Employing Remotely in Armenia: A Rising Tech-hub

As of 2021, Omnipresent is helping global companies employ remotely in Armenia. Though a small country, with a population of 3 million, Armenia has a booming tech and start-up industry. This is why our clients are drawn to the country’s buzzing talent pool. While employment regulations are strict in Armenia, Omnipresent is able to ensure compliance so you can hire the best talent in the country.

Armenia’s Future as a Tech-Hub

Armenia has been growing as a tech-hub and IT-outsourcing location. A recent World Bank report found that this trend will only accelerate in the future. Though a young nation, its technology scene has been thriving consistently. This trend is rooted in its history as an innovation centre during the Soviet Union.

Consequently, many international technology companies including Intel and Microsoft have offices in the capital Yerevan. In addition, many Armenian start-ups, like Shadowmatic or Picsart, have received international attention for their pioneering work. With the country brimming with innovative ideas, it’s no wonder Armenia is proving to be a resource for outstanding human capital in the tech scene.

Developments in Armenian Employment Law

Armenian employment law is stringent and enshrined in the country’s labour code. As all labour codes, Armenia’s law oversees things like minimum wage, paid leave, and a limit on working hours. These are important things to watch out for if you are considering employing in Armenia, particularly as a greater emphasis is being placed on employer compliance. Employers in Armenia will need to to expect an increased enforcement of labour legislation and employment contracts in the future.

Employment contracts in Armenia tend to be permanent, but can be fixed term under certain conditions. Currently, the work week is limited to 40 hours a week. Maximum working time, including overtime, in a week is 48 hours a week and 12 hours a day. The maximum amount of overtime in a year is 120 hours. More recent additions also include parental leave, which is to be paid at the rate of an employee’s normal salary.

To be able to employ in Armenia, employers need a presence in the country! This means opening a foreign subsidiary. However, this isn’t always an option, especially for younger and smaller companies, and those wanting to test new waters. 

As an Employer of Record (EOR), Omnipresent can employ talent on your behalf so you don’t need to set up a subsidiary. We set up shop for you and ensure you and your employees are fully compliant at all times.

Taxes & Payroll

One of the perks as an employer in Armenia is that you don’t pay any payroll taxes or contributions for employees. Employees, on the other hand, do. 

Those earning up to 500,000AMD per month pay 5% of their monthly income towards social security, whereas employees earning over 500,000AMD per month pay 10% of their income towards social security.

Moreover, income tax is not calculated according to tax brackets, but as a flat rate. This is 22% of the monthly income as of 2021. However, this will decrease to 21% in 2022 and 20% in 2023. This applies to all workers whether they are Armenian citizens or residents, or foreign employees.

In Armenia, the employer is considered a ‘tax agent’ for their employees. This means that employers are responsible for paying employee taxes and contributions to state accounts by the 20th of every month. Sounds complicated? Not to worry. Omnipresent covers all taxes and payroll for you.