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Armenia- An Emerging Opportunity

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  • Armenia- An Emerging Opportunity

    ARMENIA- AN EMERGING OPPORTUNITY

    October 30, 2014
    https://www.linkedin.com/today/post/article/20141030182238-80084115-armenia-an-emerging-opportunity?_mSplash=1

    For a British businessman living and currently working in Yerevan,
    Armenia, it has become a prelude to an interesting conversation.

    "Where is Armenia actually?" Sadly one of those who actually asked
    that question was in fact a British International Sales Director. What
    this determines, besides a certain ignorance of Armenia by the British
    business community and general British public, is Armenia's lack of
    marketing towards the UK (and other countries), whether it being for
    business, tourism or general awareness of Armenia's Christian history,
    culture and heritage. To put it politely - what a shame, to be more
    specific it is, to say the least, a missed opportunity that seems
    sadly to be continuing. The land that Noah discovered has indelibly
    become the Shadow lands.

    I believe that the climate and time is now right for business and
    economic opportunity in Armenia. There is potential for closer ties to
    UK businesses that could bring positive benefits to both the economy
    here and the development of overall products and services in the UK.

    Armenia has previously been held back partly due to its recent
    communistic history but also to its political and oligarchy regime
    monopolizing its major industries and limiting economic options.

    However there is now a genuine and committed campaign to affect a
    positive change that is gaining momentum and moving forward by the new
    generation of entrepreneurs, leading creatives, community builders,
    investors, policymakers, developers, young leaders and many others -
    all collaborating toward a more successful Armenia.

    You can now taste the appetite for a change that had seen huge
    amounts of charitable initiatives from Armenia's historic diaspora
    (11 Million Armenian expats live in other countries, USA, Russia,
    France, Syria Australia to name a few) to a move towards sustainable
    investment whereby the mission is to support and ultimately sustain
    Armenia's long term future. To cut to the chase what Armenia lacks in
    natural resources it more than makes up with its intellectual ability-
    its highly educated and innovative population is its greatest asset
    bringing together a mixture of skills, perspectives and resources with
    the result an opportunity for innovation and entrepreneurship to the
    benefit of joint venture partnerships with potential overseas companies
    and Investors. In Yerevan salaries are very low, not far behind China,
    commercial office and residential rents are also comparatively low
    as is understandably the cost of living. The average salary here
    is £280 per month. The opportunity for cost savings on salaries
    and general expenses of Key Executive staff are huge for potential
    overseas companies willing to engage here.

    Key Reasons To Consider Armenia

    Armenia has a history of a high educated population. It is strong in
    professionals trained in Information Technology, medical, engineering
    (architecture, construction) and education. Allied to that the IT
    and Telecom Industry is the most productive industry in the Armenian
    economy. The Government has declared the IT sector as a priority and
    is supporting it through various support institutions, such as IT
    Development and Support Council chaired by PM, Enterprise Incubator
    Foundation backed by the World Bank funding. The industry already
    attracted global brands such as Synopsis, which located considerable
    part of its development functions in Armenia. Most of the foreign
    owned companies are involved in offshore programming, serving foreign
    headquarters. A number of different business models, business plan
    competitions mark the dynamism of the industry. A major boost to the
    sector is expected to come from a $24 million World Bank funded project
    on e-society development and innovation support through "Computers for
    all" program, digital ID cards, venture fund creation and matching
    funds. Armenia for many years has been the economy with the fastest
    GDP rate in the Caucasus region (beside oil rich countries).

    The European Union is Armenia's main trading partner, accounting
    for around 30% of Armenia's total trade. EU imports from Armenia
    chiefly consist of manufactured goods, crude materials, miscellaneous
    manufactured articles, machinery and transport equipment.

    EU exports to Armenia are dominated by machinery and transport
    equipment, miscellaneous manufactured articles, chemicals, and
    foodstuffs.

    The current Partnership and Cooperation Agreement does not include
    tariff preferences, but prohibits quantitative trade restrictions
    and also envisages progressive regulatory approximation of Armenia's
    legislation and procedures to the most important EU and international
    trade related laws and standards, which in turn aims at facilitating
    the access of Armenian products to the EU market.

    Under the EU Generalised Scheme of Preferences, Armenia has been
    benefiting from the special incentive arrangement for sustainable
    development and good governance, the so-called Generalised Scheme
    of Preferences Plus (GSP+), since July 2005. This arrangement offers
    Armenian exports advantageous access to the EU market since it provides
    for a zero duty rate for about 6400 tariff lines.

    The total value of preferential Generalised Scheme of Preferences
    (GSP) imports from Armenia into the EU is steadily increasing, from
    EURO 61 million in 2009 to EURO 109 million in 2011. Armenia's GSP
    utilisation rate is high: around 90%.

    The country has recently signed an agreement to join the newly formed
    Eurasian Economic Union (Market size 171 Million people) including
    Russia, Kazakhstan and Belarus. This faced stiff resistance from
    the opposition parties and younger entrepreunerial commentators
    and business owners, however strong the relationship has been and
    will continue with Russia there is still good economic relations
    with America who also have a strong influence here in Armenia where
    there is a willingness to continue to develop business relationships
    that have been ongoing over the last few years through the various
    aid groups. Also in addition those gained by European Commission
    representation in the country and the policing of their aid to improve
    the various infrastructure, legal, health, agriculture and women's
    rights projects that will continue. Even with the signing of closer
    ties to Russia, Armenia can offer an additional route into Russia's
    and other ex CIS economies that many Foreign companies may want
    to explore given the current climate of sanctions that the western
    governments have ordered.

    Research and DevelopmentOpportunities

    Given this current climate and associated detailed advantages in
    Armenia consideration could be given to the benefits of relocating
    and resourcing certain company functions. None more so than R and D
    centres, comparative advantages would be:

    Availability of highly qualified, technical and innovative workforce.

    Multi language skilled personnel in Armenian, English, Russian
    and French.

    Low cost of living and therefore low salary base. Average salary £280
    per month (UK £2051) Good work/life balance.

    3.1Milion Country population Yerevan 1.1Million.

    Low office, residential, utility, transport and operational costs.

    Emergence of excellent projects and Investment in Education.

    Government priority, IT Incubator, international technical assistance
    programmes.

    Ongoing International company presence and onward future development
    in Armenia of other prespective International blue chip companies in
    the technology industry.

    Potential for developing business in the newly formed EEA Markets.

    This is a brief document describing the potential advantages of
    outsourcing Research and Development centres to Armenia, more detailed
    information can be gained by contacting the below mentioned who will
    be happy to engage in communicating more specific information governing
    the economy and the legal process of setting up business here.

    Jason White

    22 October, 2014.

    According to the Doing Business Report 2014, released by the World Bank
    and the International Financial Corporation, Armenia climbed 3 points
    this year, ranked 37 on the list of 189 countries. Armenia appears
    between Belgium (36) and France (38), but ahead of such countries
    as Cyprus (39), Poland (45), Spain (52), Luxemburg (60) and Italy
    (128). Armenia is also well ahead of its immediate neighbors Turkey,
    Azerbaijan and Iran that are ranked 69, 70 and 152 (Georgia is
    ranked 8).



    From: Emil Lazarian | Ararat NewsPress
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