New 7-year state support program for IT startups in Armenia unveiled
YEREVAN, March 6. /ARKA/. At a government meeting on Thursday, Armenian Minister of High-Tech Industry Mkhitar Hayrapetyan presented details of a new, 7-year state support program for IT companies.
The program provides long-term tax breaks for startups from January 1, 2025, to January 1, 2032, with the possibility of extension (previously, tax breaks were granted for 1 year and extended thereafter). It also includes an income tax refund if certain conditions are met.
As Hayrapetyan explained, the program offers a 60% income tax refund to existing startups (with fewer than 30 employees) that have hired labor migrants from abroad since 2022 and/or will hire new employees. "In this regard, we primarily focus on young, talented personnel from among recent graduates and specialists who have undergone retraining," Hayrapetyan said.
Additionally, the program plans to provide three-month support with a 50% income tax refund for employees who have undergone professional retraining through educational programs.
Hayrapetyan emphasized that, for the first time, specific areas have been outlined as part of the high-tech sector. These include the production of electronic components, structural insulation panels, computers and components, communication equipment, measuring and testing devices, electromedical devices, optical and photographic equipment, optical-magnetic media, engines and turbines (excluding automotive pneumatic ones), hydraulic equipment, spacecraft, other aircraft and their components, combat vehicles, as well as the production of computer games, design, testing and production of software and integrated circuits, research projects in biotechnology, and other related industries.
Summarizing, the Minister noted that state assistance under the new program would apply to R&D programs (research and experimental development).
Armenian Prime Minister Nikol Pashinyan clarified that, as part of the new assistance package, the turnover tax rate for IT companies would be reduced from the current 5% to 1%. "Thus, the tax burden on companies is reduced. For companies involved in scientific research, the income tax rate is reduced from 20% to 10%," Pashinyan added.
Minister Hayrapetyan also informed that, under the already completed state support program, in 2024, the Ministry of High-Tech Industry of Armenia provided assistance to IT companies in the amount of 6.5 billion drams. He added that another 1.5 billion drams would be allocated until March 31, 2025, after which the program will be considered concluded.
On Armenia's IT sector
According to the Ministry of High-Tech Industry of Armenia, by the end of 2024, approximately 41.5 thousand employees worked in Armenia’s high-tech and information technology sector.
The technology sector accounts for 7-8% of Armenia's GDP. The turnover of the entire high-tech sector reached 1.15 trillion drams, with 915 billion drams coming from the information technology sector. ($1 = 394.30 drams).