The Government of the Republic of Armenia

Armenia is at the forefront of business environment and institutional framework-related reforms both in the region and the world.

According to the Doing Business 2012 report, published by the International Finance Corporation and the World Bank, 5 reforms were carried out in our country in the period from June, 2011 through to May, improving Armenia’s standing by 6 points to the 55th place.

“The World Bank published today the Doing Business-index for business environment. According to the World Bank report, we have stepped forward 6 points to reach the 55th place. It is important that we are the leader in the number of actual reforms.

The World Bank estimated that we have significant improvements in 5 areas and are the only one among 183 countries with a positive rating of reforms. Thirdly, we are the second behind Kazakhstan among the CIS countries. Some of our reforms will be reflected in the 2012 report,” the Prime Minister said in this connection.

Note that investment climate and business environment improvement is the key to Armenia’s economic development. The Government of Armenia is taking steps to make them simpler, more transparent and less costly. Serious efforts are made to provide equal conditions of competition, create business-friendly market infrastructures, as well as to design a balanced policy in the field of tax and customs administration.

Deputy Minister of Finance Vardan Aramyan cites the reduced frequency of fiscal payments and tax returns, profit tax, property tax as an example of successful reform.

According to him, there will be a noticeable change in the next year’s report, as long as the a law comes effective stipulating that those entities with a turnover of AMD of 58.3 million will be required to submit reports electronically that may facilitate work, rule out red tape and reduce corruption risks.

A separate column is used to assess how liberal is a country in terms of granting loans, to what extent society and businesses are involved in these processes. Here too we a 5-point improvement.

The Central Bank has adopted a number of legal acts aimed at ensuring the confidentiality of credit information to credit bureaus, licensing lending entities (this sphere was not regulated prior to the adoption of these regulations), providing increased access to credit information.

The principle of one-stop shop for business registration in 15 minutes or electronic form for our country advanced 10 places. Deputy Minister of Justice Orbelyan believes that Armenia’s position will be further improved next year. The possibility of offering electronic signatures to entrepreneurs from a one-stop shop is being discussed. Steps are underway to ensure continued improvement of service quality.

The greatest progress (38 points) was stated in terms of granting construction permits. There have been reduced the procedures and deadlines necessary for obtaining construction permits. In particular engineering support services for facility design are provided in conjunction with the architectural task. The deadlines have been revised and reduced, which means that next year’s estimate will be positive again.

We have some regression in the right to property registration and protection of investment performance. According to Aram Orbelyan, there are no changes in absolute numbers, we just did not reform the field this year, unlike other countries 6.

Though the seal requirement has been cancelled for legal persons and the Judicial Acts Enforcement Service has improved the bidding procedure for the sale of debtor’s assets, however, the regression is greater than the index of contract enforcement.

It is calculated from the date of breach of contract until the date of amount recovery, which still calls for enough time. Nevertheless, mechanisms are being developed that will make the process more transparent.

Those responsible for Doing Business rating will have to specify why the foreign trade index is down in Armenia. The calculations are based on a survey of entrepreneurs, according to which there is an increase in the number of export-import documents. This is not the case as a matter of fact. The situation must be examined in order to understand where exactly the business costs are up.

Foreign trade-related reforms have been implemented to control the number of technical goods required for certification, metrology control, veterinary control, phytosanitary control, issuing certificates of origin etc.

A number of reforms have been implemented to improve electronic customs declarations and customs clearance systems.

The types of activities subject to licensing have been reduced from 169 to 96, 12 of which are simple ones and 84 - complex types of activities subject to licensing, as well as the acquisition of licenses for electronic access (www.e-gov.am).

Enterprise registration, licensing, and tax returns online and receive the introduction of this system.

On June 18, 2011, the Republic of Armenia Law on Amendments and Supplements to the Republic of Armenia Law on Joint-Stock Companies was passed to improve the interest of the business (economic activity) mechanisms for identifying and expanding the liability of directors.

On June 23, 2011, the government approved a timetable for introduction of the corporate management code for those entities with 50 per cent public stake. Work is underway on the design of guidelines for the introduction of the Corporate Management Code.

State registration of property registration has been accelerated in the coefficients.

The government has decided to establish business support hotlines and an interagency board to deal with State Revenue Committee-related grievances. The methodology of reporting has been amended: a new factor is applicable to business connection to electrical networks.

Note that we are back 2 points to the 150th place. But the situation will be much better next year owing to the government’s efforts aimed at revising the timings, steps, as well as the fees payable by entrepreneurs while getting connected to the electricity network.