How to Register a Sole Proprietorship (Ինդիվիդուալ ձեռնարկատեր) in Armenia

If you’re wondering how to register a sole proprietorship in Armenia, the good news is that the process is quick and affordable. Armenia offers one of the easiest business registration systems in the region, making it an attractive choice for freelancers, contractors, and independent professionals.

Setting up as a sole proprietor is low-cost and requires minimal paperwork, but there are still important steps to follow, such as choosing the right tax regime and selecting an eligible business name. The process is accessible to both Armenian citizens and foreign nationals, and in many cases, you can complete registration in just a day.

The biggest advantage is the flexibility and independence you gain as a self-employed professional. The main drawback is unlimited liability, since your personal assets remain tied to your business obligations. Still, for many, the speed, simplicity, and freedom of working as a sole proprietor make it the best option.

Disclaimer: This article is for informational purposes only and is not a substitute for legal advice. Please always check official sources or seek professional guidance before taking action.

What is a sole proprietorship in Armenia?

In Armenia, a sole proprietorship is officially known as an Ինդիվիդուալ ձեռնարկատեր (Individual Entrepreneur, IE). Whether you hear the term sole trader, self-employed worker, or independent contractor, these all describe the same legal setup: one person operating a business without forming a company.

If you’re researching how to register a sole proprietorship in Armenia, understanding this definition is the first step.

How does a sole proprietorship (Ինդիվիդուալ ձեռնարկատեր) work in Armenia?

Sole proprietorship (Ինդիվիդուալ ձեռնարկատեր) vs. LLC in Armenia

When deciding how to register a sole proprietorship in Armenia, it helps to compare it with the main alternative: setting up a Limited Liability Company (LLC). The table below highlights the key differences so you can choose the structure that best fits your needs.

Step-by-step: How to register a sole proprietorship in Armenia

Step 1: Check your eligibility

In Armenia, to register as a sole proprietor, you must have full legal capacity, which means being at least 18 years old, mentally competent (not declared incapable by a court), and not legally restricted from entrepreneurial activity—for example, due to a bankruptcy ruling. Foreign nationals and stateless persons are also eligible to register as sole proprietors, but in addition to registration, they must hold the appropriate residency status or work permit to legally conduct business activities in Armenia.

Step 2: Choose your business name

The name must be unique and comply with Armenian naming rules. You can use your own name or register a trade name.

Step 3: Gather required documents

Before you begin, prepare your ID, proof of state duty payment, and any necessary forms. This ensures a smooth process when you register your sole proprietorship.

To register as an Individual Entrepreneur / Ինդիվիդուալ ձեռնարկատեր in Armenia, you must prepare the following documents:

• Passport or identification card, with a notarized Armenian translation if you are not an Armenian citizen
• Proof of state duty payment, such as a payment receipt or confirmation via the e‑payments system

Step 4: Register with the Agency

File your application through the e-Register portal or in person. If you’re registering online, you’ll need an electronic signature.

Step 5: Pay registration fees

A state duty of AMD 3,000 applies. Payment can be made online or in person, and confirmation is needed before approval.

Step 6: Complete post-registration obligations

Register for taxes and submit your application for your chosen tax regime within 20 days of registration through the State Revenue Committee (SRC). Once you are registered, you must issue proper invoices (tax receipts) for all business transactions. These invoices must include your Taxpayer Identification Number (TIN) and comply with Armenian tax rules. If you are under the turnover tax or general regime, invoices are reported through the SRC’s electronic system. Even microbusiness sole proprietors, while exempt from most taxes, are still required to issue invoices to clients as proof of transactions.

Financial and tax obligations for sole proprietors in Armenia

You are responsible for:

• Income tax: Sole proprietors in Armenia are taxed under one of three regimes. Under the general system, profits are taxed at a flat rate of 20% personal income tax. Under the turnover tax regime, a simplified tax applies on gross revenue, ranging from 1.5% to 10%, depending on business activity, for turnover up to AMD 115 million. The microbusiness regime exempts eligible sole proprietors from profit tax, VAT, and turnover tax, with only a symbolic monthly contribution of AMD 5,000 per employee. Applications for tax regime selection must be submitted to the State Revenue Committee (SRC) within 20 days of registration.
• VAT: The standard VAT rate is 20% under the general system. Sole proprietors under the turnover tax or microbusiness regimes are exempt from VAT. VAT returns, where applicable, are filed electronically with the SRC, usually on a quarterly basis.
• Social security contributions: Sole proprietors are not automatically covered by state pension or health contributions. However, if they hire employees, they must register with the SRC and pay mandatory income tax, pension, and social contributions on their behalf. Independent entrepreneurs must arrange their own pension savings and insurance if they want coverage.
• Record-keeping: You must keep accurate records of income, invoices, receipts, and expenses. Documentation must be retained for at least five years and submitted electronically through the SRC’s online system where required. Even microbusiness sole proprietors must issue compliant invoices for each transaction.
• Tax incentives: Armenia offers a highly favorable environment for small entrepreneurs. The microbusiness regime effectively eliminates most taxes for small-scale activities. Certain sectors, such as IT startups, may also qualify for reduced rates (sometimes as low as 1% turnover tax) under special government incentive programs.

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FAQs

What is the minimum capital required to start an Ինդիվիդուալ ձեռնարկատեր in Armenia?
None—no capital is required for registration.

Do Ինդիվիդուալ ձեռնարկատեր need to register for VAT/GST?
Only under the general regime. If using microbusiness or turnover tax, VAT is replaced with simplified rates or exemptions.

How much are the standard contributions?
The registration fee is AMD 3,000. Microbusinesses pay AMD 5,000 per employee; turnover tax varies by rate; the standard regime includes income and VAT.

Can an Ինդիվիդուալ ձեռնարկատեր hire employees?
Yes, you must register with SRC for employment and make the appropriate social and tax contributions.

How long does it take to register as an Ինդիվիդուալ ձեռնարկատեր?
Registration can be online (with e-signature) in less than a day or 1-2 business days in person.

Can foreign nationals register as an Ինդիվիդուալ ձեռնարկատեր?
Yes—foreigners and stateless persons are eligible for registration and subsequent tax regimes.

Do Ինդիվիդուալ ձեռնարկատեր need a separate business bank account?
Not mandatory, but strongly recommended for income management and compliance.

What happens if I stop working as an Ինդիվիդուալ ձեռնարկատեր?

Submit a deregistration application to the Agency. There is no fee, but you remain liable for pending tax or reporting obligations.

Are there government incentives or reduced rates for new Ինդիվիդուալ ձեռնարկատեր?
Yes—note the microbusiness exemption and turnover tax simplifications; tech businesses may benefit from up to 1% turnover tax.

Can I use Deel as an Ինդիվիդուալ ձեռնարկատեր?
Yes—Deel allows them to receive international payments, generate compliant invoices, access contract templates, and benefit from perks like insurance and retirement plans.