LATEST NEWS
2017-10-17

Launching Conference of National Business Agenda

On October 17 in  Erato hall, Armenia Mariott Hotel Yerevan was presentation of National Business Agenda (NBA) developed by Business Advocacy Network  (hereinafter Network)

2017-10-08

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NEWSLETTER

Doing Business in Armenia

This page summarizes Doing Business 2016 data for Armenia. The first section presents the Ease of Doing Business rank (out of 189 economies) and the distance to frontier (DTF)** measure, overall and by topic. The second section summarizes the key indicators for each topic benchmarked against regional averages.

ECONOMY OVERVIEW

Economy Overview

Positive=Doing Business reform making it easier to do business. Negative=Change making it more difficult to do business.

 

  • Starting a Business  Compare all economies   View methodology   View details 

    DB 2016 RANK 5 DB 2015 RANK 3 CHANGE IN RANK -2
    DB 2016 DTF (% POINTS) 97.78 DB 2015 DTF (% POINTS) 97.77 CHANGE IN DTF (% POINTS) 0.01

    Information on new business density and number of newly created firms with limited liability can be found at Entrepreneurship Database.

    Indicator Armenia Europe & Central Asia OECD high income
    Procedures (number) 2 4.7 4.7
    Time (days) 3.0 10.0 8.3
    Cost (% of income per capita) 1.0 4.8 3.2
    Paid-in min. capital (% of income per capita) 0.0 3.8 9.6

    No. Procedure Time to Complete Associated Costs
    1 Register at the One-stop shop 2 days no charge
    2 Order a company seal 1 day AMD 15,500
  • Dealing with Construction Permits  Compare all economies   View methodology   View details    View reform  

    DB 2016 RANK 62 DB 2015 RANK 72 CHANGE IN RANK 10
    DB 2016 DTF (% POINTS) 72.43 DB 2015 DTF (% POINTS) 70.32 CHANGE IN DTF (% POINTS) 2.11

    Indicator Armenia Europe & Central Asia OECD high income
    Procedures (number) 18 15.9 12.4
    Time (days) 84.0 176.3 152.1
    Cost (% of warehouse value) 1.0 4.4 1.7
    Building quality control index (0-15) 9.5 11.2 11.4

    No. Procedure Time to Complete Associated Costs
    1 Apply and obtain architectural-constructional assignment (АПЗ) 15 days no charge
    *2 Request and obtain technical conditions approval from Yerevan Water and Sewage Company 15 days no charge
    *3 Request and obtain technical conditions approval from Electrical Networks of Armenia 15 days no charge
    *4 Request and obtain technical conditions approval on Fire Safety from Ministry of Emergency Situations 3 days no charge
    5 Request and obtain building permit from Yerevan Municipality 15 days AMD 350,000
    *6 Notify State Inspection of the Ministry of Urban Development of the start of construction works 1 day no charge
    7 Receive inspection by the Municipality 1 day no charge
    8 Receive inspection by State Inspection of Urban Development of Ministry of Urban Development 1 day no charge
    9 Request water and sewage services 9 days AMD 2,600
    10 Receive water and sewage inspection and obtain connection 1 day no charge
    11 Submit the construction logbook to the Municipality and request occupancy permit 1 day no charge
    *12 Notify the Ministry of Urban Planning about the completion of construction works 1 day no charge
    13 Receive final inspection from Ministry of Urban Planning 1 day no charge
    14 Receive final inspection from the Ministry of Emergency Situations 7 days no charge
    *15 Receive final inspection from the Municipality 1 day no charge
    16 Obtain occupancy permit from the Municipality 28 days AMD 100,000
    17 Register the building with the Cadastre 2 day AMD 127,332
    *18 Receive on-site inspection for building registration 1 day AMD 200,000
    *Takes place simultaneously with another procedure.
  • Getting Electricity  Compare all economies   View methodology   View details 

