Implemented and ongoing reforms

The reform proposes to establish that when the difference in cadastral values ​​exceeds twenty million drams (and ten million drams in the border, mountain and highland communities included in the list defined by the government) when changing the purpose of the plot, the owner of the plot can pay the amount exceeding twenty and ten million drams, respectively, up to within five years. The periodic determination of the difference in cadastral values ​​and the payment schedule will be approved by the decision of the community council. In addition, in order to ensure the fulfillment of the obligation to pay the cadastral value of the intended plot in installments, the owner of the plot must sign a mortgage contract with the relevant community for the purpose of changing the plot or submit a guarantee for a period not less than the installment payment period and not less than the amount to be paid in installments, issued in the Republic of Armenia. Moreover, the owner of the plot is also obliged to pay the community interest in the amount of two percent of the deferred amount for each installment year - in the first quarter of each year - for the previous year. In case of non-payment, the municipality will have the opportunity to confiscate the mortgaged plot from the owner. Alternatively, a guarantee of an amount not less than the installment payment period and the amount payable in installments may be presented in the Republic of Armenia. by a licensed bank. Moreover, the guarantee must be presented to the council of elders before the decision of the council of elders on installments is made creates additional guarantees for the community in connection with the execution of payments, on the other hand, it makes it risky for the investor to not make payments according to the established schedule.

The reform proposes to expand the range of issues to be approved by the Government in case of establishing the stamping of goods with control (identification) marks based on the international agreements ratified by the Republic of Armenia, particularly including the approval of the amount of payment for the service of providing the control (identification) mark.

The reform proposes to include in the list of activities that are not considered resumption of activities defined by Article 53, Part 9 of the Tax Code:

● return (transfer) of funds from the joint account to the taxpayer's bank account;

● closing bank accounts.

● return of unused excise stamps and/or stamps;

● submission of reports, declarations to state and local self-government bodies, bodies established by law;

● Submission of the declaration on beneficial owners established by the law "On State Registration of Legal Entities, Separate Divisions of Legal Entities, Institutions and Individual Entrepreneurs" and performing the necessary actions to identify the beneficial owners of legal entities.

Through the reform, it is suggested to repeal the restrictions provided for in Article 388, Part 4 of the Tax Code of the Republic of Armenia, providing more liberal conditions for conducting business. As a result of the ban established by Article 388, Part 4 of the RA Tax Code, it will not be necessary to hire a separate employee for the purpose of fulfilling the duties of the treasurer, which will improve the operating conditions of very small companies in particular.

The goal of the assistance program is to increase the quality of products of Armenian companies through the implementation of the latest quality management systems in the production processes of businesses. The program proposes to partially compensate the costs for businesses in the scope of the following certifications: 

1) In the case of ISO 9001 and ISO 14001 certificates, in the amount of 80% of the cost of certification, but not more than 1,000,000 (one million) AMD and in the amount of 50% of the payments made for the consultant's service, but not more than 1,500,000 ( one million five hundred thousand) drams.

2) In the case of ISO 22000 and FSSC 22000 certificates, in the amount of 80% of the cost of certification, but not more than 1,500,000 (one million five hundred thousand) AMD and in the amount of 50% of the payments made for the consultant's service, but not more than 3,000,000 ( three million) drams.

3) In the case of "Global G.A.P.", "Halal", "organic" and "transition period organic" certificates, in the amount of 80% of the cost of certification, but not more than 1,500,000 (one million five hundred thousand) AMD.

The reform proposes to establish that if the land plot of the agricultural land owned by the state or communities has been changed from grasslands, pastures or other land plots to the land plot of perennial plantations during the term of the lease agreement, the rent during the term of the agreement is subject to not a raise. In addition, it is proposed to stipulate that in case of extending the lease agreement or signing a new lease agreement for the same plot with the previous tenant, the rent will be discounted, in the event that the market value of the plot increases as a result of the investment made. Moreover, the market value of the plot is determined by an independent appraiser. The value of the market value of the plot of land with the changed plot and the market value of the plot of land with the same plot before the change will be taken as the calculation basis. If the consensus shows that the market value of the plot with the changed plot is significantly higher, then depending on the magnitude of the increase in the market value, 30-50% of the market rent will be applied.

