Economic Overview, 'Silicon Caucasus' Tech Hub & R&D
Armenia has earned a global reputation as the "Silicon Caucasus," home to regional R&D centers for major international tech corporations (Synopsys, NVIDIA, Adobe, Picsart) and a thriving homegrown startup ecosystem.
Key Economic Sectors
- Information Technology & AI: Enterprise software, microchip design, mobile applications, and artificial intelligence.
- High-Tech Manufacturing & Diamond Processing: Precision instruments, pharmaceuticals, and jewelry.
- Financial Services & Agribusiness: Modern commercial banking, organic agriculture, and world-renowned brandy/wine exports.
Employment Contracts, Armenian Labour Code & Probation
Employment practices are regulated by the Labour Code of the Republic of Armenia.
- Mandatory Written Contracts: Contracts must be executed in writing in Armenian (bilingual Armenian/English or Armenian/Russian is standard for international companies).
- Contract Classifications: Indefinite-term contracts are standard; fixed-term contracts are permitted for temporary or project-based roles up to 5 years.
- Probation Period: Maximum statutory probation is 3 months. During probation, either party may terminate with 3 days' written notice without severance liability.
Working Hours, Overtime & Rest Periods
- Standard Hours: 40 hours per week (8 hours/day over 5 days).
- Overtime Surcharges: Minimum 150% (1.5× base wage) for daytime overtime; 200% (double time) for work on weekends, public holidays, or during night hours (22:00–06:00).
Annual Leave, Public Holidays & Maternity Protections
- Annual Paid Vacation: Minimum 20 working days (or 24 calendar days) per year.
- Public Holidays: 12 official public holidays (including Christmas/New Year holidays and Independence Day on 21 September).
- Maternity Leave: 140 calendar days (70 prenatal + 70 postnatal), fully paid via state social security subsidies. Strong job protection applies against dismissal during pregnancy and maternity leave.
- Paternity Leave: 5 working days of paid leave within 30 days of childbirth.
Income Tax (SRC), Funded Pension & Stamp Duty
Taxation and Mandatory Contributions
| Tax / Contribution | Rate / Amount | Payer | Description |
|---|---|---|---|
| Individual Income Tax (PIT) | Flat 20.0% | Employee (withheld) | Remitted monthly to State Revenue Committee (SRC) |
| Mandatory Funded Pension | 5.0% | Employee (withheld) | Individual pension accumulation account |
| Military Insurance Stamp Duty | AMD 1,500–15,000 | Employee (fixed tiered) | Servicemen Insurance Fund contribution |
Termination, Notice Periods & Severance Indemnity
- Objective Cause Dismissal: Requires 14 to 60 days' written notice depending on tenure and reason (or salary payment in lieu).
- Statutory Severance: Equal to 1 month's average salary for redundancy or company liquidation.
- Disciplinary Dismissal: Permitted for severe documented breach following written explanation.
Why Use an Employer of Record (EOR) in Armenia
- Rapid Tech Hiring: Onboard software engineers and data specialists in Yerevan in days.
- Full SRC & Pension Compliance: Automated management of 20% PIT, 5% pension contributions, and Military Stamp duties.
- Zero Local Entity Overhead: Eliminate foreign LLC registration costs, local accounting fees, and corporate tax filings.
Hiring in Armenia? Key Resources
Whether you are evaluating entity setup vs. using an Employer of Record, or looking for the best international payroll solution, our guides give you transparent benchmarks:
