Armenia is a very convenient option for moving businesses. As the relocation to Armenia recently became a highly discussed topic, we decided to answer the most common questions about the legal aspects of relocation.
What organizational and legal forms are available for business relocation under the RA legislation?
Armenian legislation for doing business makes it possible to register an individual entrepreneur or establish a limited liability company (LLC), open or closed joint-stock companies (OJSC or CJSC). Depending on your business activity, our consultants will offer you the most convenient legal form for your business activity.
Why register as an individual entrepreneur?
The registration of individual entrepreneur fits freelancers and businesses that do not have many employees. An individual entrepreneur is registered within 1 business day.
What are the required documents?
- notarized translation of the passport
- receipt for payment of state duty in the amount of AMD 3,000
- legal address (we can provide it if necessary)
What are the risks associated with registering as an individual entrepreneur?
Unlike a company, an individual entrepreneur is liable with his personal property to creditors for the activities of the individual entrepreneur. In the case of an LLC or JSC (CJSC or OJSC), the responsibility of the founder/s is limited by law.
What is the most common legal form?
The most common organizational and legal form of business relocation is LLC or CJSC.
Why register as LLC?
LLC fits for businesses with a simpler corporate governance mechanism. An LLC is a simpler mechanism in terms of organizational and legal aspects and from the point of view of corporate governance.
- LLC participants can also be individuals and legal entities that are not residents/citizens of the Republic of Armenia;
- The director may be an individual who is not a citizen of the Republic of Armenia.
- Unlike individual entrepreneurs, the risk of LLC participants is limited to their participation in the authorized capital of the company’s company;
- There is no need to create a board of directors in an LLC.
- The RA legislation does not provide for the minimum size of the charter capital.
Why register as CJSC or OJSC?
These organizational and legal forms are suitable for those companies that have a more flexible corporate governance system, want to issue securities in terms of attracting investment, and also have more than 49 shareholders.
What are the advantages of joint-stock companies?
Often, when relocating a business, this circumstance is ignored, but joint-stock companies have an advantage in the sense of the RA legislation, for example, an LLC has the right to distribute its profit among the company’s participants once a year, while a joint-stock company has the right to pay quarterly, semi-annual or annual dividends.
What are the necessary documents for registering as an LLC and a JSC?
If the founder is an individual
- Application form (filled in at the place of the state registry)
- Founders’ passport (notarized translation).
- Founding Decision
- Company’s Charter
- Director’s passport (notarized translation and copy).
If there is a legal entity among the founders
- Application form (filled in at the place of the state registry)
- Founding Decision
- Founding documents of the founder company– articles of association(charter), certificate of registration, the founding decision (if any), and a document confirming the status of a shareholder.
- Passport of the company’s director (notarized translation and copy).
The right strategy, chosen from the moment of business registration, is the key to effective activity. With extensive experience in this field, our professional team is ready to provide legal advice when registering the correct organizational and legal form of business activity and conducting it further.