The draft proposes to establish that if the agricultural land is leased for a period of 25 years for the purpose of establishing a perennial plantation included in the list established by the RA government, then the lessee has the right to submit a request to extend the contract for another 25 years at least one year before the contract expires, which is met if the lessee has properly fulfilled all the obligations under the contract, and in case of extension of the contract term, the amount of rent for the new term must be in accordance with RA requirements set by law.

The Law "On Limited Liability Companies" (hereinafter referred to as the Law) was adopted in 2001 and over the years a number of technical problems have appeared, which in practice unnecessarily complicate the operation of LLCs, do not provide the necessary level of flexibility of relations and sometimes no longer express business the reality of practice. These problems and their proposed solutions are briefly presented below:

1. Problem. According to the law, persons wishing to establish an LLC sign a contract to that effect.

Reform: Make the conclusion of the contract on the establishment of LLC voluntary, taking into account that the agreements are already formalized in the protocol.

2. Problem. According to the law, the LLC charter must contain information about the company's participants. In practice, this leads to a situation where, for example, when a share is sold, the charter must be changed and registered in the general register every time. As a result, there is an unnecessary administrative burden and the need to convene a general meeting. 

Reform: Eliminate the requirement to include information about participants in the articles of incorporation by submitting that information in the founding resolution and further amend by making changes to the register of participants.

3. Problem. LLC participants often want to sign agreements with each other about the exercise of their rights and (or) the specifics of the exercise of rights to the share, which is not regulated by law. sign that they will always vote in accordance with the decision of the engineer-participant when making decisions on engineering matters.

Reform: Clearly define that LLC participants can enter into such an agreement, defining its subject matter, the procedure for concluding it, and its consequences.

4. Problem. In case of alienation of the share by the sole participant, it is sometimes necessary to make an additional decision of the sole participant to exercise the right of preference of the company.

Reform: Determine that no such determination is required.

5. Problem: The provisions of the Law on the pledging of shares (the share can be pledged when all shareholders have given their consent) unnecessarily hinder the pledging of shares and the possibility of confiscation without going to court. 

Reform: Define that. A. confiscation may be extended to the pledged share independently of other property, in accordance with the Civil Code of the Republic of Armenia, B. Other participants may in advance, at the time of pledge of the share, waive the right of preference, C. Establish registration procedures for the transfer of the ownership right to the pledged share in case of confiscation.

6. Problem: The law stipulates that if after the end of the second or every subsequent fiscal year, the net assets of the LLC are negative, the company is subject to liquidation, which is not consistent with the economic logic of many companies.

Reform: To eliminate the liquidation requirement, establish a publication requirement on the website http://www.azdarar.am and guarantees of debtors' rights.

7. Problem: The possibility of creating other LLC bodies is not clearly defined by the charter.

Reform: Establish such an opportunity by law.

8. Problem: The law does not provide for the possibility of assigning the powers of the general meeting to the council.

Reform: Establish such an opportunity by law.

9. Problem: It is not planned for the participants to unanimously make decisions on issues within the authority of the meeting without convening a meeting, which causes the need to perform additional actions for convening the meeting and unnecessary delays.

Reform: Establish such an opportunity by law.

10. Problem: The legal relations related to the appointment and termination of powers of the director are not clearly regulated by the law, the procedure and grounds for the termination of the director's powers by the general meeting, the labor-legal consequences of such termination, the effective procedures for the termination of the powers by the director at his will, are created as a result of the above , which does not want to continue its activities as the head of the executive body of a legal entity, is deprived of the effective possibilities to terminate this status by its expression of will.

