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BLACK SEA ECONOMIC FORUM
THESSALONIKI
23 FEBRUARY 2012
ARMENIA
1
REPUBLIC OF ARMENIA
YEREVAN
The capital of Armenia
• Total Area - 29.800 sq/km
• Population - 3,231,900
• Currency – Armenian Dram
BORDER COUNTRIES /
Border length in km
1. Azerbaijan - 566 km
2. Georgia - 164 km
3. Iran - 35 km
4. Turkey - 268 km
MACROECONOMIC INDICATORS
GDP
by years (percent of growth)
2006
2007
2008
14%
2005
13.4%
13.8%
2009
2010
2011
Jan-Jun
6.8%
-14%
2.6%
4.6%
… STRUCTURAL CHANGE
Real estate
development
Exploitation of raw
materials
Chemical
processing
Extractive
industries
Soviet Era
Modernization of
industrial
processes
Infrastructure
deployment
Transition Period
Education, science
and technology
Services and
E-services
Complex
engineering
E-government and
technoparks
The Next Decade
MACROECONOMIC INDICATORS
INFLATION RATES
by years (percent)
2008
6.7%
2007
5.2%
2009
2010
6.5%
9.4%
* estimated
2011*
5%
ARMENIAN EXPORTS
Major Export Items for Armenia are:
• Software
• Nonferrous metals,
• Unwrought copper,
• Diamonds,
• Mineral products
• Food products
ARMENIAN EXPORTS 2011
Russia 15.9%
Netherlands 9.7
%
China 3.1%
Germany 13.1%
United States 8.2
%
Iran 5.2
No export duty
Bulgaria 15.5%
%
IMPORTS BY COUNTRY
2010
Georgia UAE Israel
1% 1% 0%
Switzerland
4%
Russia
Belaruss
USA
4%
Ukraine
Turkmenistan
Iran
6%
Germany
Russia
29%
Italy
Bulgaria
France
Turkey
6%
Rumania
Belgium
Austria
Gr. Britain
Greece
China
10%
Belaruss
1%
Spain
1%
Holland
1%
Finland
1% Greece
1%
Gr. Britain
1%
Ukraine
7%
Finland
Holland
Spain
China
Turkey
Austria
2%
Belgium
2%
Italy
4%
Rumania
France Bulgaria
3%
3%
3%
Germany
6%
Turkmenistan
1%
Iran
Switzerland
USA
Georgia
8
ARMENIAN EXPORTS BY COUNTRY
2010
UAE
1%
Georgia
7%
USA
8%
Russia
Belaruss
Ukraine
Russia
14%
Belaruss
0%
Ukraine
3%
Turkenistan
0%
Iran
4%
Switzerland
9%
Turkenistan
Χώρες ΕΕ
Germany
Italy
Bulgaria
France
Rumania
Belgium
Austria
Germany
18%
Greece
Finland
Turkey
0%
Holland
Spain
Spain
3%
China
0%
Gr. Britain
Holland
15%
Finland Gr. Britain
0%
1%
Italy
3%
Bulgaria
Belgium
France 0%
13%
Rumania 0%
0%
Austria
Greece
0%
0%
Λοιπές χώρες
China
Turkey
Iran
Switzerland
USA
9
Trade over relation by GNP
10
Armenian exports to Greece
11
Greece’s exports to Armenia
12
MACROECONOMIC INDICATORS
Foreign Direct Investments
(million USD)
305
2007
2006
670
2008
2009
1257.6
840.7
2010
693.4
FDI INFLOWS
Russia 43.7%
USA 4.6 %
France 12.4%
Argentina 5.5 %
Greece 6.4%
Germany 6.5%
FDI – MAIN SECTORS
Telecommunication
 Energy
 Transport
 Mining sector
 IT sector
 Production of food
and beverages

other
32%
Transport
8%
Telecom
39%
Energy
21%
FOREIGN INVESTORS’ PROTECTION AND INCENTIVES
 Location giving access to Middle East and CIS
countries
 Free trade agreements with CIS countries, which
gives duty free access to 250 million consumers
 Favorable Investment Legislation
 “Grand father clause” for 5 years
 Free Repatriation of Profit