    DB 2016 RANK 99 DB 2015 RANK 96 CHANGE IN RANK -3
    DB 2016 DTF (% POINTS) 65.46 DB 2015 DTF (% POINTS) 65.44 CHANGE IN DTF (% POINTS) 0.02

    Indicator Armenia Europe & Central Asia OECD high income
    Procedures (number) 4 5.7 4.8
    Time (days) 180.0 118.5 77.77
    Cost (% of income per capita) 87.3 440.2 65.1
    Reliability of supply and transparency of tariff index (0-8) 4.0 4.7 7.2

    No. Procedure Time to Complete Associated Costs
    1 Submit application to Electrical Networks of Armenia and await technical conditions 52 calendar days AMD 0
    *2 Await and receive site inspection by Electrical Networks of Armenia 1 calendar day AMD 0
    3 Await completion of external works by Electrical Networks of Armenia 125 calendar days AMD 1,394,166.67
    4 Sign supply contract and receive final connection 3 calendar days AMD 0
    Takes place simultaneously with another procedure.
  • Registering Property  Compare all economies   View methodology   View details 

    DB 2016 RANK 14 DB 2015 RANK 14 CHANGE IN RANK 0
    DB 2016 DTF (% POINTS) 87.29 DB 2015 DTF (% POINTS) 87.27 CHANGE IN DTF (% POINTS) 0.02

    Indicator Armenia Europe & Central Asia OECD high income
    Procedures (number) 3 5.4 4.7
    Time (days) 7.0 22.0 21.8
    Cost (% of property value) 0.2 2.6 4.2
    Quality of the land administration index (0-30) 21.0 19.4 22.7

    No. Procedure Time to Complete Associated Costs
    1 Seller obtains a special reference on restrictions on the property at the State Committee of the Real Property Cadastre of the Republic of Armenia (SCRPC) 3 working days (regular procedure) and 2 working days (expedited procedure) AMD 10,000 (regular procedure) and AMD 20,000 (expedited procedure)
    2 Payment of stamp duty and notarization of sale-purchase agreement by public notary 1 day AMD 5,000 (Stamp duty for Notarization) + AMD 10,000 – 20,000 (Notary’s fees)
    3 The local office of the SCRPC registers the title and provides a registration certificate to the new owner 4 working days (regular procedure), 3 working days (expedited procedure), and2 working days (super fast procedure) AMD 40,000 (State duty for registration) + AMD 25,000 (Registration fee; regular procedure);
    AMD 40,000 (State duty for registration) + AMD 50,000 (expedited procedure );
    AMD 40,000 (State duty for registration) + AMD 75,000 (super fast in 2 working days)
  • Getting Credit  Compare all economies   View methodology   View details 

    DB 2016 RANK 42 DB 2015 RANK 36 CHANGE IN RANK -6
    DB 2016 DTF (% POINTS) 65.00 DB 2015 DTF (% POINTS) 65.00 CHANGE IN DTF (% POINTS) 0.05

    Indicator Armenia Europe & Central Asia OECD high income
    Strength of legal rights index (0-12) 5.0 6.2 6.0
    Depth of credit information index (0-8) 8.0 6.3 6.5
    Credit registry coverage (% of adults) 0.0 23.8 11.9
    Credit bureau coverage (% of adults) 94.1 37.4 66.7

    Strength of legal rights index (0-12)
    Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and enforcement of functional equivalents to security interests in movable assets exist in the economy? No
    Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without requiring a specific description of collateral? No
    Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a specific description of collateral? No
    May a security right extend to future or after-acquired assets, and may it extend automatically to the products, proceeds or replacements of the original assets? No
    Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Yes
    Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by asset type, with an electronic database indexed by debtor's name? No
    Does a notice-based collateral registry exist in which all functional equivalents can be registered? No
    Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed online by any interested third party? No
    Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency procedure? Yes
    Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is liquidated? Yes
    Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Yes
    Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow the secured creditor to sell the collateral through public auction and private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Yes
    Score (number of "yes" responses) 5.00

