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Weekly Business News Digest

June 29, 2019

New Tax Code Ratified

The Armenian parliament adopted at the second and final hearing the Tax Code amendments package with 73 votes in favor and 32 votes against. One of the main amendments is the flat income taxation. Income tax will be 23% and will gradually be reduced to 20%. The revised amendments call also, among other things, for setting an annual increase in the fixed excise tax rate at 3%.

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Armenia’s economic activity index grows 7.3% in May

Armenia’s economic activity index has grown 7.3% in May 2019 compared to May 2018. In particular, industrial production volume increased 10.2%, the construction volume – 2%, trade turnover – 4.9% and services volume – 14.8%. Consumer price index increased 2.8%, and the index of industrial production prices – 1.2%. Electricity production also increased by 1%.

Armenia’s exports up by 11.7%, while imports down by 10.5%

Armenia’s exports totaled $208.3 million in May 2019, 11.7% more than in May 2018, while in Jan-May 2019 shrinking 0.9% to $960.8 million, compared to the same period 2018. Imports shrank 10.5% in May 2019, compared to the previous month, to $395.1 million, and 3.4% in Jan-May 2019, compared with the same period a year earlier, to $1 890.3 million.

Property tax in Armenia will increase significantly from 2021

Property tax in Armenia will increase at least 2.5-3-fold. On June 20 the government approved the draft law "On the establishment of the procedure for assessing the cadastral value of real estate close to the market price in order to calculate real estate tax". According to the State Cadastre the current cadastral value of real estate is badly behind the times, since the last time the assessment was carried out back in 2002.

Minimum salary to be increased in Armenia 23.6% to AMD 68,000

The Armenian government upheld lawmakers’ proposal to increase the minimum salary from the present AMD 55,000 to AMD 63,000, and added to this proposal another 5,000 to make the salary AMD 68,000. Deputy Labor and Social Affairs Minister Gemafin Gasparyan said calculations have shown that every family should have at least AMD 68,000 not to find itself in an utter penury.

Armenia-Georgia Business Forum held in Dilijan

The Armenian-Georgian business forum kicked off June 27 in Dilijan with speeches by Armenia’s Deputy PM Tigran Avinyan and Georgian Deputy PM, Minister for Territorial Development and Infrastructures Maya Tskitishvili. Nearly 200 businessmen from Armenia and Georgia are participating in the forum. ATN’s Harout Hayrapetian, board member of Eurochambers, was also present and met with the DPM Avinyan and other high level participants.

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Bridging Belgian entrepreneurs to the Eurasian market - Diplomatic World interviews BACC president

Diplomatic World met with Valéry Safarian, president of the Belgian Armenian Chamber of Commerce. According to Safarian for more than 20 years Belgium has been one of the top European trade partners for Armenia, which recently joined the Eurasian Customs Union. This makes Armenia “a gate to” one of the largest world’s market (this market includes Russia, Kazakhstan, Kyrgyzstan and Belarus). Thus, entering the Customs Union with goods and services to export or to produce through Armenia is definitively a good strategy.

Investment forum held in Dilijan explores investment opportunities in Tavush

Dilijan hosted an investment forum, organized by the government to present the region’s capacity to absorb local and foreign investments. The gathering brought together representatives of the local agricultural and processing industries, foreign businessmen, representatives of international organizations, ambassadors and members of the government and parliament.

Youri Djorkaeff a special guest at Armenia Engineering Week event

"I knew Armenians had big hearts, now I know they’ve also big brains," Djorkaeff said at Vanadzor engineering event. The former French international, 1998 FIFA World Cup and Euro 2000 winner participated in the Armenia Engineering Week event in Vanadzor at the invitation of High-Tech Industry Minister Hakob Arshakyan.

