Armenia - "The Caucasian Tiger"
Twenty-nine years have passed since Armenia regained independence. Not only has the Armenian government managed to carry out many reforms but also has advanced the country to become the "Caucasian Tiger". Armenia has reported one of the globes best results - last year Armenia delivered a record-breaking over GDP growth of over 8%.
Currently, diamond processing and the jewellery industry are the basis of Armenia's economy complemented with the production of machinery, electric motors, textile and chemical products as well as food processing and cognac production. Agriculture is dominated by grapes and vegetable cultivation as well as pig farming.
Base metals and related products are Armenia's main export commodities (about 1/3 of the total export value), mineral products, precious stones, base stones and related products, and ready-made food products. The European Union member states are the most important goods recipients - they account for 54.4% of Armenia's exports (Germany - 18.1%, the Netherlands - 14.8%) and the CIS countries; the share of exports is 17.1% (Russia - 12.7%, Ukraine- 1.5%), as well as Georgia (4.6%).
The main groups of goods imported to Armenia: machinery and equipment, mineral products, base metals and their products, vehicles, ready-made food products. The main suppliers list includes: Russia (20 - 25% of total imports) as well as China, Ukraine, Germany, Iran, Turkey and the USA.
The Armenian economy's dynamic development is particularly noticeable in the financial sector; well-developed bank-infrastructure makes it possible for the Armenian administration to boast the lowest number of financial crises in that part of the world. This directly translates into many companies' development stability. Such international banking groups as HSBC and Credit Agricole have marked their presence in Armenia.
The success of Armenia is also the result of a rapidly growing new technologies market based on qualified staff, as evidenced by the numerous technological centres and IT incubators. Armenia's technological potential has been appreciated by among others, Microsoft, which opened its Microsoft Innovation Centre. The centre trains future specialists and supports the development of innovative ideas and products. It is worth noting that Armenia is the internationally-valued technology hub as confirmed by choice of Yerevan to host of the World Congress on Information Technology (WCIT) in 2019.
The "open door" policy for investors
Armenia combines many factors which make it possible for technological and industrial sectors companies to develop rapidly; its exceptionally favourable investment policy and the government's friendly approach are just the examples. Prospective foreign contractors and cooperating parties are protected in Armenia by the foreign investments programme. According to the Programme, they are not the subject to possible expropriation of real estate or nationalization. In order to encourage foreign capital, the Armenian authorities have prepared many amenities for investors ranging from the free exchange of currencies through employee recruitment without the need to have special permits to start investment activities, up to the possibility for foreigners to have 100 per cent shares in Armenian companies. It is also worth noting that Armenia has signed several trade agreements (e.g. on the double taxation avoidance) with many countries, including from Poland.
The Armenian government has put the new technologies development high on its priorities list; thus, it has also introduced a 5-year period of total income tax and VAT exemption for new companies in the ICT industry.This solution has resulted in a 34% increase in this industry's market share. With 5% ICT total economy share puts Armenia at par with many developed countries. Not only ICT industry entities can count on the support and open-door policy, Armenia also supports small and medium-sized enterprises. If SME annual sales are below $ 240,000, they are only taxed 1.5%.
Armenia - the "gate" to new markets
There are additional advantages of the Armenian investment market; this is the "gate" for many European companies which can enter the Russian market, but not only. Armenia is a member of the Eurasian Economic Union (i.e. Russia's free trade area which includes the Central Asia countries). Armenia is also located close to the Middle East and North Africa, two economically significant parts of the world. Armenia has entered trade agreements with many European countries and has good, strong relationships with Silicon Valley.