Reform: Clearly defining that: A. the meeting has the right to terminate the powers of the executive body of the company at any time by terminating the employment contract without indicating the circumstances that are the basis for it. C. Pays the director a severance pay in the amount of not less than his 2-month average salary. D. The director has the right to apply to the meeting with the request to terminate his powers, and in case of failure to make such a decision within 1 month, to independently apply to the Agency of the Register of Legal Entities of the RA Ministry of Internal Affairs.

Within the framework of the reform, the threshold for recognizing the debt as bad without a court decision was raised to 300,000, in case of exceeding it, the decision of the arbitration court was also taken as a basis. In the case of certain transactions, it was allowed to use the notary's decision as a basis for debts up to 2,000,000 AMD

The reform proposes to make additions to the Civil Code of the Republic of Armenia, the Laws "On Limited Liability Companies" and "On Joint-Stock Companies" by defining the concept of a convertible loan agreement and the main conditions of its application, based on the business practices already established in the world and in the Republic of Armenia. In particular, it is proposed to establish that the loan agreement, according to which the borrower is a joint-stock or limited liability company, may stipulate that instead of the obligation to pay back the loan amount or part of it and interest or part of them, in the cases, procedure and conditions defined by the loan agreement, the borrower is obliged to allocate to the lender the number, type and class of shares determined in accordance with the procedure defined by the contract, or provide shares (convertible loan agreement). It is also proposed to establish that the possibility of exchanging shares or shares in a convertible loan agreement should be defined at the time of signing the agreement. and the normative legal acts of the RA Central Bank. The draft also regulates the specifics of conversion in case of providing the convertible loan in foreign currency. In particular, it is proposed to establish that in the case of a convertible loan provided in foreign currency, monetary investments in the authorized capital of the borrowing company are considered to be made in AMD on the day the request for conversion (in the case of a limited liability company, the application) is received (or considered received) by the borrowing company as published by the Central Bank of the Republic of Armenia: at the average exchange rate formed in the currency markets. Moreover, the convertible loan agreement provided in foreign currency must stipulate that the demand for conversion (of the limited liability company on the day the application is received (or considered received) by the borrowing company, the loan is renewed and replaced by a dram loan, within the framework of which the loan amount is converted into Armenian drams at the average exchange rate published by the Central Bank of the Republic of Armenia for the same day and formed in the currency markets.

It is also proposed to regulate the procedure for making a decision on signing a convertible loan agreement by limited liability companies and joint-stock companies and issuing shares/participation based on it. Thus, in the case of limited liability companies, it is proposed to establish that the general meeting of the company's participants may adopt a decision on signing a convertible loan agreement. According to the proposed regulations, in order to fulfill the convertible loan agreement, in which the SP company is the borrower, the lender submits an application to the executive body of the company within the period specified by the agreement, in the case of the lender being a participant of the company, regarding the increase of the company's authorized capital, by making an additional deposit by the lender in the amount determined by the convertible loan. on the basis of the nominal value of his share, to make a decision on approving the results of deposit investment by increasing and converting the amount and approving changes to the company's charter, and a participant of the company in the case of a non-lender, to accept him as a company, to increase the company's statutory capital, and to issue a share based on the deposit amount determined by the lender (confirmation of the results of the deposit investment by means of conversion) and to approve changes to the company's charter. If provided by the convertible loan agreement that the conversion is conditioned by reaching the conditions set by the contract, then the application must contain the justification for reaching those conditions.

With regard to the conversion process by joint-stock companies according to the convertible loan agreement, the draft proposes to stipulate that the lender submits a written request for conversion to the executive body of the Company within the period specified by the agreement, and if the convertible loan agreement stipulates that the conversion is conditional on the issuance of additional shares and in favor of the lender having reached the conditions set for their placement, then the written request for conversion must contain the justification for reaching those conditions. Upon receipt of the said request by the executive body of the Company, and if the convertible loan agreement stipulates that the conversion is conditioned by reaching the conditions set for the issuance of additional shares and their allocation in favor of the lender, then within 60 days after reaching those conditions, the Company is obliged to the convertible loan agreement to issue and allocate shares in accordance with the specified type, class and quantity in favor of the lender.The draft also specified the tax consequences related to the conclusion of the convertible loan agreement and the fulfillment of the obligations assumed thereby, in particular it was established that the interest payable on the basis of the convertible loan agreement in case of conversion of a share or share, such interest is considered paid at the time of conversion.