US assistance to Armenia will increase by $7.4 m and total $80 m

With Amendment No. 12 which the United States Agency for International Development (USAID) had submitted, additional $7.449mn allocations are envisaged to fund the USAID program on infrastructure, agriculture, and tourism in Armenia. As a result, the grants which the US is providing to Armenia within the framework of the aforesaid agreement will total $80.7 million.

Converse Bank and EDB sign $6 million agreement on SME lending

Converse Bank and the EDB signed a loan agreement for $ 6 million to finance micro, small and medium businesses in Armenia. "The signing of this agreement is a start to long-term cooperation with the EDB. This project will focus on expanding financing in the real economy. The Converse Bank portfolio on lending to SMEs reached 35.4 billion drams or $ 73.2 million, with an annual growth of 46.2%.

Effective cooperation with FAO discussed in Rome

Deputy Minister of Economy, responsible for agricultural Artak Kamalyan participated in the 41st session of the UN FAO in Italy. During the visit, Kamalyan held meetings with the ministers of agriculture of France and Georgia, as well as with representatives of the US Agricultural Department. During the meeting, the Deputy Minister with the Deputy General Director of FAO, Regional Representative for Europe, Central Asia Vladimir Rakhmanin outlined the ways for the most effective cooperation between the organization and Armenia.

Government incentives to 25 companies pledging a total of $254 m investments in 2019

According to Pashinyan, in the first 5 months of 2018, the government approved 11 projects, which were to make $35.3 million worth investments and create 502 jobs in 5 months. In the same time span of 2019 the government approved 25 projects, which are to invest $254 million and create 2,379 jobs.

Government of Armenia awards customs benefits to three companies

The government of Armenia awarded customs benefits to three companies, which pledged to invest 30 million US dollars in the expansion of production. Manukyan Brandy Factory was awarded customs benefits for the production of grape and fruit wines, brandy and fruit vodka, Royal Voice Group - for creating orchards and Kanaker Garment Factory - one of the oldest companies in the textile industry - for the import of raw materials.

Grain provision to Armenia to increase from 75.5% to 102% in 2020 - EEC

The level of Armenia's provision with grains in 2020 will increase from 75.5% to 102%. According to the press service of the EEC, the level of provision of Armenia in meat and meat products in 2020 will increase from the current 72.4% to 86.8%, including for beef from 91.5% to 99.2%, and milk - from 95% to 102%, vegetable oil - from 86% to 94%.

Armenia's PM Russian President discuss secure export routes

The export of plant and animal products increased by 76.6%, as compared with May of the previous year. Summing up January to May - the figure is 11.8% compared with the same period of 2018. CB dollar reserves have increased by $185 million - a good signal - but in the long run, the economy should be so constructed that the export of raw material is minimized, or eliminated, said Pashinyan.

Siemens to provide power island, financing for 250 MW CCPP in Yerevan

Siemens will supply a complete power island for the new Yerevan 2 combined cycle power plant at the existing plant site in Yerevan. The company will also operate and maintain the plant for a period of 20 years. Siemens Financial Services (SFS) – Siemens' financing arm – holds a 40 percent share in the special-purpose project company ArmPower founded specifically for this project.

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IBM delegation visits Armenia

IBM representatives Pascale Xelot, director for developer ecosystems & startups of Europe, and Clemence Lebrun, cloud developer advocate of Europe paid a visit to Armenia on June 20-22. They met with Open Government Data Hackathon winners and Climate Change Tech Accelerator’s ventures, as well as Armenian startup ecosystem IT Ministry reps, visited Engineering City and held talks during BarCamp EVN19 about business and cloud innovation.

Armenian startup aims to build large CPU designing company

An Armenian startup is aiming to build a large processor designing company․ “The existing CPUs designed by Intel, AMD, etc. are general-purpose processors and can calculate anything, but big companies are interested in algorithms, and they want these algorithms to work 100 or 1,000 times faster,” GROVF CEO Khachik Sahakyan said.

