Ecosystem

Armenia’s high-tech sector has demonstrated significant growth and a rapidly developing Startup Ecosystem: dozens of local startups enter the international market while key global players open their branches or R&D centers in the country. The economy efficiently translates innovation inputs into outputs, with several niches of excellence, such as ICT services. Thus, there are over 2000 ICT companies operating in Armenia currently, and the industry income is continuously increasing year by year.

DOMESTIC MARKET

  • Armenia’s international trade in high-tech sectors is dominated by ICT services
  • The Government of Armenia has declared the IT sector a priority: incubators and hackathons, venture capital, acceleration as well as international technical assistance programs are proliferating in the country
  • As of 2019, tech industry employees have the highest salary in Armenia, which is monthly $1,219 on average
  • However, the cost to employ high-quality and creative workforce is highly competitive than in developed countries
  • The number of individuals working in the IT sector was 29.000 in 2021

BUSINESS ENVIRONMENT

  • Company registration in Armenia can be done in 1-3 business days
  • Since 2011, the online platform (available also in English and Russian) allows registering a legal entity
  • Setting up a corporate bank account unusually takes a day with the minimum documents required – passports of the shareholders and directors
  • 100% foreign ownership permitted in Armenia (except land)
  • No restrictions are applied on remittance and staff recruitment
  • Five-year investment protection is applied from changes in the legislation
  • No profit tax and reduced income tax rate (10%) are applied to certified startup IT companies with up to 30 employees
  • The companies whose annual turnover doesn’t exceed 115 million AMD can pay turnover tax which replaces profit tax and VAT
  • Armenia is a member of the World Trade Organization (WTO) since 2003 

INVESTMENT CLIMATE

  • Armenia has one of the most open investment regimes in the region: no screening and no specific authorization required for making an investment
  • There is a favorable climate for foreign direct investments, especially in the ICT sector 
  • The special platform makes Armenia’s IT sector and its companies accessible and transparent to foreign investors
  • The country has a talented workforce with tech education and English language skills
  • World-class R&D capabilities are available in Engineering, Computer Science, Mathematics and Physics
  • The Government supports the sector and is committed to improving the investment climate with IP protection laws and regulations that meet international standards and not only
  • The country also has an extensive experience with large multinational companies 
  • Armenia has signed bilateral treaties on investment promotion and protection with more than 43 countries, double taxation and the prevention of fiscal evasion treaties with more than 46 countries
  • Armenia is a signatory to the International Convention on Investment Disputes and a member of the International Center for the Settlement of Investment Disputes (ICSID)

STARTUP ECOSYSTEM

  • Armenia has improved its entrepreneurship environment, resulting in an emerging startup movement
  • A vibrant tech startup culture exists with high-profile firms that have achieved global success 
  • As of 2021, Armenia’s Startup Ecosystem is a regional leader in innovation and is ranked number 60th globally and number 16th for startups in Eastern Europe 
  • In 2021, Picsart announced the company’s valuation worthing $1 billion which made it the first Armenian startup to become a unicorn
  • During the last 2 years, more than 20 Armenian startups received $700 mln investment in total

OTHER IMPORTANT STATISTICS

  • ICT service exports doubled between 2009 and 2017, reaching from $94 million to $212 million
  • Over the past 10-15 years, the ICT industry has shown y-o-y growth of 10- 15%
  • According to the Global Competitiveness Index, Armenia ranked above the average for the upper-middle-income group on ICT adoption in 2019
  • Armenia ranked 33rd 137 among countries with the Quality of Math and Science
  • Armenia ranked 69th among 132 countries in the Global Innovation Index in 2021
  • Armenia ranked 60th among 130 countries in the Network Readiness Index in 2021
  • Armenia ranked 58th among 184 countries in the Index of Economic Freedom in 2022