Armenia is quickly becoming a hotspot for entrepreneurs and investors, particularly in IT, trade, and professional services. With a simple registration process, low taxes, and a growing startup ecosystem, setting up a company in Armenia can open the door to both local and international markets.
General tax environment
Here is a list of taxes that companies operating in Armenia pay:
- Corporate Income Tax (CIT): 18% on taxable income
- Value-Added Tax (VAT): 20% on taxable turnover of goods and services
- Turnover Tax (replaces the CIT and VAT for small and medium enterprises): the amount depends on the income type.
- Withholding Tax: Up to 20% on certain payments to non-residents without a permanent establishment in Armenia.
- Property Tax: Depends on the property’s value.
- Excise tax: Paid on alcoholic beverages, tobacco products, and petroleum products, whether imported or produced domestically.
- Social Security Contributions: 5% of the monthly gross salary if less than AMD 500,000; 10% of the monthly gross income (but not more than AMD 1,125,000) minus AMD 25,000 if the monthly gross income is more than AMD 500,000..
Additionally, Armenia has treaties with 40+ countries, preventing double taxation for foreign investors.
High-Tech Sector Incentives
- Reduced Turnover Tax: IT and high-tech companies with annual turnover below AMD 115 million pay a turnover tax at the standard rate of 10%. However, all the freelancers working either under PE or LLC may also apply for a reduced turnover tax rate set at 1%.
- Social Support for New Employees: Companies can receive a 60% reimbursement of the personal income tax paid on salaries for new employees entering the high-tech sector, applicable for up to three years.
- Employee retraining: State support is provided in the amount of 50% of the calculated income tax on the salary and equivalent payments for employees who have received certified training in Armenia. For those retraining abroad, the government will reimburse 70% of travel expenses, up to $5,000 per employee.
- R&D Incentives: Employees engaged in research and development (R&D) activities within the high-tech sector are subject to a 10% personal income tax rate, compared to the standard 20%.
- Corporate Income Tax (CIT) Deductions: Companies in the high-tech sector can deduct 200% of salaries paid to eligible employees from their CIT base.
All aforementioned incentives are applicable up to December 31, 2031. Check out this guide for more information on government incentives for tech startups in Armenia.
Free Economic Zones (FEZs)
Businesses registered in Free Economic Zones can enjoy taxation benefits. Here is a list of FEZs operating in Armenia:
| Alliance Free Economic Zone | Meghri Free Economic Zone | Ecos Free Economic Zone | Meridian Free Economic Zone | |
| Location | Near the Zvartnots International Airport | Near the Iranian border | City of Hrazdan | Center of Yerevan |
| Focus | Electronics, precision engineering, pharmaceuticals, biotechnology, IT, alternative energy, telecommunications, etc. | Agriculture, processing industry, trade, transportation, tourism, etc. | High-tech industries, information technology, and software development. | Jewelry, diamond cutting, and watchmaking. |
| Benefits | 0% profit tax,0% VAT,0% import and export duties,0% dividend taxes,0% property and real estate taxes. | 0% profit tax, 0% VAT,0% excise tax and customs fees,0% property tax,0% dividend tax for foreign investors. | 0% income tax, 0% VAT,0% import and export customs duties, 0% taxes on property and real estate. | 0% customs duties0% VAT,0% profit tax,0% property tax. |
FAQs
- What tax incentives exist for high-tech / IT companies in Armenia (2025–2031)?
Armenia offers robust incentives for high-tech and IT companies. These incentives include social support for new employees, employee retraining, research and development incentives, and CIT deductions. To learn more about this, check out this article.
- What incentives apply to companies in Free Economic Zones (FEZs)?
The incentives can depend on the specific FEZ, but some incentives include:
- 0% Profit (Corporate Income) Tax
- 0% VAT
- 0% Import/Export Duties
- 0% Dividend Tax
- 0% Property Tax
Check out the relevant section of this article to learn about each FEZ in more detail.
Registering a company in Armenia’s fast-growing, business-friendly ecosystem is a unique precondition for scaling your company regionally and globally with attractive benefits provided by the state. If you need any further individual assistance in order not to miss out on the opportunities and benefits that Armenia provides for business registration, reach out to our team at Retrieve Legal and Tax. We will be glad to be of service in case of any inquiries. You can contact us via email: info@retrieve.am; or telephone: +374 41 777 332.