Ameriabank offers innovative solution for opening e-stores

Ameriabank and Naghashyan Solutions Company have come up with a joint proposal designed for legal entities. According to an Ameriabank press release, from now on, all legal entities and individual entrepreneurs who wish to open an online store will be able to get a solution with their preferred design and the ability to integrate a fast and simple payment instrument vPOS (Virtual POS Terminal) of Ameriabank.

After restarting the processing plant of JSC Teghut, the company plans to increase the staff to 1000 people

After restarting the processing plant Teghout and entering the planned production volumes, the company plans to increase the staff to 1,000 people, and therefore now actively selects specialists with relevant professional education, qualifications and experience. On March 29, 2019, a new leadership was appointed at ZAO Teghut in order to conduct large-scale preparatory work and further normal operation of the processing plant.

Yerevan's Engineering City to have self-driving buses

The Engineering City being built in Yerevan’s Bagrevand district will have self-driving mini-buses to transport the “citizens,” Gurgen Mardoyan, Technical Director of the YEA Engineering said. He said the self-driving cars are now being actively tested in San-Francisco, Singapore and the US State of Arizona. He refrained from mentioning concrete dates for the commissioning of the buses, but added that Armenian specialists are involved in the testing.

Armenia approves free healthcare for all citizens under 18

The Government of Armenia has approved a decision on providing free healthcare for people under the age of 18. Before this decision, only children up to 7 years of age were provided with free healthcare. Deputy Healthcare Minister Anahit Avanesyan presented the initiative to the Cabinet. She said the forecast deficit until yearend will be compensated and the government will provide 1,75 billion drams.

Three Armenian airlines to operate more flights to Russia and Georgia

After Russian President Vladimir Putin’s order to suspend Russian flights to Georgia from July 8, Armenian carriers were asked about opportunities in participating in passenger transportation from Russia to Georgia and vice-versa. Three carriers responded: Armenia Aircompany, Taron Avia and Atlantis European will increase the number of passenger flights to Russia and Georgia.

Georgian association suggests launching shuttle bus travels between Baku, Yerevan, Trabzon and Georgia

Shalva Alaverdashvili, the head of the Association of Hotels and Restaurateurs of Georgia, suggested that free shuttle buses start traveling between the airports of Baku in Azerbaijan, Yerevan in Armenia and Trabzon in Turkey and Georgian cities to transport Russian tourists to the Black Sea coastal resorts. His proposal comes after Russian President Vladimir Putin ordered a temporary ban on flights from Russia to Georgia effective July 8.

"7 places to experience Armenia’s enchanting natural beauty" - Wanderlust

British travel magazine Wanderlust has published acclaimed Armenian artist Narine Arakelyan’s photographs from the “gorgeous places in her stunning homeland that inspire her. They're bound to delight you, too…” In an article titled "7 places to experience Armenia’s enchanting natural beauty", the magazine presents some of Armenia’s top tourist destinations, according to Arakelyan.

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ATN is the only cross-sectoral pan-Armenian business organization counting 17 associations in 13 countries. It aims to rebuild the centuries-old Armenian trade networks by promoting new linkages. ATN provides a platform for Armenian chambers of commerce and business associations to exchange knowledge and experiences, as well as promote the economic development agenda in Armenia.

Armenian American Business Council, Armenian American Chamber of Commerce, Artsakh Chamber of Commerce, Australian Armenian Chamber of Commerce, Belgian Armenian Chamber of Commerce, Cámara Argentino - Armenia, Canada-Armenia Business Council, Chamber of Commerce and Industry of the Republic of Armenia, Chambre de Commerce et d’Industrie Franco-Arménienne, Dutch Armenian Chamber of Commerce, Groupement Interprofessionnel International Arménien, Iran Armenia Chamber of Commerce, Lebanese Armenian Business Association, Romania Armenia Chamber of Commerce and Industry, ROSARM Russia Armenia Business Alliance, Switzerland Armenia Chamber of Commerce, Union of Manufacturers and Businessmen of Armenia

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