Talented workforce

No Restrictions on Foreign Investor Ownership

WTO membership
FOREIGN INVESTORS’ PROTECTION AND INCENTIVES







100% ownership permitted for foreign companies
Foreign companies, registered in Armenia have the
right to buy land
0 VAT applies for goods and services exported under
”Free Turnover” and “Re-exportation” customs
regimes
No restrictions on exchange of currencies
No restrictions on staff recruitment
No restrictions on remittances
On-line company registration
TRADE MARKETS GATEWAY
• MFN regime with 150
countries (WTO full
membership)
• FTA regime with CIS
countries (tariff free
access to 250 million
consumers market)
• GSP regime with EU,
USA, Canada, Japan
• GSP+ with the EU
INDEX OF ECONOMIC FREEDOM
The Wall Street Journal and The Heritage Foundation
2008
2009
2010
2011
28
31
38
36
The Index covers 10 freedoms – from property rights to
entrepreneurship – in 183
countries
TAXATION
VAT– 20 %
PROFIT TAX – 20%
INCOME TAX –
max.20%
Rates
No export duty
import tariffs
0% Or 10%
Simplified taxation
for Small and Medium Entreprises
CUSTOMS REGULATIONS OF ARMENIA
• All Exports from Armenia are Duty Free
• The Import Tariff Rates are 0% or 10 %
• Armenia is a Member of World Trade
Organization (WTO)
• Armenia Uses the Harmonized Code System
(HS) for Tariff Classification
• Full list of products with corresponding
tariffs – www.customs.am
FREE ECONOMIC ZONES
In the nearest future two free economic zones will be established in
Armenia.
1.Agriculture and food processing oriented FEZ - on the territory adjacent to
Zvartnots international airport
2.High tech oriented FEZ – on the base of the plant “Mars”
The Law of the Republic of Armenia on Free Economic Zones defines a
number of incentives for companies in FEZ:
The operators of free zones are granted profit tax, income tax,
value added tax, property tax, and customs duty payment privileges.
EDUCATION
More than
100 Research &
Development
Centers
More than 60 Universities
and Higher educational Institutes,
8 foreign universities:
•
•
•
•
5 Russian Universities
American University in Armenia
French University
European University.
Approximately
80.000 students
PREVIOUS RAPID
DEVELOPMENT…
2006 Size
Growth rate
USD Millions
Percent, 2002-2006
Food industry
455
Metals
265
6,1
10,3
Goods
Mining
Construction
materials
Machinery
252
70
11,4
280.0
Health care
65.3
IT services
71.0
Financial
services
70.4
Tourism
21,7
38
Communications
Services
5,8
48.2
25,3
25,2
15,1
47,8
17,4
TARGETED SECTORS
Information Technology
Agriculture
Bio
Tourism
Energy
Chemical Industry
Armenian IT sector is dominated by foreign investors
• The annual growth of IT companies’ establishment – 20-25%
• Export of 63% of IT output goes to over 20 countries (USA, Europe and the
CIS)
• Support of Government of Armenia through its declaration of IT as a
priority sector and by being itself a lead user of IT
• Existence of Skillful and Creative Cost-Efficient Labor Force. Monthly
salary of experienced software developer in Armenia is 900USD
• More than 6800 IT related Students
Innovative, ready for licensing out products in:
• Animal health
• Agriculture
• Advanced technology for polyacrylamide hydrogels production
• Innovative drugs for treatment of oncology, cardiovascular and CNS
diseases in different development phases
• Innovative new strains of bacteria effective in diary production with long shelf
life and better properties
ARMENIA: Economy Overview
Amines & Derivatives
Amino Acids & Derivatives
Peptides
Heterocycles
Furan, Pyran and its derivatives
Esters
Bioactive & Natural Compounds
Physiological Active Compounds
Polyhedric Systems
Quinozolines
Screening,Synthesis of Biologically Active
Compounds
Proteins & Ferments
Agrochemicals
Speciality Chemicals
Inorganic & Organic Reagents
Electrophoresis Reagents
Molecular Biology Reagents
Miscellaneous Oils
Pharmaceutical Forms
Pharmaceutical Substances
Fine Chemicals
More then 5.000 chemical and pharmaceutical
substances are produced in Armenia
 The energy sector is one of the most developed sectors of the
Armenian economy
 Nuclear, thermal, hydro power production
 Renewable and alternative energy, including wind energy and
biofuels – covers almost 25% of demand of Armenia, and is
planned to reach 30% or more by 2030.
 Unique business opportunity for investors.
* according to the law the Electric Networks of Armenian buys green energy
from suppliers for the period of 15 years, thus securing the market for the
producers for that period.
Jewelry and diamond processing are considered a
very attractive field for investment in Armenia
based on the existence of skillful diamond cutters,
modern equipment and tax privileges in Armenia.
Diamond processing is a predominant part of this
sector's activities. Nevertheless, jewelry, including
gold accessories, golden wristwatches, jewelry
articles and processing of semi-precious stones
has an old tradition in Armenia.
Today, 27 companies with
5000 employees (2500 in
diamond processing) are
operating in this sector,
excluding individual jewelers.
Agriculture
•Agriculture plays important role in the economy of
Armenia – constitutes 20 % of GDP
Total volume of production in 2009 was
555,7 bln AMD (around 1,6 bln USD)
• Tourism and tourism infrastructure development are among the priorities of
the Government of the Republic of Armenia
• Annual growth of the number of incoming tourists in Armenia is 15-20% in
average
•Armenia is the first country to adopt Christianity as a state religion in 301 AD –
more then 5000 historical monuments spread around the country, Some
included in World Heritage
• The longest ropeway in the World “Wings of Tatev” – 5.7 km
• Ski resorts – Tsakhkadzor with modern 6 lifts rope-way (926-1388m) with
carrying capacity up to 1200 persons
•Mineral Spa resports – Jermuk, Bjni, Dilijan, Arzni,
POLICY TRANSFORMATION
Macroeconomic Stability: Spend and Balance
230%
250
209%
200
150
110%
124%
141%
156%
178%
184%
100
50
GDP Growth Rate
2000=100%
0
2001
2002
2003
2004
2005
2006
2007
2008
VEHICLES FOR INVESTMENT
Equity and debt financing
through public-private investment funds
Venture funds
capitalizing high potential opportunities
Project-based investments
leveraging core assets
MAJOR INVESTORS
BLACK SEA ECONOMIC FORUM
THESSALONIKI
23 FEBRUARY 2012
Thank you for your attention
contact info : [email protected]
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