    Depth of credit information index (0-8) Credit bureau Credit registry Score
    Are data on both firms and individuals distributed? Yes No 1
    Are both positive and negative credit data distributed? Yes No 1
    Are data from retailers or utility companies - in addition to data from banks and financial institutions - distributed? Yes No 1
    Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Yes No 1
    Are data on loan amounts below 1% of income per capita distributed? Yes No 1
    By law, do borrowers have the right to access their data in the credit bureau or credit registry? Yes No 1
    Can banks and financial institutions access borrowers’ credit information online (for example, through an online platform, a system-to-system connection or both)? Yes No 1
    Are bureau or registry credit scores offered as a value-added service to help banks and financial institutions assess the creditworthiness of borrowers? Yes No 1
    Score ("yes" to either public bureau or private registry)     8.00

    Coverage Credit bureau Credit registry
    Number of individuals 1,911,596 0
    Number of firms 36,789 0
    Total 1,948,385 0
    Percentage of adult population 94.10 0.00
  • Protecting Minority Investors  Compare all economies   View methodology   View details 

    DB 2016 RANK 49 DB 2015 RANK 16 CHANGE IN RANK -3
    DB 2016 DTF (% POINTS) 60.00 DB 2015 DTF (% POINTS) 60.00 CHANGE IN DTF (% POINTS) 0.00

    Indicator Armenia Europe & Central Asia OECD high income
    Strength of minority investor protection index (0-10) 6.0 6.2 6.4
    Extent of conflict of interest regulation index (0-10) 6.3 6.1 6.3
    Extent of disclosure index (0-10) 5.0 6.7 6.4
    Extent of director liability index (0-10) 6.0 4.9 5.4
    Ease of shareholder suits index (0-10) 8.0 6.7 7.2
    Extent of shareholder governance index (0-10) 5.7 6.3 6.4
    Extent of shareholder rights index (0-10) 9.0 7.2 7.3
    Extent of ownership and control index (0-10) 2.0 5.5 5.6
    Extent of corporate transparency index (0-10) 6.0 6.1 6.4

