AmCham Monthly Newsletter №12 2021, №1 2022

December 2021/January 2022

AMCHAM BOARD MEMBER MS. IRINA SEYLANYAN Please meet Ms. Irina Seylanyan, who joined AmCham Board as a Director in March 2021.

Ms. Seylanyan is the Chief Executive Officer of HSBC Bank Armenia CJSC. She has been working with HSBC since 1997 and has held various managerial positions at HSBC Armenia and other HSBC Group member companies. Ms. Seylanyan was appointed to the current position and returned to Armenia in March 2020 after working for HSBC in the UK and Malta for 7 years. She is a highly motivated senior leader with strong analytical, financial and risk management background along with front-line business development and entity management experience. She is passionate about developing, motivating and inspiring people.

Ms. Seylanyan is a Board Member on several non-profit organizations’ Boards and is the Chairperson of the Insurance Foundation for Servicemen Board.

Ms. Seylanyan is graduated from the Armenian State Engineering University and is an IT engineer. She has also completed the full course of studies at the Association of Chartered Certified Accountants (ACCA) and is an ACCA fellow.

She enjoys spending time with her family and friends, traveling and reading.

“To be successful you need to believe in yourself, not be afraid of taking risks, continuously work on personal development, be genuine and value what you have.”

BE MY GUEST WITH FORA PREMIUM On 2 December 2021, in the framework of the AmCham Be My Guest networking series, AmCham Members were invited to enjoy their Thursday evening with FORA Premium, AmCham Member company.

Fora Premium LLC is the official representative of Jaguar & Land Rover brands in Armenia since 2016 and is part of the Autogroup group of companies, which represents worldwide well-known brands such as Renault, Nissan, Jaguar, Land Rover, Lada, Ford, and SIXT RENT-A-CAR. Autogroup is one of the largest enterprises in the country dealing with imports, sales, and aftersales service of cars, commercial and special vehicles, as well as construction and agricultural equipment.

During the event Mr. Ashot Hovanesian, President, AmCham Armenia and Mr. Ashot Shakhmuradyan, General Manager welcomed the guests, after which FORA Premium organized an interesting tour and an informative presentation on the salon cars performance and other characteristics and invited to register for a test-drive. The Participants were able to see the newest collection of Jaguar and Land Rover cars, as well as the Renault collection.

AmCham Members: Synergy International Systems, Siemens Industries Software, McCann Yerevan, Picasso, TK & Partners, SOS Children's Villages Armenia, Regional Post - Caucasus, Gazelle Finance Armenia, HSBC Armenia, Assets CJSC, Globalink and others had a great networking opportunity and enjoyed the evening in a wonderful atmosphere with delicious snacks and beverages.

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MEETING WITH THE MINISTER AND THE DEPUTY MINISTERS OF FINANCE On 3 December 2021 AmCham organized a meeting with AmCham TCuFP Committee Working Group (WG) and an open meeting for AmCham Members with Mr. Tigran Khachatryan, Minister of Finance of the Republic of Armenia, Mr. Arman Poghosyan, and Mr. Avag Avanesyan, the Deputy Ministers, as well as Mr. Ori Alaverdyan, Head of Revenue Policy and Administration Methodology Department, and Mr. Arthur Aleksanyan from the same department of the Ministry of Finance at Armenia Marriott Hotel Yerevan.

The topic of the meeting was the Tax Privileges Special Package prepared by the Repatriation, Integration, and Immigration Working Group with the aim of promoting the repatriation of Armenian Diaspora to Armenia. During the meeting Mr. Ashot Hovanesian, President, AmCham Armenia, and Mr. Gagik Gyulbudaghyan, Vice-President, AmCham Armenia, welcomed the guests from the Ministry of Finance and introduced to project proposal.

The Ministry of Finance Leadership Team led by Mr. Tigran Khachatryan very much welcomed the above initiative and expressed their willingness to give all the support to bring the initiative to life given the great expert team gathered around such a vitally important idea for Armenia. It was agreed that Mr. Arman Poghosyan and Mr. Ori Alaverdyan will be joining the AmCham Working group for regular meetings and follow-up on the above initiative.

During the meeting, it was agreed to form an extended working group with the government representatives for preparing a technical document to be presented to the National Assembly Economic Standing Committee as a next step.