The bill proposes to make additions to the Civil Code of the Republic of Armenia, the Law "On Joint Stock Companies" and a number of laws, defining the concept of an option contract and the main conditions of its application, based on the business practices already established in the world and in the Republic of Armenia. In particular, it is proposed to establish that under the option contract one party (the option buyer) acquires the right to demand from the other party (the option seller) to perform the actions provided for in the option contract (including transferring or receiving property with ownership or other property rights, including property rights) ( exercise the option) within the period (the option's expiration date) and at the price (the option's exercise price) determined by it, and the option seller undertakes to fulfill that the requirement. An option can be a purchase option (call option), in which case the buyer of the option acquires the right to demand ownership or other property right to transfer property, including property rights, and a sale option (put option), in which case the buyer of the option acquires the right require the option seller to accept property, including property rights, with ownership or other property rights. It is also recommended to establish that the option contract is concluded in writing. If the buyer of the option does not present the demand that is the subject of the contract (does not exercise the option), then the option contract is considered terminated by law. An option contract may provide that the claim defined therein is deemed to be presented upon the achievement of the conditions set forth in the contract, if the contract also defines the criteria or procedure for determining the achievement of such conditions and the date on which the party is notified. It is also proposed to establish that in exchange for the provision of the right specified in the option contract (the right to request to perform the actions specified in the option contract), the buyer of the option shall pay the premium specified in the contract to the seller of the option in the period specified by the contract, in the form of cash or other property, except for cases specified by law or contract. :The option contract must specify the price of option execution and the order of its issuance in case of submitting the demand that is the subject of the contract. It is also recommended to make additions to the laws "On the registration of secured rights to movable property" and "On the state registration of legal entities, separate divisions of legal entities, institutions and individual entrepreneurs" by establishing the necessary structures for the registration of rights and restrictions arising from the option contract.

Whenever electronic components were imported into Armenia or engineering products were exported, it was necessary to submit an expertise results for the customs declaration that the given product was not of dual purpose at the time of export, and not of military purpose at the time of import. The business paid 48,000-60,000 AMD for each examination and lost several days of time. The issue was particularly sensitive for small R&D companies that were shipping unit products. This process of customs clearance was further aggravated when it came to goods previously imported or exported and already recognized as non-dual or non-military. SRC has created a new unit to carry out the examination itself. From now on, at the stage of customs declaration, the department no longer sends the goods for examination. In addition to SRC's initiative, in order to ensure the smooth operation of the department within the framework of the reform, expertise providing organizations are now obliged to import the codes and technical specifications of all received products that have passed the examination in live mode into the SRC system, which will help both the respective department and the business.

Taking into account the conditions of the existing bank guarantee schemes for participation in public procurement, companies with limited financial access avoided participating in public procurement tenders in many cases, as they were able to receive the funds under the bid only after the acceptance-handover. The problem was more pronounced for companies producing textile, furniture and similar products who have to buy raw materials to fulfill the order. Within the framework of the reform, changes defining the relationship between the state and the bank were presented in the framework of factoring, which from now on allows the business to receive the money immediately from the bank through factoring after winning the state purchase tender, ceding its right to receive money from the state to the bank.

The draft proposes to apply the following mechanism: instead of fining the Head of the Executive body for the failure to pay the wages of employees in time to fine the company, instead of applying the fine of flat 25% irrespective of the days of delay to apply 5% fine for the first case, 10% in case of repitition of the behavior within 1 year period. 

