Economic Overview
Armenia’s economy in 2017 encountered its most elevated development rate in 10 years. The “velvet unrest” and power progress don’t seem to have disturbed the ideal macroeconomic patterns that started in 2017, as GDP enrolled 8.3% development year-on-year (y-o-y) in the main portion of 2018. Speculation, which has been discouraged as of late, made a higher commitment to add up to financial development.
Swelling stays low, beneath the expansion target scope of the Central Bank of Armenia (CBA). The new Government has appeared solid pledge to financial judiciousness and to a lower open obligation. Despite the fact that the fare of products expanded essentially, joined by an expansion in the quantity of travelers and higher exchanges, it was more than counterbalanced by a lot higher import development; as the outcome, the present record shortfall enlarged.
The ongoing financial development and positive work showcase patterns – together with low swelling and rising settlement inflows – added to declining neediness rates. A continuation of these patterns in 2018 ought to give extra salary age chances to those at the base of the appropriation.
Main sectors in Armenia
Mining Industry
Armenia’s economy is to a great extent bolstered by the mining business, with the area having contributed half of the nation’s fares in 2011. Real minerals incorporate molybdenum, precious stone, and copper which are found in Lori territory. Gold stores are likewise mined.
Different minerals found in littler amounts are lead, silver Zinc, rock, gypsum, limestone, basalt, and diatomite. In 2011, Chinese speculators connected for a thumbs up to put $500M in the Armenian mineral industry. In spite of the monetary retreat in 2011, the incomes have developed fundamentally.
Farming Industry
Armenia has 2.1 million hectares of arable land for both harvest and animals creation. Plantations, just as vineyards, possess 16% of the land. Of all the utilized individuals in 2006, 46% were in the farming business. This was a colossal turnaround from 1991 when the nation imported over 65% of nourishment necessities.
The development in agribusiness had been contributed by the 1990 laws which offered land to private agriculturists. In 2010 farming contributed up to 25% of the nation’s GDP. In 2006, the commitment was 20% of the GDP. The drop was because of unfriendly climate and the administration’s inability to offer improvement activities to ranchers.
The dirt which is fundamentally volcanic backings the development of wheat, grain, and organic products like figs, apricot, olives, and Pomegranates.
In 2006, the generation of grains was 212,500 tons, organic products 286,000 tons while vegetables 915,000 tons. Animals like sheep, goats, and steeds are regular in the nation.
The travel Industry
Vacationers visiting Armenia consistently have achieved millions since 1990. A large portion of these visitors are from Russia, Iran, Georgia, and the United States.
The principle attractions are the UNESCO certify legacy locales to be specific Monastery of Geghard and Upper Azat Valley which contains numerous holy places and tombs including the Echmiatsin house of God which incredibly impacts present day design and the Haghpat and Sanahim Monasteries.
Armenians sorts out occasions and celebrations to advance the travel industry, for example, Golden Apricot and Pan – Armenian diversions. Vacationers appreciate site seeing just as unwinding in present day lodgings. Be that as it may, the travel industry part confronted various difficulties during the 1990s because of the Spitak quake and deficiency of vitality not to overlook the Karabakh-Nagorno War which prompted the conclusion of the air terminals.
The Textiles And Apparel Industry
The material business is among the most antiquated economy drivers that depended on weaving, attire innovation and dressmaking. Cover and cowhide shoes are likewise created.
On February 16, 2017, the United Nations Industrial Development Organization (UNIDO) consented to fund the material and attire industry to the tune of $ 2 million to support little and medium ventures SME to build deals and upgrade the development of the leatherwork and shoe generation. In 2014, numerous youngsters were prepared on structure and extensive scale generation of top of the line pieces of clothing.
Data Technology Industry
Regardless of the moderate development after the crumple of the Soviet Union, the IT business has recorded a development because of the very able workforce and the few ICT organizations putting exceptionally in Armenia. Training is exceedingly improved up to college level with present day organizations, for example, Yerevan State University and the American University in Armenia.
Microsoft Innovation Center (MIC) has likewise settled an office to affect abilities, offer employment opening, and improve innovative work. IBM development arrangements and innovation focus and the Gyumri innovation focus likewise construct skill and learning to up and coming IT organizations.
