Running a business in Armenia — whether as an individual entrepreneur (IE) or a limited liability company (LLC) — sometimes requires a pause. Projects go on hold, relocation happens, markets shift, or simply sales go quiet. Closing the company, however, can be too drastic. What if your business might restart in 3, 6, or 12 months? The solution is to freeze your IE or LLC. This is a legal and flexible alternative to liquidation, allowing you to suspend activity, avoid tax reporting, and preserve your business structure for future use.
What Does “Freezing” Mean in Armenia?
Formally, the term “freeze” is not found in Armenian law. It is a practical approach: the business simply stops being an active taxpayer, without being liquidated. The status of the company or entrepreneur remains registered, but no commercial operations are carried out.
This is one of the most convenient options in Armenia — alongside the ability to register a company remotely.
When you freeze your business, the tax burden drops to zero, invoices are not issued, and reporting obligations disappear. Your registration remains valid — ready to restart anytime.
When Should You Freeze Your IE?
You may consider freezing your individual entrepreneurship if:
- You are leaving Armenia for a long period;
- Your project is temporarily suspended;
- You no longer operate but want to keep the IE “just in case”;
- You want to avoid reporting and taxes without closing the business.
How to Freeze an Individual Entrepreneur: Step-by-Step Guide
Step 1. Complete All Active Obligations
Before freezing, make sure to:
- Repay all tax and social contributions;
- Submit all reports (quarterly, annual, social);
- Ensure no bank transactions are ongoing;
- Dismiss employees if you have any.
Tip: if you are on a fixed-rate tax system (for example, an IT freelancer under the simplified tax system), you still must submit a report confirming zero income.
Step 2. Contact Your Accountant
Only a licensed accountant in Armenia — with a digital signature (E-signature) and access to the taxpayer’s online cabinet — can officially freeze your IE.
The accountant:
- Logs into your taxpayer profile on the Tax Committee portal;
- Sets the status to “not conducting activity”;
- Confirms the status with an E-signature.
Processing time: around 10–15 minutes.
Step 3. Status: “Frozen”
From that moment:
- Your business is officially inactive;
- No invoices, contracts, or transactions can be performed;
- No taxes or reports are required until reactivation.
Any activity during the freeze may trigger penalties or tax recalculations.
How to Unfreeze an Individual Entrepreneur
When you’re ready to resume your business:
- Notify your accountant;
- The accountant removes the “inactive” mark in the online system;
- Your IE becomes active again — you can issue invoices, receive payments, sign contracts, and resume full operations.
Reactivation is immediate from the date of unfreezing, not from your first payment or invoice.
Common Questions About IE Freeze
Can I freeze my IE multiple times?
Yes, there are no limits on how many times you can suspend and resume. This flexibility is ideal for seasonal or project-based work.
Do I need to file reports during the freeze?
No, unless you had income earlier in that year. You must still file an annual report for the period when activity occurred.
What if I accidentally make a transaction?
That automatically reactivates your IE, and the tax office may issue penalties and backdated tax assessments.
What about employees?
All employees must be officially terminated before freezing. During the freeze, you cannot act as an employer.
Freezing a Limited Liability Company (LLC)
When Should You Freeze an LLC?
You may freeze your LLC if:
- You temporarily suspend business operations;
- You plan to leave Armenia;
- You want to keep the company structure for future projects;
- You have no clients or staff and want to avoid reporting.
Step 1. Prepare: Settle All Obligations
Before freezing, make sure to:
- Submit all tax, social, and accounting reports;
- Pay all outstanding debts and social payments;
- Dismiss all employees;
- Close or pause any contracts or lease agreements.
Important: an LLC with outstanding debts cannot be considered frozen — fines may apply.
Step 2. Contact the Accountant
The process is done exclusively online through the State Revenue Committee’s system by a licensed accountant with an E-signature.
The accountant:
- Logs into the company’s taxpayer profile;
- Marks the company as “inactive”;
- Confirms zero activity to the tax office.
Processing takes about 10–20 minutes and is done remotely.
Step 3. LLC Status: “Frozen”
After this:
- The LLC remains registered as a legal entity;
- It is not considered an active taxpayer;
- No reports or taxes are due;
- All operational activity is prohibited.
You cannot issue invoices, use the corporate bank account, or sign contracts — otherwise the tax service will treat the LLC as active again.
How to Unfreeze an LLC
When you are ready to resume business:
- Notify your accountant;
- The accountant removes the “inactive” status via E-signature;
- The company instantly regains full operational rights — to issue invoices, process payments, and hire employees.
Legal and Tax Aspects of Freezing
Taxes During Freeze:
- No profit tax;
- No social contributions;
- No mandatory reporting.
If your company was partially active in the same year, annual reporting remains obligatory.
Maximum Freeze Duration:
Officially unlimited. However, if a company remains inactive for more than five years, the tax office may initiate forced liquidation.
Tip: briefly reactivate and freeze again every 3–4 years to avoid this risk.
Comparison Table: Freeze vs. Liquidation
| Parameter | Freeze | Liquidation |
|---|---|---|
| Legal entity preserved | ✅ Yes | ❌ No |
| Time required | 1 day | 2–3 months |
| Cost | Minimal | Medium/High |
| Restoration | Instant | New registration needed |
| Reporting | Not required | Mandatory until closure |
| Convenience | ⭐⭐⭐⭐⭐ | ⭐⭐ |
Mistakes to Avoid
- Freezing with unpaid debts;
- Performing transactions (even small ones) during the freeze;
- Leaving active contracts unclosed;
- Forgetting to submit the final report before suspension.
Any violation automatically reactivates the company and may result in fines.
Quick Checklist: Freezing Your LLC
- Dismiss employees;
- Submit all reports;
- Pay all taxes;
- Stop using the bank account;
- Ask your accountant to file via E-signature;
- Get confirmation of inactive status.
Conclusion
Freezing an IE or LLC in Armenia is a smart, economical, and flexible way to temporarily suspend operations without losing your legal status, brand, or future opportunities.
It’s particularly useful for freelancers, seasonal entrepreneurs, startups on hold, or anyone who wants to minimize costs while staying ready to restart business activity in Armenia.
If you ever decide to restart, the reactivation process is fast, remote, and straightforward — Armenia remains one of the most entrepreneur-friendly jurisdictions in the region.
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