Yerevan having special administrative status as the country's capital. Armenia's economy grew by 6.2 percent in 2020, the largest recorded growth since 2007, while between 2012 and 2018, GDP grew 40.7%, and key banking indicators like assets and credit exposures almost doubled. With that said, Armenia is a great place to start your business.
Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.
Sole proprietorship in Armenia
A sole proprietorship is the simplest form of business organization. It represents a business entity owned and managed by a single person, or in some cases married couples. The main characteristic is that there is no distinction made between the owner and the company. This means the owner is fully liable to the business debts and obligations to the extent of thier assets.
How to register a sole proprietorship in Armenia
Registration of a sole proprietorship is conducted by the State Register of Legal Entities under the Ministry of Justice of the Republic of Armenia. Business registration can be approved within two days of the date of submission of the required documents. An online registration platform is also available. The registration fee for Sole Proprietorship costs 3,000 Armenian Dram.
For registration, you are required to submit the following documents:
- Passport or ID and its copy
- The document confirming the payment of state duty (payment receipt or payment made through the electronic payment system)
- The name of the newly established business
- Address of the business
Registration property in Armenia requires:
- A special reference on restrictions on the property at the State Committee of the Real Estate Cadaster of the Republic of Armenia (SCREC);
- The stamp duty paid and the sale-purchase agreement notarized and approved by a notary
- A registration certificate issued by the local office of the SCREC
Business name registration
A company registered in Armenia must have a business name (firm name) to which it has exclusive rights. The business name shall consist of a distinguishing word or expression (common or proper name, fictitious name, or sequence of letters) and the company's corporate form (e.g., ACME LLC). A business name can be changed, but it cannot be assigned to another person unless the company reorganizes.
The use of the words Armenia, Armenian, Arm, the names of Armenian regions, cities, villages can only be used with the approval of the national or local authorities. The annual government fee for using the words "Armenia" or "Armenian" is AMD 600,000 ($ 1,233). Moreover, a business name cannot contain words such as bank, insurance, notary, etc., without a special license or permit.
A business name cannot be identical or similar to a business name or trademark previously registered in Armenia. Name searches can be conducted in advance of registration at the websites of the State Registry and the Intellectual Property Agency. While a business name grants its holder exclusive rights to use it, the founder should also consider registering a trademark for higher level of protection. The business name registration is done in person in the State Registry.
Taxpayer and VAT registration in Armenia
These are the documents needed for the tax registration:
- National ID card
- ID card reader
- Online payment receipt
The tax registration is done under the legal justification.
The standard Value-added tax (VAT) in Armenia is 20%. Turnover tax (TT) is a substitute for VAT and profit tax for sole proprietors. The tax object is the return on sales of goods and services delivered by the TT payer during the reporting period, as well as other received income. The reporting period for this tax is every three months.
If looking to hire independent contractors in Armenia, visit this page to learn more about how to do it compliantly.