    Answer Score
    Extent of conflict of interest regulation index (0-10) 6.3
    Extent of disclosure index (0-10) 5.0
    Which corporate body can provide legally sufficient approval for the Buyer-Seller transaction? (0-3) Board of directors excluding interested members 2.0
    Is disclosure by the interested director to the board of directors required? (0-2) Existence of a conflict without any specifics 1.0
    Is disclosure of the transaction in published periodic filings (annual reports) required? (0-2) Disclosure on the transaction and on the conflict of interest 2.0
    Is immediate disclosure of the transaction to the public and/or shareholders required? (0-2) No disclosure obligation 0.0
    Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0
    Extent of director liability index (0-10) 6.0
    Can shareholders sue directly or derivatively for the damage caused by the Buyer-Seller transaction to the company? (0-1) Yes 1.0
    Can shareholders hold the interested director liable for the damage caused by the transaction to the company? (0-2) Liable if negligent 1.0
    Can shareholders hold members of the approving body liable for the damage cause by the transaction to the company? (0-2) Liable if negligent 1.0
    Must the interested director pay damages for the harm caused to the company upon a successful claim by a shareholder plaintiff? (0-1) Yes 1.0
    Must the interested director repay profits made from the transaction upon a successful claim by a shareholder plaintiff? (0-1) Yes 1.0
    Is the interested director fined and imprisoned or disqualified upon a successful claim by the shareholder plaintiff? (0-1) No 0.0
    Can a court void the transaction upon a successful claim by a shareholder plaintiff? (0-2) Voidable if negligently concluded 1.0
    Ease of shareholder suits index (0-10) 8.0
    Before filing suit, can shareholders owning 10% of the company’s share capital inspect the transaction documents? (0-1) Yes 1.0
    Can the plaintiff obtain any documents from the defendant and witnesses during trial? (0-3) Any relevant document 3.0
    Can the plaintiff request categories of documents from the defendant without identifying specific ones? (0-1) Yes 1.0
    Can the plaintiff directly question the defendant and witnesses during trial? (0-2) Yes 2.0
    Is the level of proof required for civil suits lower than that of criminal cases? (0-1) No 0.0
    Can shareholder plaintiffs recover their legal expenses from the company? (0-2) Yes if successful 1.0
    Extent of shareholder governance index (0-10) 5.7
    Extent of shareholder rights index (0-10) 9.0
    Does the sale of 51% of Buyer’s assets require shareholder approval? Yes 1.0
    Can shareholders representing 10% of Buyer’s share capital call for an extraordinary meeting of shareholders? Yes 1.0
    Must Buyer obtain its shareholders’ approval every time it issues new shares? Yes 1.0
    Do shareholders automatically receive preemption rights every time Buyer issues new shares? Yes 1.0
    Must shareholders approve the election and dismissal of the external auditor? Yes 1.0
    Must changes to the voting rights of a class of shares be approved only by the holders of the affected shares? No 0.0
    Assuming that Buyer is a limited company, does the sale of 51% of Buyer’s assets requires shareholder approval? Yes 1.0
    Assuming that Buyer is a limited company, can shareholders representing 10% of Buyer’s share capital call for an extraordinary meeting of shareholders? Yes 1.0
    Assuming that Buyer is a limited company, must Buyer obtain its shareholders’ approval every time it issues new shares? Yes 1.0
    Assuming that Buyer is a limited company, do shareholders automatically receive preemption rights every time Buyer issues new shares? Yes 1.0
    Extent of ownership and control index (0-10) 2.0
    Is the CEO prohibited from also being chair of the board of directors? No 0.0
    Must the board of directors include independent and nonexecutive board members? No 0.0
    Can shareholders remove members of Buyer’s board of directors without cause before the end of their term? Yes 1.0
    Must Buyer’s board of directors include a separate audit committee? No 0.0
    Must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Buyer? No 0.0
    Must Buyer pay dividends within a maximum period set by law after the declaration date? No 0.0
    Is a subsidiary prohibited from acquiring shares issued by its parent company? No 0.0
    Assuming that Buyer is a limited company, can shareholders remove members of Buyer’s board of directors without cause before the end of their term? Yes 1.0
    Assuming that Buyer is a limited company, must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Buyer? No 0.0
    Assuming that Buyer is a limited company, must Buyer pay dividends within a maximum period set by law after the declaration date? No 0.0
    Extent of corporate transparency index (0-10) 6.0
    Must Buyer disclose direct and indirect beneficial ownership stakes representing 5%? Yes 1.0
    Must Buyer disclose information about board members’ other directorships as well as basic information on their primary employment? No 0.0
    Must Buyer disclose the compensation of individual managers? No 0.0
    Must a detailed notice of general meeting be sent 30 days before the meeting? No 0.0
    Can shareholders representing 5% of Buyer’s share capital put items on the agenda for the general meeting? Yes 1.0
    Must Buyer's annual financial statements be audited by an external auditor? Yes 1.0
    Must Buyer disclose its audit reports to the public? Yes 1.0
    Assuming that Buyer is a limited company, must a detailed notice of general meeting be sent 30 days before the meeting? No 0.0
    Assuming that Buyer is a limited company, can shareholders representing 5% of Buyer’s share capital put items on the agenda for the general meeting? Yes 1.0
    Assuming that Buyer is a limited company, must Buyer's annual financial statements be audited by an external auditor? Yes 1.0
  • Paying Taxes  Compare all economies   View methodology   View details 

    DB 2016 RANK 41 DB 2015 RANK 41 CHANGE IN RANK 0
    DB 2016 DTF (% POINTS) 82.51 DB 2015 DTF (% POINTS) 82.51 CHANGE IN DTF (% POINTS) 0.00

    Indicator Armenia Europe & Central Asia OECD high income
    Payments (number per year) 10.0 19.2 11.1
    Time (hours per year) 313.0 232.7 176.6
    Total tax rate (% of profit) 19.9 34.8 41.2
    Profit tax (% of profit) 19.1 10.8 14.9
    Labor tax and contributions (% of profit) 0.0 20.4 24.1
    Other taxes (% of profit) 0.8 3.1 1.7

