This article provides a detailed review of the availability and taxation of the sole proprietorship equivalent in Armenia, officially known as the “Individual Entrepreneur” (IE), with a focus on eligibility, registration, tax regimes, and regulatory conditions as of 2025.
Individual Entrepreneur Status in Armenia
Armenia offers a straightforward legal structure for individuals seeking to operate a business under their own name: the status of Individual Entrepreneur (IE, f ff fffffffff, Fizikakan andz dzernarkater). This format allows qualified citizens and residents to legally conduct business, issue invoices, and meet tax obligations without forming a separate corporate entity. The status is widely used across Armenia’s private sector.
Who Can Register as an Individual Entrepreneur?
- Armenian citizens
- Armenian residents (including stateless persons with legal residence)
There are no nationality or language restrictions, but registrants must have legal residency in Armenia.
Key Features & Scope
- Operates as a natural person (not a separate legal entity)
- Permitted to invoice, employ staff, and own or rent commercial property
- Liability is not limited: the individual is responsible for business debts from personal assets
Taxation of Individual Entrepreneurs in Armenia (2025)
Taxation for Individual Entrepreneurs is structured around two main regimes. Eligibility for each is based on expected annual turnover and business type.
| Tax Regime | Eligibility Criteria | Income Tax Rate (%) | VAT Requirement | Other Obligations |
|---|---|---|---|---|
| Microbusiness Regime | Annual turnover up to 24 million AMD ($60,000 USD) | 0% (exempt) | Not required | Fixed social payment: 5,000 AMD ($12.50 USD) per month |
| General Tax Regime | Turnover above 24 million AMD or non-qualifying activities | 20% | Mandatory if turnover > 115 million AMD ($287,500 USD) | Standard business reporting |
Important Financial Thresholds (2025)
- Microbusiness eligibility cap: 24 million AMD/year ($60,000 USD)
- VAT registration threshold: 115 million AMD/year ($287,500 USD)
- Fixed social payment (microbusiness): 5,000 AMD/month ($12.50 USD)
Application and Registration Process
Registration for Individual Entrepreneur status is carried out through the State Register of Legal Entities. The process is streamlined and can be completed:
- Online via e-register
- In person at the State Register offices
Details and forms are provided on official government platforms. Processing is generally efficient, with most registrations finalized within a few business days.
Official References
- Armenian Tax Service
- Ministry of Economy of Armenia
- State Register, e-register system
- State Revenue Committee
Pro Tips for Individual Entrepreneurs in Armenia
- Carefully track your turnover if you wish to remain in the microbusiness regime—exceeding the 24 million AMD annual threshold triggers standard income tax and reporting.
- Use the e-register platform for a faster and paperless registration experience.
- Plan for the fixed monthly social payment, even if you declare no profits under the microbusiness regime.
- If your business is close to the VAT threshold, forecast revenue growth to coordinate any future VAT registrations in advance.
- Consult official government sources for any regulatory updates before registering or making structural tax decisions.
Armenia’s Individual Entrepreneur status offers a flexible and accessible route for business activity, with fairly streamlined registration and clear eligibility rules. The microbusiness regime (available up to 24 million AMD turnover) allows for tax-free operations aside from a nominal social contribution, while larger or more complex businesses transition to a 20% income tax rate and possible VAT obligations. Registration can be handled quickly online, and all core tax rules are set by transparent statutes. Prospective applicants should verify regulations annually and monitor turnover to optimize tax exposure throughout the year.