In the scope of the reform, the measure of responsibility applied in case of not issuing a cash register receipt, misprinting the price or carrying out any other violation of the cash register application, and in the case when all the rules of the cash register application have been observed, but the codes have been indicated incorrectly, in particular, the measure of responsibility should be reduced, now warning (as opposed to 200,000 AMD fine + 0.5% of sales) will be applied in the latter case, and within one year after applying the warning, in case of repeating the same violation, a fine of 10,000 AMD will be applied. 

The Government Decree for on-job training assistance program stipulates that SMEs who are engaged in production - manufacturing and who employ people who have not involved in the sector for the past 3 years (students, people seeking for requalification, displaced people from Artsakh, etc.) can receive 20% reimbursement on the salaries of those workers after 12 months, but not more than 500,000 AMD. To apply the SMEs need to enter the portal https://file-online.taxservice.am/ and fill out the statement 282 mentioning the name, surname and social card number of such workers. 

The reform stipulates:

• the payments to the SMEs by the retail chains should be made within 30 days for food stuff, within 60 days for non-food stuff

• new rules and definitions of abuse of a strong negotiating position: in case the accumulated non-paid sum is above 3,000,000 AMD and the deadlines passed by 30 days, the Competition Committee can fine the retail chain by up to 10% of its annual turnover

•  General requirements for trade network and supplier relations are defined.

• a list of information to be published on the official website of the commercial network was fixed;

• the criteria and conditions for the selection of the supplier's product, the entry of new suppliers into the commercial network are planned;

• the essential conditions of the contract to be concluded with the commercial network have been clarified;

• the maximum terms for payment by the commercial network to the supplier are defined;

• the terms and conditions for the display of products in the commercial network, including the terms and procedure for the promotion of products, the implementation of promotions, the establishment of privileges or other activities aimed at the promotion of products, are provided for.

The amendments propose changes in the RA Tax Code to enable the profit tax payers to deduct the donations made to public schools, universities and pre-vocational (craftsmanship), secondary vocational education institutions in the amount of up to 2.5% of their gross income (as opposed to 0.25%) from the tax base with profit tax. The same approach is proposed to be applied to donations to the Military Servicemen's Insurance Fund. The international experience was also studied as a basis for the proposal, which proves that many countries have created more favorable conditions for donations than Armenia. In Georgia, the free supply (provision) of goods and services by legal entities under public law (state schools, research institutes, HEIs, secondary professional institutions) is exempt from profit tax. In the US, organizations and individuals can reduce their tax base by the amount of donations made to scientific, educational, charitable and a number of other institutions, but not more than 10% of the taxable profit at the expense of the allowable amount for the following 5 years. In Finland, donations by organizations of up to EUR 250,000 to certain universities in the European Economic Area are deductible from taxable profits. Donations made to non-profit organizations in Germany are deducted from taxable profits up to 20%.In Italy, donations to schools, universities and scientific research are subject to tax exemptions of up to 10% of taxable profits. Donations made to preschools, educational and scientific institutions in Bulgaria are deducted from the taxable profit in the amount of up to 10%. According to the changes implemented in the Russian Tax Code in 2023. From January 1, provisions will come into force according to which, on the basis of the laws adopted by the subjects of the Russian Federation, it may be established that taxpayers have the right to reduce the profit tax transferred to the budget of these subjects by up to 100% of the value of the property (funds) transferred free of charge to educational organizations. the amounts. At the same time, free provision of property and funds to non-profit educational or scientific institutions owned by the state or community is exempted from VAT. In addition to the countries mentioned above, tax incentives encouraging donations by commercial organizations are also applied in the following countries: Australia, Argentina, Austria, Belgium, Canada, Chile, Czech Republic, Estonia, Greece, Hungary, India, Indonesia, Ireland, Japan, Latvia, Lithuania, Luxembourg , Malta, Netherlands, New Zealand, Norway, Portugal, Romania, Singapore, Slovenia, Republic of South Africa, Switzerland, United Kingdom, Colombia, Israel, Slovakia In these countries, as a rule, the allowable amount of deduction from the profit tax base is significantly greater than the amount applicable in Armenia, provided that the donations are made to charitable or other public good organizations that meet certain criteria. For example, up to 2% of charitable expenses can be deducted from taxable profits in Slovakia, in the Czech Republic: 5%, in Italy, Austria, Spain, Georgia - 10%, in Germany and Switzerland - 20%, in the Netherlands - 50%, in Ireland, UK and Australia - 100%, 7.In France, organizations can deduct up to 60% of their charitable contributions, but not more than 0.5% of their annual income. In Argentina, they can deduct up to 5% of their income amounts can be reduced from the current year's tax base in the amount of up to 7% of the previous year's income.