    Tax or mandatory contribution Payments (number) Payments (number) Time (hours) Statutory tax rate Tax base Total tax rate (% of profit) Notes on TTR
    Corporate income tax 1 online 113 20% taxable profit 19.11  
    Land Tax 2     1% cadastral value 0.51  
    Property tax on Building 2     0.3% cadastral value 0.29  
    Vehicle tax 2     varies depends on horsepower 0.02  
    Environmental pollution charge for vehicles 1     AMD 50 per horsepower engine of the vehicle (in horsepower) 0.01  
    Income tax (includes social security contributions - employees) 1 online 103 (i) 24.4% of monthly taxable income up to AMD 120,000; (ii) AMD 29,280 plus 26% of the monthly taxable income exceeding AMD 120,000; (iii) AMD 518,080 plus 36% of the monthly taxable income exceeding AMD 2,000,000. gross salaries 0.00  
    Value added tax (VAT) 1 online 97 20% value added, land sale 0.00 not included
    Totals: 10.00 313.00 19.9

    Notes:
    Name of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table.
    The hours for VAT include all the VAT and sales taxes applicable.
    The hours for Social Security include all the hours for labor taxes and mandatory contributions in general.

  • Trading Across Borders  Compare all economies   View methodology   View details   View reform 

    DB 2016 RANK 29 DB 2015 RANK 58 CHANGE IN RANK 29
    DB 2016 DTF (% POINTS) 92.23 DB 2015 DTF (% POINTS) 81.75 CHANGE IN DTF (% POINTS) 11.48

    Indicator Armenia Europe & Central Asia OECD high income
    Time to export: Border compliance (hours) 3 28 15
    Cost to export: Border compliance (USD) 0 219 160
    Time to export: Documentary compliance (hours) 2 31 5
    Cost to export: Documentary compliance (USD) 150 144 36
    Time to import: Border compliance (hours) 3 23 9
    Cost to import: Border compliance (USD) 0 202 123
    Cost to import: Border compliance (USD) 2 27 4
    Cost to import: Documentary compliance (USD) 100 108 25

    Characteristics Export Import
    Product HS 22 : Beverages, spirits and vinegar HS 8708: Parts and accessories of motor vehicles
    Trade partner Russian Federation Russian Federation
    Border Bagratashen-Sadakhlo border crossing Bagratashen-Sadakhlo border crossing
    Distance (km) 211 211
    Domestic transport time (hours) 5 5
    Domestic transport cost (USD) 371 371
    Domestic transport speed (km/hour) 46.9 46.9
    Domestic transport cost per distance (USD/km) 1.8 1.8

    Export documents Import documents
    CMR waybill CMR waybill
    Commercial invoice Invoice
    Packing list Packing list
    Transit document (by Georgian customs) Transit document (T1)
  • Enforcing Contracts  Compare all economies   View methodology   View details   View reform 

    DB 2016 RANK 28 DB 2015 RANK 36 CHANGE IN RANK 8
    DB 2016 DTF (% POINTS)/span> 70.46 DB 2015 DTF (% POINTS) 68.60 CHANGE IN DTF (% POINTS) 1.86

    Indicator Armenia Europe & Central Asia OECD high income
    Time (days) 570.0 480.7 538.3
    Cost (% of claim) 14.0 26.2 21.1
    Quality of judicial processes index (0-18) 11.5 10.5 11.0

    Indicator
    Time (days) 570.0
    Filing and service 30.0
    Trial and judgment 420.0
    Enforcement of judgment 120.0
    Cost (% of claim) 14
    Attorney fees 12.0
    Court fees 2.0
    Enforcement fees 0.0
    Quality of judicial processes index (0-18) 11.5
    Court structure and proceedings (0-5) 2.0
    Case management (0-6) 5.5
    Court automation (0-4) 2.0
    Alternative dispute resolution (0-3) 2.0