Microbusiness in Armenia is a special regime that has been in effect for four years and resembles the self-employed status in Russia. This status offers significant advantages, including nearly full exemption from tax obligations. It applies to individual entrepreneurs (IE) and limited liability companies (LLC).
To qualify for the “Microbusiness” status in Armenia, the following conditions must be met:
- Establish an IE or LLC. The IE or LLC must not provide services in the fields of consulting, law, accounting, auditing, engineering, advertising, marketing, design, translation, medicine, dentistry, data processing, or information technology. Additionally, they should not be involved in trade in Yerevan or in shopping centers outside the city.
- Total revenue from the sale of goods or services for the previous tax year must not exceed 24,000,000 AMD.
The “Microbusiness” status allows businesses to avoid paying corporate income tax and VAT, effectively freeing them from significant tax liabilities. If the IE or LLC has employees, the personal income tax is a fixed amount of 5,000 AMD per month per employee.
To apply for the microbusiness status in Armenia, you must fill out and submit the “Application for Admission to the Microbusiness Tax Regime” through: https://fileonline.taxservice.am. This should be done within 20 days of registration.
Similar to the “turnover tax” regime (analogous to the simplified tax system in Russia), if more than 20 days have passed since the registration of the IE/LLC, it will not be possible to apply the microbusiness status or switch to the turnover tax regime during the current year.
Reporting Requirements for Microbusinesses in Armenia
- Annual turnover report: Must be submitted once a year by February 1 of the following year, covering all business activities.
- Monthly payroll reporting: If the company has employees, a personal income tax report for each employee must be submitted monthly by the 20th of the following month.
- Mandatory contribution: Residents are required to make an annual contribution of 18,000 AMD to the Army Insurance Fund for themselves.
If the annual turnover exceeds 24 million AMD, the company must switch to the Simplified Tax System (STS) or the Turnover Tax regime at a rate of 5%. The turnover cap under this regime is 115 million AMD per year. The application for switching to the Turnover Tax regime must be submitted within 20 calendar days from the registration of the individual entrepreneur or organization.
If the turnover exceeds the limit under the Turnover Tax regime, the IE or LLC will be moved to the General Taxation System (GTS), where income is taxed on a profits-minus-expenses basis at a rate of 18%. The reporting period for GTS is the calendar year, and the tax declaration must be submitted by April 20 of the following year, similar to the Turnover Tax regime.
Activities That Generally Qualify
The microbusiness regime is designed for tangible, hands-on, and small-scale production or trade activities that do not involve professional or knowledge-based services. Based on the Tax Code provisions and consistent with the exclusion list, the following types of operations can generally qualify:
Artisan & Repair Services
- Repair of household appliances and electronics
- Clothing, footwear, and furniture repair and alteration
- Handcraft production and small workshop operations
Agriculture & Food Production
- Small family farming selling own produce
- Cottage food production (dairy, preserves, baked goods)
- Beekeeping and apiculture
Small-Scale Manufacturing
- Woodworking, metalworking, and craft manufacturing
- Textile and garment production
- Production of consumer goods
Hospitality & Accommodation (with geographic conditions)
- Tourist guesthouses that include meals (breakfast, lunch, dinner) are permitted within Yerevan’s administrative boundaries, subject to specific provisions of Tax Code Appendix 3. This is a narrow exception, not a general rule for food service.
Trade (strictly outside Yerevan and outside shopping centers)
- Microbusiness status explicitly does not apply to trade activities within Yerevan or in shopping centers outside the city. Retail trade outside Yerevan and away from commercial malls may qualify, but entrepreneurs should verify their specific circumstances with a tax advisor.
Activities Excluded from Microbusiness Status
The exclusion list is extensive and was further expanded effective July 2025. The following are definitively ineligible:
Professional & Knowledge-Based Services — all of the following are excluded: Consulting, law, accounting, auditing, engineering, advertising, marketing, design, translation, medicine, dentistry, data processing, and information technology services.
Additional Service Exclusions per the Tax Code: Expert examination and forensic services; personal care and hairdressing; automobile repair and maintenance; real estate brokerage, mediation, and rental services; software development and data processing; scientific research, construction, and architectural design; real estate valuation and cadastral surveying.
Financial & Regulated Sectors: Banks, credit organizations, insurance companies and brokers, investment companies, securities market participants, pawnshops, and foreign currency exchange operations are all excluded, as are casinos, gambling operations, and lotteries.
Other Excluded Categories: Notaries, auditing firms, operators of saunas and bathhouses, and businesses engaged in trading (buying and reselling goods) as their primary activity.
2025 Amendments — Newly Removed Activities: Effective from July 2025, the government removed construction, real estate operations, legal and accounting services, management consulting, architectural and engineering activities, advertising and market research, and healthcare and social services from the list of activities eligible for preferential tax treatment.