Gems Industry
Because of tremendous stores of gold and precious stone, Armenia makes and fares various adornments. In 1998, Armenia Jewelers Association (AJA) was shaped with the command to guarantee generation of value and focused adornments, search for positive markets universally and administrative part of the business. In 2007, Jewelry contributed $72.7 million to the economy.
Vitality Sector
Armenia imports the greater part of its vitality since it doesn’t have oil fossils saves. Electrical vitality is in abundance to a great extent because of the commitment of the atomic vitality and imports from Russia.
Media transmission Industry
Measurements demonstrate that in June 2004 there were more than three million Armenians associated with portable communication, meaning 120% access. The three major media transmission organizations are Viv cell MTS, Ucom, and Beeline. Every present to the quickest 4G administrations.
The media transmission industry is very much created and one can get all administrations including sim cards, cell phones, and access and levies. There is additionally the trans-Asia Europe fiber optic link.
Concoction Industry
Armenia can create synthetic compounds, for example, specialized elastic, painting synthetic compounds, beauty care products and fragrances, family unit and mechanical synthetics just as acids and oxides. For example, in 2003, fabricate of paint materials expanded by 25% however there was a drop by half of engineered elastic and washing synthetic substances.
Saving money Industry
There are in excess of 21 business banks utilizing a huge number of individuals in Armenia. In 2005, the complete managing an account resources developed by 10.3%. Throughout the years, there has been an expansion in credits allowed by the banks and stores assembled, subsequently an upward pattern in productivity.
The banks have present day frameworks with stringent laws that manage and permit the business under the watch of the controller – the Central Bank of Armenia.
Taxes in Armenia
Non-occupant organizations, in other words, companies that have not been enrolled in Armenia are submitted to the corporate expense like some other Armenian organization. In this way, treatment of occupant and non-inhabitant organizations is indistinguishable. Be that as it may, explicit privileges apply to corporate tax collection if outside interests in an organization surpass AMD 500 million.
Capital increases are burdened at the conventional corporate salary impose rate of 20%.
Devaluation of unmistakable and elusive resources is assess deductible (aside from property). Altruism can’t be amortized for expense purposes.
Start-up and intrigue costs are commonly charge deductible. The bit of enthusiasm surpassing the twofold of the settlement rate settled by the Central Bank of Armenia on December 31st of the tax assessment year isn’t deductible.
The present rate is 24%. Rental installments and terrible obligations are likewise deductible. Receivables that are not gathered somewhere in the range of 91 and 180 days after their cut-off date are deductible by 25%. The rate is half to remarkable obligations somewhere in the range of 181 and 270 days after the cut-off date and 75% somewhere in the range of 271 and 365 days. Obligation deductibility is topped at AMD 100,000. Bigger cases must be settled through the lawful procedure.
Gifts to altruistic associations are deductible up to 0.25% of gross pay.
Business fines are impose deductible, rather than those paid to city or national specialists. Non-refundable assessments are deductible.
Certain IT organizations just as pay from rural exercises and embroidered artwork are absolved from partnership impose.
Assessment misfortunes can be conveyed forward as long as five years. The carryback of misfortunes isn’t allowed.
Standardized savings commitments payable by the business add up to 5% of the gross pay up to AMD 500,000. The rate goes up to 10% for the part over AMD 500,000. Commitments payable by the business are topped at AMD 25,000 every month (material top until 1 July 2020).
SMEs are liable to a turnover assess that replaces VAT and partnership charge. Rates fluctuate between 3.5% (a diminished rate of 1.5% applies just to the closeout of auxiliary crude materials) and 20% relying upon kind of salary and apply to any SME with a yearly turnover underneath AMD 115 million.
The property charge is 0.3% of the cadastral esteem. The property charge is collected at variable rates relying upon the kind of land. For rural land, the rate is 15% of overall gain as indicated by the cadastral valuation. For non-horticultural land, the rate shifts somewhere in the range of 0.5% and 1% of the cadastral esteem. Vehicles are additionally subject to a property assess that changes as per motor power (AMD 200 least).
Investing in Armenia