Daniel A. Witt, President of International Tax and Investment Centre

In May 2024, Armenia proudly hosted the European Bank for Reconstruction and Development (EBRD) annual summit in its capital, Yerevan. This landmark event underscores Armenia's emerging significance on the international stage, particularly in the realms of science and high technology.

A Hub for Innovation and Investment

Over recent years, Armenia has made remarkable strides in cultivating a thriving high-tech industry. The country has evolved into an attractive hub for innovation, drawing in international companies and investors keen on tapping into its expanding tech ecosystem. This growth is not incidental but the result of a concerted effort by both the Armenian government and the private sector to foster an environment conducive to technological advancement and innovation.

An example of such strategic investment is the Armenian office and R&D Centre of Synopsys. A key player in the global technology landscape, Synopsys has made significant strides in the fields of electronic design automation (EDA), design for manufacturing (DFM), and semiconductor intellectual property (IP) solutions through its research and development efforts. Its presence not only underscores Armenia's potential as a hub for technological innovation but also has a profound impact on the local economy and workforce development.

Other examples include establishment of R&Ds and local branches by companies such as Nvidia, Adobe, , etc.

Government Initiatives Fueling Growth

The Ministry of High-Tech Industry has been instrumental in accelerating the growth of the high-tech and science sectors. Recognizing the potential of these industries as catalysts for economic development, the government has implemented a range of policies and initiatives designed to attract international investment. These include favorable taxation policies, such as 0 % profit tax and 10 % income tax for IT sector companies employing less than 30 people, as well as investments in education and infrastructure to nurture a skilled workforce and facilitate innovation.

Moreover, the government's commitment to creating a favorable business climate is evidenced by its efforts to streamline regulatory processes, thereby making it easier for foreign companies to set up and operate in Armenia. These measures, coupled with Armenia's strategic geographical location and highly educated talent pool, make it an increasingly attractive destination for companies looking to invest in the high-tech and science sectors. All of this has led to the tech industry becoming the country’s fastest-growing sector, expanding by more than 30% in 2023.

Rapid Economic development and impressive projects by the government

In recent years Armenia has been performing very well on the overall economic development. The country showed impressive results by having GDP growth of 8.7% and 12.6% respectively in years 2023 and 2022. This is a combined result of external factors and the Armenian government’s strategic focus on economic reforms and liberalization. The government has announced several ambitious projects which are believed to contribute to the economic wellbeing and the development of the country. In 2023, the Prime Minister Nikol Pashinyan announced the project “Crossroad of Peace” in an effort to enhance regional cooperation and connectivity, as part of normalization of relations with neighboring Azerbaijan and Turkey. The government is also planning to capitalize on the economic growth by announcing the building of an “Academic City” and a new metro station in the capital Yerevan, which are considered projects of national importance, and which will help to boost the existing economic activity.

Conclusion

Armenia's journey towards becoming a leading destination for high-tech and science investment is well underway, supported by economic growth and big-scale projects of national and regional importance. The government's proactive investment friendly approach, combined with the country's inherent strengths, sets the stage for Armenia to play a more significant role in the region and global tech ecosystem.