The amendments to the Law on Limited Liability Companies specify that the Company has now the right to distribute its profits among its participants no more than once a quarter (as opposed to only annual distribution limitation) which will facilitate the payment of profit share by SME entities to their participants in a legal manner thus stimulating re-investments. The proposed regulation also encourages proper accounting and internal record keeping by SME entities.

The reform implied changes to the Law "On Joint Stock Companies" by defining in it the concept of the SAFE contract and the main conditions of its application, taking as a basis the business practices already formed in the world and in the Republic of Armenia. In particular, according to the proposed regulation, it is defined that under the SAFE contract, one party, the investor, undertakes to invest in the Company's equity capital of the amount specified by the contract, and the Company undertakes to issue in the future and allocate to the benefit of the other party (the investor) determined by the contract, upon reaching the conditions specified by the contract or shares of the number, type and class to be determined in accordance with the contract. The parties determine the conditions defined in the contract by mutual agreement based on the principle of freedom of contract. As a rule, such conditions include public offering of shares and/or other securities by the Company, investment of a certain volume in the authorized capital of the Company by a third party, sale of the Company's shares or a certain part of them, etc.

In February 2022 the Government of Armenia approved the Armenian textile industry development plan and the resulting action plan for the period of 2023-2026. The legislative package was developed under the joint coordination of the EBRD’s Investment Council of Armenia and the Ministry of Economy, in collaboration with the UK Government’s Good Governance Fund. 

The main strategic goal is to ensure the improvement of the sector's competitiveness by promoting the growth of added value and productivity, as well as entering new markets with its own brand. A key role is assigned to the added value created per hour of work. This indicator reflects the productivity of this sector. 

As an institutional measure, it is suggested to calculate the index of added value per working hour for the companies of the sector every year and set an upper limit. Companies above the threshold will receive targeted support from the state. Support to sector businesses will be developed on the basis of 4 main principles: co-financing the business, tax support in the form of tax refunds, availability of measurable indicators for each measure to monitor performance and make appropriate changes and strategy flexibility, constant monitoring of results and additions and changes necessity.

Support measures are aimed at the following target  groups of beneficiaries: companies above the annual selected added value threshold (have the largest amount of support), textile companies located and operating in bordering communities, textile companies that increase the product complexity index.

Within the strategic development vision several main development directions were highlighted, namely: to improve the competitiveness of workers in the textile sector, to optimize and modernize business processes, contributing to the increase of efficiency and productivity, to modernize the production facilities of the textile industry by introducing high technologies that will contribute to the creation of more complex and high added value products, to ensure and encourage representation of Armenian brands in new consumer markets, etc.

The clothing industry is one of the 11 strategic sectors of Armenian economy aimed at exports, which is an important source of employment in the country, with more than 90 percent involvement of women. 2020 7400 people worked in the sector or 1.5 times more than in 2017.

The adopted strategic paper is available on the official source (here).

Remote and hybrid remote work has been defined, employee-employer relations related to it have been regulated, including issues related to compensation for necessary equipment, materials or costs associated with their acquisition, proper performance of work duties, access to it for the employer in a mutually agreed upon manner, provision, as well as the non-distribution of requirements for the maintenance of health and safety standards of employees on the employer.