It was also agreed to revert back to the Ministry of Health initiated comprehensive health insurance introduction proposal with a more specialized team of AmCham Members and Government representatives.

After the discussion, an open meeting with AmCham members was held at Armenia Marriott Hotel Yerevan, where the Deputy Ministers presented the public financial management and procurement policy of the Economic program of the Government of the Republic of Armenia, which was followed by a Q&A session. At the end of the event, Mr. Khachatryan made a closing remark to the participants and expressed a willingness for a continuous cooperation with AmCham Members.

WORKFORCE DEVELOPMENT COMMITTEE ETD WORKING GROUP SERIAL MEETING On 6 December 2021, AmCham in Armenia had a Workforce Development Committee Education, Training and Development (ETD) Working group serial meeting at The Alexander, A Luxury Collection Hotel, Yerevan.

The Chair of the Meeting welcomed the participants and approved the Agenda. There was a detailed discussion on the Objectives and the next steps of the Working group. It was decided to use all the available resources to identify the gaps in education and workforce development.

The details of the discussion were as below: • The problem is the gap between the industry and the workforce and the possible solution is to replicate the paid Internship model of the high tech in the rest of the sectors.

• The AUA model of the Internships also could be taken as a model. AUA works with the employers to identify what are the required needs to match them with the students for a potential hire and potential further careers development opportunities.

• Universities’ concern on students getting employed - the majority of the universities other than AUA, have an expectation that the employers should be engaging with possible employees of the future in the early stages, however, they do not have a Career Center with full capacity to connect the students to the potential employers, so those center should be focused to develop.

• Internship structured announcements should be on the relevant Platforms, similar to the job announcements.

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WORKFORCE DEVELOPMENT COMMITTEE ETD WORKING GROUP SERIAL MEETING •

Define sources of relevant soft and hard skills training done by companies for business that the future students will be interested in for possible employment opportunities.

• It should be checked if the Ministry of High-Tech can assist the ETD WG advocate for other ministries to have a similar practice?

• The key stakeholders for communicating for possible training or internship solutions are the Ministry of Economy National Center of Innovation and Entrepreneurship, in Agriculture, engaged the Deputy Minister Vardan Khojoyan, Ministry of Education • The scope of the Working Group should also focus on helping people from abroad, especially migrants with a focus on the young professionals to find jobs?

As a next step, it was decided to prepare a rough draft white paper by Dagen on the Actions, based on the available resources to present during the Next WG Meeting in January 2022.

TCUFP EXTENDED WORKING GROUP DISCUSSION On 9 December 2021, the American Chamber of Commerce in Armenia (AmCham) organized a TCuFP extended Working group Discussion on “The special package on tax incentives to promote repatriation/immigration of the Armenian Diaspora to Armenia and to support the integration process”, in Armenia Marriott Hotel Yerevan.

Ori Alaverdyan, Ministry of Finance rep, Aharon Chilingaryan, Tigran Jrbashyan, Irina Dumanyan, Gagik Gyulbudaghyan, Nerses Nersisyan, Karen Zakaryan and the AmCham Executive Team were present during the meeting.

Gagik Gyulbudaghyan welcomed everyone and introduced to the proposed Special package and stressed the importance of making the document to be in compliance with the international agreements that Armenia has signed.

The participants discussed the problem of being a double tax resident of 2 countries and brought Israel’s agreement with the USA as an example of what we should strive for. It was suggested to investigate the agreement and see how we can apply it to Armenia’s situation.

The following key points were discussed: - Decrease the burden of double taxation of passive income (in stocks).

- Focus on our internal legislative laws without touching residency issues and negotiate with some countries in order to have an agreement like the one Israel has with the USA (suggested by Aharon Chilingaryan).

- Deposited money from abroad that repats invest in the banks of Armenia should reduce the amount of the income tax paid.

- The repats, who become residents of Armenia and have the passport should not be taxed on their income from abroad. So they would have a tax privilege.

- The law on domiciliation, that we have for 7 years, should be implemented, so that a person from, for instance, Lebanon could bring his business and shares without having trouble related to custom duty.

- To identify the list of professionals needed in Armenia and offer companies a 50% subsidy on income tax of the salary, if it exceeds 2 million AMD provided that the professionals come from abroad.

As a next step it was decided that based on the discussion points, to revise the document and have the final draft for the meeting with the High Commissioner of Diaspora Head.

2,104 People reached

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TCUFP COMMITTEE WORKING GROUP MEETING WITH MR. ZAREH SINANYAN

On 14 December 2021, the AmCham Tax Customs and Fiscal Policy(TCuFP) Committee Working Group had a meeting with Mr. Zareh Sinanyan, The High Commissioner on Diaspora Affairs and his team: Mr. Hovhannes Aleksanyan and Ms. Margarita Baghdasaryan and presented the AmCham Proposal on The Special Package on Tax Incentives to Promote Repatriation/Immigration of the Armenian Diaspora to Armenia and to Support the Integration Process.

During the meeting, in addition to the document the following focus points were discussed: ● In addition to the Tax amendments there should be a strong Diaspora Related Policy, Strategy which will be based on evidence – in-depth research ● The Term who is Armenian should be clarified and fixed ● A Ministry of Diaspora and Integration is recommended to be formed to have a strong structure on the ground ● There should be a clear difference, whether an Armenian or a foreign nationality person is immigrating to Armenia ● Integration Centers should be established so the immigrants have a one Stop Service and no dealing with the Police and other Officials ● The current legal regulation that the Pensions are not being taxed should be publicized.

To the AmCham Team’s great excitement, Mr. Sinanyan very much appreciated the work done and expressed his readiness to conceptually lead the initiative and bring the proposal objectives stated in the attached document into action.

SOE AND LABOR WORKING GROUP MEETING On 15 December 2021, AmCham in Armenia had a Strategy and Organizational Excellence (SOE) and Labor Working Group meeting at Armenia Marriott Hotel Yerevan.

The Chair of the Meeting welcomed the participants. There was a detailed discussion on the issues that the working groups should focus on as the below Agenda Items: +7 1. Identification of main exact topics which are “problematic” for the companies the Working Groups should focus on.

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Roles and responsibilities distribution – who will work on each of the topics.

1,749 3.

Timeline for recommendation presentations.

People reached 216 It was decided to focus on a few points that appear to be the main problems within the frame of the Working Groups.

Engagements The key details of the discussion were as below: ● The topic of internships was stressed mainly for companies to start providing more structured and systematic internships, Boost with credit whether paid or not paid. ● Have the internships not limited to certain fields or areas, to not work in small units but run it organizational-wide. ● Companies should have a legal framework when it concerns internships, to avoid any accusations or issues and as need be 1717 legislative changes should be done.

3 Shares Like ● Another issue was the hiring of foreign employees in Armenia and giving them work permits. There are certain limitations Comment that arise problems for them finding jobs in Armenia.

Share ● Paid vacations should be considered for the foreign workforce. ● Additionally, consider the payment options for that paid vacation and the deadline of the payment. This topic will be later discussed individually.

SOE AND LABOR WORKING GROUP MEETING The main Issues of the working groups are the following: ● Internship Formalization ● Internship guidelines, with regards to students ● Student Loans ● Workforce Opportunities for foreigners ● Vacation calculation and payments ● Vacation payment options for the employees.

A list was provided to help with the strategizing process of companies to become better.

Next Steps: Based on the WFD Committee’s overall objectives and the available research resources the key objectives of Labor and SOE WGs will be developed to be presented to the Team during the 1st meeting in 2022.

TCUFP AND LEGAL COMMITTEE JOINT MEETING On 12 January 2022, AmCham in Armenia held a special Tax, Customs, and Fiscal Policy (TCuFP) and Legal Committee joint meeting at Armenia Marriott Hotel, Yerevan. Mr. Ashot Hovanesian, AmCham President; Mr. Gagik Gyulbudaghyan, AmCham 2nd Vice-President; Ms. Irina Dumanyan (online) and Mr. Tigran Jrbashyan from AmCham Board of Directors, 9 members, 6 of them online and AmCham Executive Team participated at the meeting. Mr. Levon Altunyan, a special guest was also present online at the discussion. The meeting was chaired by Ms. Lusine Mnatsakanyan.

Karine Sarkissian welcomed the participants, thanked them for their interest in the topic and it was suggested focusing on the burning issue of the Comprehensive Health Insurance draft law discussion as a priority.

Ms. Lusine Mnatsakanyan presented AmCham TCuFP and Legal Committee's position regarding the Comprehensive Health Insurance draft law and the participants mentioned a couple of concerns on the topic Next steps: ● To create a small Working Group with Ms. Lusine Mnatsakanyan, Mr. Tigran Jrbashyan, Mr. Levon Altunyan, Mr. Nerses Nersisyan and Mr. Suren Ghalumyan to work on the draft law, ● To prepare a short position paper about the topic and discuss it with the Ministry of Finance ● To organize a joint meeting with other AmCham partner business associations and NGOs to discuss and create a joint single proposal with objections and suggestions about the law and present it to the Ministry of Health of the Republic of Armenia. ● To obtain the relevant policy recommendations from the World Bank.

Mr. Gagik Gyulbudaghyan, briefly presented the recent update about the Tax Proposal Special Package that was prepared by the group to promote the return of the Armenian Diaspora to its homeland. Mr. Gyulbudaghyan reminded the participants about the meeting with Mr. Hakob Arshakyan, the Vice-President of the National Assembly of RA, who suggested preparing a recommendation paper where the definite objective of the Tax Proposal Special Package and a key result area of the project will be stated clearly.

Next steps: ● It was decided to organize a meeting with Mr. Zareh Sinanyan, the High Commissioner of Diaspora Affairs of the RA to prepare the recommendation paper with his advice. ● To organize a meeting with Mr. Hakob Arshakyan as soon as the paper with objectives and expected outcomes is ready. ● To change the “bank deposit” advantage in Tax Proposal Special Package to the “deposit in financial tools” ● To have the next meeting as upon a group decision.

AMCHAM NEW YEAR PARTY

Sharing the atmosphere and fun AmCham Members and Partners had at C.View, at AmCham New Year Party. AmCham wishes you all the best of good fortune, prosperity, success, and health in the upcoming year!

We are filled with appreciation towards Supporters/Partners of the AmCham New Year Party: Coca-Cola HBC, Armenia Marriott Hotel Yerevan, Marriott Tsaghkadzor Hotel, Armenia Wine Company, C.View, Selfie Mirror Yerevan.

Special thanks for the continuous support and cooperation!

Our sincere gratitude to our Members and Partners who were with us in this joyous celebration, greeting 2022 with smiles and hopes...

DID YOU KNOW?

Eduardo Eurnekian Eduardo Eurnekian was born on 4 December 1932. He is an Argentine Armenian billionaire and is the fifth richest person in Argentina. He has been awarded as the “Business Man of the year” in 1995. In 1999 he received the "Leonardo Award", given to the foreign businessman of the year in Italy. In December 2020, he was appointed as Honorary Officer of the Order of the British Empire (OBE), for services to UK/Argentina relations.

Eduardo Eurnekian started off his career in the textiles industry, and then tried his luck in the business of cable TV during the 1980s. By the end of 1980s, he became the owner of a number of radio stations, a TV channel and some newspapers. Eurnekian has built an almost $1 billion media empire since the early 1990s and is now the majority owner of a consortium operating 76 airports worldwide, mostly across Argentina and elsewhere in South America as well as in Armenia. Eduardo Eurnekian has also been trying to enter into Argentina’s gas and oil industry, where he is involved in production, transportation and exploration.

In the year 2011, he sold more than 20 duty-free shops of Argentina, Uruguay, Armenia, Ecuador and Martinique worth $957 million to Dufry AG in Switzerland.

Eduardo Eurnekian received the highest awards in Armenia for his activities. On 17 December 2001, Eurnekian's corporation signed a 30-year concession agreement with the Armenian Government for the management of operations of Zvartnots International Airport, which is Armenia's largest airport. The total cost of the project was more than 50 ml dollars. Eurnekian also invested in Armenia's agribusiness sector as he set up a joint venture – the Tierras de Armenia or KARAS WINES, in the southern Armavir region and invested into fruit orchards and a fruit processing plant, worth US$25 ml.

FMCG COMMITTEE SWM WORKING GROUP MEETING On 18 January 2022, AmCham FMCG Committee Sustainable Waste Management (SWM) Working Group had an online meeting with Mr. Kyriakos Parpounas, Parpounas Sustainability Consultants (PSC) on the work that has been done so far within the framework of Armenian Waste Management Assessment. Mr. Kyriakos Parpounas and Ms. Anastasia Ellina from PSC were conducting the presentation for the meeting. Mr. Dainius Kazlauskas and Mr. Evaldas Galvanauskas, the representatives from the Embassy of Lithuania; Ms. Elina Markaryan, the Chair of the Committee; Mr. Harutyun Alpetyan from AUA and AmCham Executive Team were present at the meeting. One of the main issues discussed was that Armenia does not have the legislation, compliance schemes, public participation, and enforcement to support the EPR model. As a result of the study, Mr. Kyriakos presented the EU legal framework and model suggesting having an EPR model in Armenia.

The PSC gave an estimate of the costs of the different material types and how much it would cost to recycle them. Mr. Parpounas showed the estimated statistics on the waste project object model per material type.

GOLD MEMBER – ANDAVA

Andava Digital Marketing Agency founded in 2009 is one of the leading digital marketing agencies in Armenia that specializes in everything modern businesses need for a successful and profitable online presence: users flow, new customers and advanced search engine and social media visibility.

Andava’s cross-functional teams are in place to support the businesses at every stage of their journey. Be that a beautiful website design and development, a long-term SEO strategy, a powerful PPC campaign or meaningful conversations with prospects through social media, they have got you covered.

We Listen We know that we can’t deliver unless we listen. Forget one-size-fits-all solutions; we take the time to understand what you need.

Transparency We’re on this journey with you. That’s why we’re in constant communication: the highs, the lows, and the steps we’re taking next.

Scalability With teams of digital marketing experts at the ready, we can scale up to deliver the solutions you need, when you need them.

Dedication Passion drives everything they do. They approach every campaign with the same dedication as it would be expected from an in-house team.

Strategy They don’t think short-term. Instead, they create sustainable digital marketing strategies in line with business goals and objectives.

Technology and Training Technology moves quickly, but our teams are on it. We’re constantly in training mode to stay up to speed with the latest thinking.

• Web Design & Development • Search Engine Marketing (SEO) • Pay Per Click (PPC) Advertising Campaigns • Social Media Marketing • Email Marketing • Amazon Marketing • Local Business Marketing Andava provides the businesses with the following services: What makes Andava’s services unique?

SILVER MEMBER – SHTIGEN

As the pioneer of the Renewable energy sector in Armenia, Shtigen has passed a complicated path from the startup to the market shaper. Shtigen adopted a mission to introduce affordable solar energy solutions to Armenian families, businesses and public sector, by promoting green technologies and strengthening energy self-sufficiency of the nation. Starting from the promotion and installation of household solar water heaters in 2011, ten years later Shtigen is the proud installer of more than 40MWp of rooftop and ground based photovoltaic systems and nearly 35 MW solar thermal stations for both residential and commercial use.

In addition to our solar energy traditional field, Shtigen invests also in a vast variety of newly developing fields. Now Shtigen is a group of companies including business entities engaged in electric cars, EV fast charging infrastructure, energy efficient heating and cooling systems and electricity retail markets. Shtigen has already developed and implemented several CSR projects like Shtigen Kids, a full educational course for 10-14-year-old children. Everything Shtigen is involved in is about rising efficiency and economic growth first of all in Armenia, after in the region.

Prices for electricity and gas grow constantly, while modern technologies allow using free and safe solar energy for our buildings and cars. Shtigen believes in green and renewable future for Armenia and the whole world. Hence the company is here to make these technologies work for households, businesses and public sector and give our customers independence from constant rises in energy prices.

Shtigen’s decision to join AmCham is based on the ambition to make Armenia and the whole world a better place to live for the present and future generations. To achieve this goal, the company needs a group of wise supporters who have the same mission.

SILVER MEMBER – REDBRIDGE

Redbridge is a boutique firm focused on legal and business advisory services in: •

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Banking and Finance Business Consulting Litigation & International Arbitration Crisis Leadership Entertainment & Gaming Foreign Direct Investment (FDI) High-Net-Worth Individuals (HNWI) Intellectual Property & Trademark

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Lobbying & Public-Private Partnership (PPP) Real Estate Construction & Management Technology Transactions FinTech Blockchain & Digital Currencies Forex E-payments

Redbridge is very smart, aggressive and relentless in achieving the very best results for its partners and it is a bridge for not only flagging the issues but coming up with solutions as the firm has an exceptional amount of knowledge and expertise in different sectors.

That’s why Redbridge is a trusted adviser to the world’s top companies and it provides services to the US and other National Players and does its best to bring the clients to the world of creative business advisory services and power of law.

SILVER MEMBER – PANO

Pano LLC was established in September, 2013. It is engaged in production of bread, bakery and pastry. In this field our company has a leading role both in HoReCa segment and in B2B sales.

In 2019, our company received the National Trust Award as the «Brand of the Year» in Rich Assortment and Quality Over Price nomination.

One can see Pano’s products in almost every supermarket, small and big food markets and restaurants in Armenia. Baking bread is a godly work, and with God’s help our company moves forward and prospers.

During the 8 years of Pano’s activity, the company’s turnover, as well as the number of our customers and partners in this field has been increasing year by year.

Pano combines high quality and good taste in its products. Satisfied customers are the priority for the company, so Pano spares no effort to get better to satisfy and gain the customers’ trust.

BRONZE MEMBER – GIGGLES EDUTAINMENT

Edutainment is an educational entertainment center for children from 3 to 6 years of age.

At Giggles, You can enjoy the convenience of various clubs, like gardening, recycling, yoga, science, arts & crafts, music, and much more, in one bright and secure location.

As most of the human development generally happens before 6 years of age, it is crucial to imprint love and curiosity towards learning in children before they actually start attending school.

At Giggles – education is all about play!

We encourage our students to learn through hands-on approach that allows using their natural inquisitive and curious side in discovering the world. Moreover, motivating the children to discover and ask questions helps to set a pattern towards learning and being interested in education throughout their entire lives.

Edutainment at Giggles can serve as a substitute to a traditional pre-school education or simply be a fun place where new discoveries and friendships are made. As such, we have different visiting options for Your children – annual, monthly, or single-visit basis. In either case, the expected outcomes are the same: • New breathtaking experiences • Mental and physical development • New discoveries, memories, and friendships • Fun, Fun, Fun! And of course, • Yummy-yummy food in our tummies!

PHOTO ROOM Besides the fun educational program at Giggles, our Photo Room offers You and Your little ones unforgettable moments derived from exciting monthly themes.

Photoshoot never gets boring at Giggles, as our inspiring and motivational staff is here to guide Your kids through a fun experience of modeling and enjoying the process of capturing the moments

BENEFIT FROM SCHNEIDER GROUP ARMENIA

SCHNEIDER GROUP well known for accounting outsourcing services, tax consulting and legal advice.

However today we would like to present you two very special solutions that we offer in our Armenian Office in Yerevan: Interim Management and Employer of record service.

Interim Management Interim Management is a service of provision of skilled interim manager, to serve as a General Director of your legal entity in Armenia. This could be required for a start-up period, when you haven’t found a suitable candidate or when a full-time employee is not financially justified, or you want you employee to focus on business development goals rather than handle multiple administrative tasks associated with the General Director role.

Other typical situations when such temporary interim manager is required can be re-organization of the company, force majeure or crisis with closed borders or significant changes within your company. Interim Management provides temporary, limited management resources and skills by assigning a proven interim manager to manage a period of start-up, transition, crisis, or change within an organization. SCHNEIDER GROUP provides Interim General Director Services for your subsidiary in Armenia for short or long-term periods.

Employer of Record With an increasing need of IT experts to set up and maintain digital solutions in the Covid environment, our Employer of record services can help you to tap a large talent pool without the necessity of setting up a local company amid uncertain economic circumstances. Direct employment contract between a citizen of Armenia and a foreign legal entity is often very complicated, as it brings tax obligations for an Armenian citizen.

SCHNEIDER GROUP may act as an official employer for your candidate, ensure that all tax obligations are met and social security contributions are paid and all necessary paperwork is completed. Employer of record service is a good way to test the market without significant investment: you don’t need to invest into legal entity registration and office setup, however you have a full-time employee working for you in the Armenian market.

If you have already identified a suitable candidate, we'll arrange every aspect of the hiring process. If you are still looking for the right person, we will find, examine and pre-select professionally qualified and experienced applicants. Our recruitment team specializes in finding the right person, with a particular focus on IT market.

Video-link https://www.youtube.com/watch?v=HIBNT02KVQY&t=1s For more information, please visit https://schneider-group.com/

AMERICAN CHAMBER OF COMMERCE PO IN ARMENIA Strategic Vision and Priorities AmCham has identified Key Priorities for advancing the vision of Armenia for a better business environment and will be focusing on the following basic levels: 1. POLICY & LEGAL 2. OPERATIONAL - SHORT TERM IMPROVEMENTS

1. POLICY & LEGAL Economic Policies need to be aligned with the general economic development strategy (yet, to be prepared) and the main and fundamental changes in Tax Legislation should follow and support the implementation of this strategy.

General Economy Development Strategy should be prepared for the following period: • Emergency Plan (for up to 1.5 – 2 years) • Mid-Term economy development plan (for up to 5 – 7 years) • Long-Term economic development strategy (for up to 30 years).

General Strategy Paper should be the consolidation of different sectors’ development strategies. Specific action plans (road maps) should be prepared both for sector players and regulators/government.

Economic Development Strategy Paper should be developed to focus on the priority sectors such as agriculture, ICT, industry, etc., as well as on the operational areas such as industrial policy, taxation, investment, export, etc., and be predictable, data-driven, and result-oriented with Key Performance Indicators which cascades down through the Government all levels with a common vision.

International experience shows that the existence of relatively large alternative tax systems results in the ineffectiveness of tax evasion and tax administration. The companies should operate under the same legislation conditions and follow all tax rules.

There is a need to conceptually reinterpret the general tax policy: taxation for producers (profit tax, income tax) vs. taxation for consumers (VAT, excise tax). We need to have a tax policy, which will support producers (especially export-oriented producers), thus, reducing taxes for production and increasing taxes for consumption (e.g., land tax, property tax).

Legislative changes/reforms should be implemented to facilitate a smooth operation in the following areas: ✓ Labor Code - as it is out of date and does not reflect the current reality of rapid changes such as Internship, Disability, Child Birth Encouragement, Expats employment, etc. ✓ Customs Administration - Authorized Trade Operators system application, to facilitate the post-customs operations. ✓ Justice Sector Reforms - with the focus on arbitration and IPR, as well as anti-corruption reforms. E-draft operational effectiveness should be considered.

✓ mandatory platform system establishment with the Government and the National Assembly for effective lobbying. ✓ Fair Tax Privilege System - Fundamental changes in tax legislation should not be made without public consent. Tax privileges need to be given not to the individual companies but the sectors as per the priority areas. The Tax reforms should be implemented in phases and a timing gap should be given for implementation. ✓ Family Income Declarations Scheme - should be introduced to be applied: instead of individual declarations, it should be differentiated by the type of income, i.e. by business owners, high-salary, middle income, low income, etc. Tax

AMERICAN CHAMBER OF COMMERCE PO IN ARMENIA OPERATIONAL IMPROVEMENTS The following should be the main focus areas in Operational Improvements: ✓ State Exclusion from the Business Sector/Services Monopolization – State should not become a monopolist in the account of the private sector as the state cannot be as effective as the private sector and it is hard to track the performance of the state-owned sectors․ Competition Protection Commission should be able to track the state companies’ share so they do not monopolize and abuse their dominance and avoid of possible corruption risks. ✓ Regulatory Impact Assessment - to do data-driven policymaking. When a tax item changes, it must be explained why it changes and what is the impact on the government budget as well as the expected impact on the businesses, economy, and society, as well as being predictable. ✓ Private-Public Dialogue mandatory platform system establishment with the Government and the National Assembly for effective lobbying. ✓ Fair Tax Privilege System - Fundamental changes in tax legislation should not be made without public consent. Tax privileges need to be given not to the individual companies but the sectors as per the priority areas. The Tax reforms should be implemented in phases and a timing gap should be given for implementation. ✓ Family Income Declarations Scheme - should be introduced to be applied: instead of individual declarations, it should be differentiated by the type of income, i.e. by business owners, high-salary, middle income, low income, etc. Tax deductions should be applied for healthcare, education, vulnerability, etc. ✓ State Procurement - should be transparent, simplified, and digitalized, which has an actual working system.