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1.1.1. Main Forms of Doing Business

Main forms of doing business in Armenia include:

  • Limited Liability Companies
  • Joint Stock Companies (Open and Closed)
  • Business Partnership (General and Limited)
  • Foreign Business (Branch, representative office and Subsidiary)

Limited Liability Company

LLC is considered as a separate legal entity from its shareholder and they are taxed separately.

The key aspects of a Limited liability company include:

  • Can be formed by a minimum one shareholder and one director of any nationality
  • Minimum paid-up capital required is Euro 1
  • Liability of its shareholders is limited to their contribution
  • LLC are required to submit annual audited financial statements to the commercial registry.

Joint Stock Company

Joint Stock Company is a legal entity formed by one or more shareholders.

The key aspects of JSC include:

  • Can be formed by a minimum one shareholder and one director of any nationality
  • Minimum paid-up capital required is Euro 1
  • Liability is limited to the value of their capital contribution
  • JSC is required to submit annual audited financial statements to the commercial registry.

The key aspects of Open JSC include:

  • Shares can be offered to the public. It has an open subscription for shares. The stocks are sold to the public without the consent of other stockholders.
  • No minimum shareholder requirement, it can be unlimited
  • Mandatory audit requirement of financial statement
  • Mandatory reporting requirement issued by Armenia Securities Commission  

The key aspects of Closed JSC include:

  • Shares are first to be offered to its shareholders. Shares are distributed only among its founders or a pre-determined group of persons or entities. A closed company does not hold an open subscription for its shares or otherwise offer them to an unlimited number of purchasers.
  • It cannot have more than 49 shareholders
  • No mandatory audit requirement

Partnership

An individual is not permitted to be partner in more than one partnership. Business partnerships may be general or limited.

The key aspects of General partnership include:

  • Minimum 2 persons or organisations to form a partnership
  • Jointly liable for the firm’s debts and liabilities

The key aspects of Limited partnership include:

  • Comprises of general and limited partners
  • Liability of general partners is unlimited
  • Liability of the limited partners is limited to their capital contribution

Foreign Business

Foreign companies may operate in Armenia without establishing a new legal entity by registering as a representative office or a branch of a foreign entity. They are not regarded as a separate legal entity and are governed by the rules and regulations of the foreign legal entity. The representative office is not considered as a separate legal entity and is not allowed to conduct business activities. It operates to represent and protect the interests of the foreign legal entity. A branch office is allowed to perform all necessary business functions and activities on behalf of the foreign entity.

Further information on the general investment, tax and regulatory regime about the country is available at the following external references: