Armenia remains one of the most attractive countries in the region for tech businesses. Rather than offering one-off relief, the government supports the IT sector through a long-term programme that runs until the end of 2031.
This guide explains which IT tax benefits Armenia offers today, who can claim them, how to register a company and how to join the High-Tech Registry. If you are comparing several countries in the region, see also our overview of IT business in Georgia.
Several factors make Armenia attractive to tech founders. According to the Ministry of High-Tech Industry, the sector’s annual turnover has exceeded AMD 1 trillion, and its share of GDP is approaching 7%.
Other advantages include:
The domestic market is small, so most companies focus on foreign clients.
The current system is based on Armenian Law HO-498-N on State Support for the High-Tech Sector and related amendments to the Tax Code. The law came into force on 1 January 2025, and its incentives apply for seven years, until 31 December 2031, with the possibility of extension. The Library of Congress has published a short summary of the law in its Global Legal Monitor.
The IT certificate system introduced in 2014 is no longer in use. It has been replaced by the state High-Tech Registry, maintained by the Ministry of High-Tech Industry. Only companies and sole proprietors on the registry can claim tax incentives and income tax refunds.
Support follows two tracks:
The tracks cannot be combined. A company chooses one based on revenue, team size and growth plans.
These standard rates apply to all companies outside special regimes.
| Tax | Rate |
| Corporate income tax | 18% |
| VAT | 20% |
| Personal income tax on salaries | 20%, flat |
| Dividend tax | 5% |
| Withholding tax on royalties and interest paid to non-residents | 10% |
Companies with annual revenue of up to AMD 115 million may pay turnover tax instead of corporate income tax and VAT. For most businesses the turnover tax rates are higher, but High-Tech Registry members pay just 1%.
Companies and sole proprietors registered in Armenia qualify if they meet these conditions:
Eligible activities include software development and maintenance, IT services, data processing, and research and development in technical fields. Revenue from any other activities must not exceed 10% of the total; otherwise the company loses the benefits.
The headline benefit for startups and small teams is the 1% turnover tax. It replaces corporate income tax and VAT and is calculated on gross revenue, with no deduction for expenses.
It is available if:
Example: with revenue of AMD 100 million, the tax is AMD 1 million for the year. Under the general regime, the same company would pay 18% on profit and, above the VAT registration threshold, 20% VAT as well.
The regime suits small outsourcing teams, development studios and freelancers registered as sole proprietors. Bookkeeping comes down to recording revenue, and the tax burden is predictable.
The regime must be chosen in advance. Existing companies apply by 20 February, while new ones apply at registration or shortly after. Returns are filed quarterly, within 20 days after the quarter ends.
If revenue exceeds the cap, the company loses the 1% rate and moves to the general regime. The tax authorities may aggregate the turnover of related parties, so splitting a business does not always help. Turnover tax payers also cannot use the payroll incentives described below. Employees’ income tax is still withheld at the standard 20%.
Companies with revenue above AMD 115 million or a large payroll usually do better under the general regime, paying 18% corporate income tax and using the payroll incentives. PwC Worldwide Tax Summaries lists all of these measures.
200% salary deduction. Salaries of staff directly engaged in high-tech work count double when calculating corporate income tax. The deduction is capped at 50% of the taxable base. The cap does not apply to government-approved R&D projects. The deduction does not cover foreign nationals without the right of residence in Armenia.
60% income tax refund. This measure covers two groups. The first is specialists entering the IT sector for the first time. The second is foreign specialists who hold an Armenian residence permit and did not work or pay income tax in Armenia before 1 March 2022. For this group, the refund is paid directly to the employee through a government portal each quarter. It raises the specialist’s income rather than lowering the employer’s costs.
50% income tax refund for retraining. For employees who complete internationally certified training, the company receives a refund for three months.
10% rate for researchers. Certified researchers pay personal income tax at 10% instead of 20%.
Total support is capped at half of the income tax calculated for all employees. Refund claims are filed electronically each quarter, usually by the 20th of the following month.
Most of the registration process is online. The typical steps are:
Foreign hires need a residence permit, in some cases a work permit, and an electronic signature to file refund claims. Some procedures are simplified for IT specialists.
Registry status is not a one-time formality. To keep the incentives, a company needs to:
Service descriptions in contracts and acceptance certificates should make it clear that revenue comes from qualifying high-tech activities. Vague wording such as “consulting services” can call the 90% threshold into question during a tax audit.
If a group has several companies, check in advance whether they may be treated as related. If their combined turnover exceeds the cap, every company in the group can lose the 1% rate.
If the conditions are breached, taxes are recalculated under the general rules: 18% corporate income tax and 20% VAT.
Before registering, answer a few questions:
If the answer to the first two questions is yes and the team is small, the 1% turnover tax is the best fit. If revenue is growing fast and salaries are the main cost, model the general regime with incentives from the start.
If Armenia does not fit your revenue level or business structure, consider the Belarus Hi-Tech Park (HTP). Its legal basis is Decree No. 12 “On the High-Tech Park”, and the special regime is in force until 1 January 2049. The HTP regime is extraterritorial: a resident can be based in any city in Belarus.
Key terms for residents under Decree No. 12 and the Tax Code:
Foreigners hired by an HTP resident, as well as founders of residents, can enter Belarus visa-free and stay for up to 180 days a year.
Unlike the Armenian regime, the HTP has no revenue cap, and its list of activities is broader, from software development to artificial intelligence, microelectronics and esports. Residents do take on obligations: a mandatory annual audit, an annual report to the HTP Administration and separate accounting for tax-exempt and other activities.
Investors also benefit from English-law-style instruments: HTP residents can use options and convertible loans, and shareholder agreements can be governed by foreign law, with disputes referred to foreign courts or arbitration.
Only Belarusian legal entities and sole proprietors can become residents. A foreign investor therefore first sets up a Belarusian subsidiary and then applies to obtain HTP resident status by submitting a business plan.
| Parameter | Armenia: 1% turnover tax | Armenia: general regime with incentives | Belarus HTP |
| Tax on company income | 1% of revenue | 18% of profit, 200% salary deduction | 0% corporate income tax, 1% of revenue to the HTP Administration |
| VAT | not payable | 20% under general rules | exempt on sales in Belarus |
| Revenue cap | AMD 115 million | none | none |
| Employee income tax | 20% | 20%, 50–60% refunds for certain groups | 13% |
| Benefits valid until | 31 Dec 2031 | 31 Dec 2031 | 1 Jan 2049 |
| How to qualify | High-Tech Registry | High-Tech Registry | HTP Supervisory Board decision |
Look beyond the rates: hiring, banking, client requirements and administration costs matter too. For example, whether an HTP resident is exempt from VAT depends on the type of transaction and the client, as we explain in our article on VAT for HTP residents.
The Armenian turnover tax suits a small team with predictable revenue: minimal bookkeeping and a clear tax burden. The general regime with incentives works for growing companies with a large payroll and in-house R&D. The HTP suits businesses that plan to scale without a revenue cap and build large teams.
If you choose Belarus, set up separate accounting, HTP contribution calculations and audit preparation from day one. Our accounting services for HTP residents cover these tasks.
No. The High-Tech Registry has replaced the IT certificate system. Eligibility now depends on registry membership and meeting the 90% IT revenue threshold.
Yes. A foreign individual or company can own an Armenian company, and a foreign national can be its director. The Armenian company receives the benefits once it joins the registry, so a foreign business only needs to set up an Armenian subsidiary.
No. Payroll incentives (the 200% deduction and the 50–60% refunds) are only available under the general regime, so a company has to choose one track.
The company loses the 1% rate and moves to the general regime with 18% corporate income tax and 20% VAT. It can then use the 200% salary deduction and other general regime incentives.
Yes. Sole proprietors (individual entrepreneurs) registered in Armenia qualify on the same terms as companies.
Dividends are taxed at 5%. For non-residents, the rate may be lower if a double tax treaty provides for it.
The 1% turnover tax and the income tax refund programmes run until 31 December 2031 and may be extended.
Armenia’s IT tax benefits now form a long-term, predictable support system. Small teams are best served by the 1% turnover tax, while growing companies can combine the general regime with the 200% salary deduction and partial income tax refunds. The key conditions are registry membership, at least 90% of revenue from IT activities and timely reporting.
Belarus offers an alternative with no revenue cap and a regime that runs until 2049. If you are deciding where to base your IT business or planning to set up a subsidiary and become an HTP resident, contact us and the Spex team will help you compare the options, prepare the documents and set up accounting.
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