
Empowering Armenia’s High-Tech Future: New State Support Program Announced!
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With the aim of fostering the development of the high-tech sector in Armenia and following a comprehensive study of best practices from over 20 countries, the National Assembly of the Republic of Armenia adopted Law No. HO-498-N on State Support for the High-Tech Sector on December 4, 2024."
The key objectives of the Law are as follows:
enhance the competitiveness of Armenia’s high-tech sector;
attract skilled professionals and new talent;
invest in the continuous upskilling of employees;
strengthen Armenia’s position as an exporter of high-tech services.
With the application of the new law, the term “Information Technologies” has been replaced by “High Technology”, which refers to computer-based technologies, particularly software, service or management information systems, as well as all types of technologies used to create, transform, store, protect, process, transmit, and securely retrieve information in all formats, including data and images (both mobile and still).
Companies and individual entrepreneurs registered in Armenia are eligible to apply for state support if 90% of their turnover is generated from activities in the high-tech sector. The list of such activities is expected to be issued by RA government in the first quarter of 2025.
State support is provided to entities for:
labor migrants who have the legal right to work in Armenia (own a work permit), perform professional work, and are considered employees of a given economic entity. The state support is provided to the entity in the amount of 60 percent of the income tax calculated on the labor migrant’s salary and other equivalent payments or remuneration for work under a civil law contract.
the engagement of new employees. State support shall be provided to the entity in the amount of 60 percent of the income tax calculated on the new employee's salary and other equivalent payments or remuneration for work under a civil law contract. The term “new employee” refers to individuals entering the high-tech sector for the first time and performing professional work. State support for new employees is provided for three calendar years from the date of the employee's first professional employment.
Preparation and retraining of personnel performing professional work necessary for carrying out activities defined by the economic activity classifiers subject to state support, as established by RA government. State support is provided to the entity in the amount of 50 percent of the income tax calculated in the reporting period on the salary and other equivalent payments of an employee performing professional work who has undergone retraining, or on remuneration for work under a civil law contract. The preparation and retraining of personnel performing professional work involve the acquisition of new professional knowledge and continuous improvement, which is certified by a document issued by the relevant professional center conducting the training. Justifications for training are reviewed and approved or rejected by the Ministry of High Tech.
The Law enters into force on January 1, 2025, and will remain in effect for 7 years for points 2 and 3 described above. The state support described above in point 1 will be in effect only for 2025, after which it will be replaced by state support directly for labor migrants, rather than their employers, for a period of 7 years. Specifically, labor migrants employed by entities performing activities listed in the government’s classifier will be eligible for state support in the amount of 60% of the personal income tax on their remuneration.*
*The total support provided per quarter cannot exceed 50% of the total personal income tax calculated for all employees during the same period.
Entities that meet the requirements set forth in the Law may apply for state support on a voluntary basis through the platform. The platform will automatically approve or reject the provision of state support. It is expected to be launched no later than July 1, 2025. Until the platform is launched, applications from economic entities will be accepted and processed in accordance with the procedure approved by the head of the authorized body - the Ministry of High Tech.
State support is provided to organizations and individual entrepreneurs operating under both the general taxation system and the turnover tax system for the period from January 1, 2025, to December 31, 2031. Additionally, an organization or individual entrepreneur operating under the turnover tax system may continue to receive support beyond the third calendar year if they switch to the general taxation system.
Let’s shape Armenia’s high-tech future together. Contact us today to discover how your business can benefit from state support and growth opportunities in the high-tech sector.
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