Those employers who will attract highly qualified specialists (HQS) can apply for state subsidy from 20% to 70% of the salary paid to the HQS. The goal of the program is to increase the productivity of existing companies by two main means: to support businesses to attract highly qualified specialists, and to promote scientific research and experimental construction activities. 

Who can apply? 

Commercial and non-commercial organizations that have recruited highly qualified specialists (HQS) during the 12 months prior to the time of application can apply for assistance in attracting highly qualified specialists. 

HQS is considered a specialist who has lived outside of Armenia for at least 12 of the 30 months prior to applying to the program and meets at least one of the following conditions:

● graduated from any of the top 400 universities in the QS World University Rankings published in the year of application and received a bachelor's, master's and/or doctorate qualification/degree.

● has a minimum of 10 years of work experience in Forbes, Fortune, HeadHunter, NIFTY, Dow Jones, FTSE, S&P, SSE Composite, SZSE, KOSPI, KOSDAQ, BSE SENSEX, NSE of India, BOVESPA, IBrX, ITEL, Nikkei, TOPIX, DAX, In any of the world's leading companies included in MDAX, MOEX Russia indices.

Amount of support:

● In case of involvement of BOUMs with a bachelor's degree, a master's degree, or at least 10 years of experience in any of the leading foreign companies, the organization will be reimbursed 20% of the paid salary, but not more than AMD 1,000,000 per month.

● 50% of the paid salaries will be transferred to the organization, but not more than AMD 1,500,000 per month, in the event of the involvement of BOMs with doctoral degrees from any of the top 400 universities in the QS World University Rankings.

● 70% of the salary will be reimbursed to the university, but not more than AMD 2,000,000 per month, in case of teaching in RA universities of BOMs with a doctorate degree from any of the leading 400 universities of the QS World University Rankings.

How to apply:

Check your eligibility here: https://tinyurl.com/3cs7bn72 

Sign an employment contract with a specialist. After two months, submit an application with the following documents:

Copy of the specialist’s passport

Copy of the employment contract

Documents confirming the relevant qualification

Send the package to: [email protected] 

Compensation procedure: Reimbursements are transferred to the bank accounts specified in the businessmen's applications within 15 days after the end of each quarter. Compensations are provided for 36 consecutive months starting from the approval of the application. Support is provided under the condition that BOUM has been an employee of the given economic operator for at least 2 (consecutive) months prior to applying for support. The applications must be completed and sent to the RA Ministry of Economy.

Crowdfunding investment regulations have been introduced to allow the investment platforms being created as a mobilizing schemes for investments by the small companies for whom the banking loans are too costly. Given the big Armenian diaspora, now the investors from abroad can invest from 5$-100$ in business projects in Armenia with the automatic conversion of the investments into the shares. 

The purpose of the Government decree is to create access to affordable financial means for SMEs to modernize production capabilities and promote the introduction of new technologies to the Republic of Armenia, which will lead to an increase in the competitiveness of manufactured goods and services and an increase in labor productivity. In case R&D Companies apply now for the loan they can receive it through Government's subsidies at a rate of 0-2%. 

Through the reform, the sales tax regime was introduced for the SMEs with turnover less than 58,300,000 AMD per annum instead of the VAT tax + profit tax. The sales tax rate was due for payment on the quarterly basis and was calculated based on the following rates: trade - 3.5%, manufacturing - 3.5%, other activities - 5%.

Within the framework of the “RA Law on State Support in sector of Information Technologies”, certified companies operating in the IT sector can be granted a number of tax exemptions and reduced 10% personal income tax, if the latter has below 30 registered workers and are engaged in activities defined by law. Tax privileges can be extended to IT companies who are engaged in one of the following activities: a. software development, b. consulting activities in the field of computer technologies; c. data processing, information distribution on the network and related activities, d. web-page development, e. implementation of educational and research programs in the field of information technologies, f. electronic systems design, testing, production, computer animation, modeling, as well as integrated circuit design and testing.

