How to open a sole proprietorship and LLC in Armenia in 2022?
2022 was a record year for the number of open sole proprietorships and LLCs in Armenia, mainly due to the Russians, and thanks to the benefits for IT startups from the RA, which completely exempt from income tax (18%) until at least December 31, 2022 and reduce income tax on salaries employees from 21% to 10%. In this regard, I will continue the cycle of posts about Armenia with a small guide on where to go, what to discover and what to do with it all.
What is better to open to a Russian citizen in Armenia, an individual entrepreneur or an LLC?
Both individual entrepreneurs and LLCs pay a 5% turnover tax
IP pays personal income tax in Russia, LLC does not pay tax on dividends
IP is subject to the currency legislation of the Russian Federation, LLC – no
Sole Proprietor cannot employ himself / LLC – can
Sole Proprietorship in the RA is not a CFC (no need to notify and report) / LLC – CFC
IP with an account can be opened remotely (see relocation chats from the post about banks) / LLC – no
How to open a sole proprietorship in Armenia?
To submit documents, you need to contact the one-stop service of the center for registration of legal entities, located at the address Yerevan, Komitas Avenue, 49/2.
The whole procedure can take several hours (95% – queuing)
Entering the premises of the registration center of legal entities – you go to the right, you need to take a ticket and take a queue. If you see volunteers on the left, take a form for registering an individual entrepreneur from them, if there are none, the form will be given to you by the employee accepting documents.
After your turn has come, we submit the documents:
completed application form
foreign passport / passport of the Russian Federation
notarized translation of the main page of the passport into Armenian
IP registration address (can be any, even a hotel, you can give the address of a friend) the address can be important if, for example, you are applying for a residence permit
While the employee enters your data into the database, you will be asked to pay the cost of the IP registration service – 3,200 AMD through an electronic terminal.
In 15 minutes, you will be given a paper certificate of A4 format with a seal, in which the name of the IP (your full name) and registration address will be written in Armenian.
How to open an LLC in Armenia?
All the same steps as for IP,
completed application form
foreign passport / passport of the Russian Federation
notarized translation of the main page of the passport into Armenian
founding documents (charter of the company, minutes of the meeting of shareholders with the decision to establish a legal entity in the RA)
Application and declaration on the true beneficiaries of the company (in Armenian and Russian)
There is no need to pay a duty in case of opening an LLC.
The next step is to open a bank account for the company.
How to open a sole proprietorship LLC account in Armenian banks?
A complete list of required documents for opening an LLC and IP
Constituent documents from the registration chamber
Scan of the translation of the passport of the General Director or IP-shnik
Contracts with clients – it is possible to provide contracts in Russian/English
Lease agreement (sometimes)
Important
Bank employees very often slip tariffs for non-residents, which are many times higher than for local ones. If this happens, you should explain to the employee that an individual entrepreneur or LLC opened in Armenia is a resident of the Republic of Armenia and is subject to the relevant local tariffs.
Which bank is better?
From saddest to most hilarious:
ARARAT BANK
They don’t open.
ACBA BANK
It became difficult to open IP accounts. Required to live 180 days in Armenia. They require agreements with contractors, with an accountant,.
CONVERSE BANK
Opening an account for an individual entrepreneur costs AMD 1000 + AMD 4900 for annual service, no matter what currency the account is opened in. From the documents they require a lease agreement of 3 months, statements from accounts for the last year, a certificate of registration of an individual entrepreneur and an agreement with counterparties.
ARDSHINBANK
Opening an account costs AMD 70,000, maintenance is AMD 10,000. in year. From the documents you need a passport and a certificate of opening an IP. Online banking, very neat and to put it mildly, not very modern. Quite often, you have to walk with your feet to the bank to perform transactions that are performed in the application in other banks.
UNIBANK
Consideration of the application 25000 AMD. Account opening AMD 5000 per account. Documents: passport and company registration certificate.
VTB Armenia
Everything is very democratic with prices – it costs 4900 drams to open an account, and the service is free. But sanctions…
EVOCABANK
Opening an account is free of charge, maintenance is 10,000 AMD per year.
Documents: Passport, and certificate of registration of individual entrepreneur (Extract from the unified state register).
INECOBANK
Opening an account – AMD 5,000, annual maintenance – AMD 36,000. A good, decent bank, banks with high-quality online banking begin with it.
AMERIABANK
Maintenance cost – 20,000 per year, if the company’s turnover is less than 300,000 AMD. The service is free of charge if the turnover is AMD 300001 or more. The application is already closer to Tinkovsky, but still, perhaps, it is inferior to ID bank.
IDBANK
Opening an account – 3000 AMD. Service is free. Online banking is probably the best in Armenia. Number 1 in the ranking.
Important
Bank employees very often slip tariffs for non-residents, which are many times higher than for local ones. If this happens, you should explain to the employee that an individual entrepreneur or LLC opened in Armenia is a resident of the Republic of Armenia and is subject to the relevant local tariffs.
Underwater rocks
for RA tax residents:
Your relationship with the tax RF depends on the status of a resident. If 183+ days, then there is no need to pay taxes in the Russian Federation, on the other hand, if there are parallel activities in the Russian Federation, the tax burden will increase.
for currency residents of the Russian Federation (everyone who has a Russian passport):
At the time of writing this post, receiving currency to an IP account is a violation of Decree 79, but not to an LLC account.
for tax residents of the Russian Federation:
Within 3 months, you should notify the tax office in the Russian Federation about the opening of a CFC, otherwise a fine of 50,000 rubles. (does not apply to IP)
Annually report for the CFC; otherwise, a fine of 500,000 rubles. (does not apply to IP)
Until April 30 of the next year, submit a declaration of received dividends and income of an individual entrepreneur to the Tax Office in the Russian Federation and pay a 13% personal income tax on income.