A family enterprise is considered to be a business activity carried out jointly by more than one family member for the purpose of obtaining profit (income). Entities can work under simplified family business tax regime, in case their turnover does not exceed 18.0 million drams. They are exempt from business taxes and pay personal income tax in the amount of 5000 AMD for each family member involved. An entity can work under family enterprise tax regime, if either from January 1 - February 20, or within 20 days after the registration it has submitted the respective request to the tax authorities. 

Government Decree on approving the forms of accompanying documents, security certificates and compliance certificate for "Import, export, transportation within the territory of animals, products of animal origin, raw materials, feeds, complementary feeds, feed mixtures, feed additives, food, substances in contact with food and nutritional and biologically active additives procedure for issuing veterinary accompanying documents, safety certificates and certificates of conformity, veterinary":

1) after sub-point 4 of point 6, supplement N 1 with the following new sub-point 4.1:

"4.1) Form No. 5 veterinary certificate is issued for the transportation and sale of locally produced animal products and raw materials of slaughterhouse origin within the territory of the Republic of Armenia."

2) Add the number "5" after the number "3" to the 5th, 7th, 11th and 12th points of Annex No. 1.

3) Write the form N 5 of the appendix N 2 with a new edition according to the appendix.

Guided by Article 65, Part 4 of the Law of the Republic of Armenia "On Customs Regulation" and Clause "g" of Article 6 of the Law of the Republic of Armenia "On Chambers of Commerce and Industry", the Government of the Republic of Armenia decides:

1. To assign the powers of the authorized body of the Republic of Armenia government to the Chamber of Commerce and Industry of the Republic of Armenia to determine the country of origin of goods exported from the Republic of Armenia and to issue certificates or certificates confirming the status of privileged origin for the goods.

2. To establish that the general supervision of the issuance of certificates and certificates of the country of origin of goods of the Republic of Armenia is reserved to the Ministry of Economy of the Republic of Armenia.

3. On December 30, 2010, of the Government of the Republic of Armenia, "To approve the procedure for issuing the certificate of the country of origin of the product and to approve the procedure for conducting the examination, to make changes in the decision of the Government of the Republic of Armenia N 895 of December 31, 2000, and N 1246 of the Government of the Republic of Armenia of December 24, 2001 to make the following changes in Decision No. 1772:

1) in the preamble of the decision, replace the words "Article 158, Clause 4 of the Customs Code of the Republic of Armenia" with the words "Article 65, Part 5 of the Law of the Republic of Armenia on Customs Regulation";

2) in the entire text of the decision, replace the abbreviation "ATG AA" with the abbreviation "EATM ATG AA".

3) to the annex to the decision:

a. In point 6, replace the words "Customs Code of the Republic of Armenia" with the words "Law of the Republic of Armenia on Customs Regulation",

b. In clause 10.1, subparagraph 1, replace the words "Article 160 of the Customs Code of the Republic of Armenia" with the words "Article 67 of the Law of the Republic of Armenia on Customs Regulation",

c. In paragraph 25, subparagraph 3, replace the words "according to the Customs Code of the Republic of Armenia" with the words "according to the Law of the Republic of Armenia on Customs Regulation".

Through the reform, goods transported across the border of the Republic of Armenia from one carrier to one recipient with a single transport document, the total customs value of which does not exceed the amount equivalent to 200 euros are not subject to customs fees and are subject to easened customs clearance procedures.

The procedure for electronic customs declaration and access to the automatic customs declaration system for persons who do not have the qualifications of a specialist in customs formalities were integrated. 

Through the reform, in case the winners in the public procurement bids use more than 50 percent of local products during the execution of their contracts, the latter can receive a subsidized reimbursement from the  state budget in the amount of 1 percent of the contract. 

In the scope of the reform, amendements were made to the Civil Code of Armenia outlining the definition for leasing products, including sub-leasing, financial leasing, reverse leasing and many more. Secondary leasing terms and financial leasing were also defined. As well as the changes in the respective tax code on VAT payments to enable the flexible functioning of the leasing instrument in Armenia.