How much can Yerevan expand in terms of the volume of high-tech and creative industries, information technologies and startups? While many IT professionals are moving to Armenia to find a peaceful place to work and a comfortable ecosystem for business growth, Armenia faces new challenges and the processes are developed very fast.
Yerevan IT Sector Opportunities and Infrastructures ․ What is the volume of IT in Yerevan?
Since February Large numbers of people have moved from Russia, Ukraine, and Belarus to Armenia, Yerevan city. The term “relocation” has become familiar to us. The turmoil of the first days is long gone, but the process continues, it takes deeper roots, affecting Armenia’s economic activity. Most of the relocated people are from the IT sector. So what makes Yerevan attractive? And how many people are moving to Armenia?
To find out, let’s start from the beginning, what image do we have in the Armenian tech ecosystem and finally how much can Yerevan expand?
Armenia’s IT infrastructure growth
In independent Armenia, the IT sector gained momentum again in the late 1990s, and most companies were founded in the 2000s. Initially, most of the products were made with the Outsourcing model․ In 2008-2009 the Outsourcing index decreased, giving way to Product Development.
In 2000 On December 28, the Government of the Republic of Armenia recognized the information technology industry as a priority sector of economic development.
Last year there was a 17.8% real increase in output in the field of information technologies, which is more than 3 times higher than the total economic activity of the year. This is mentioned in the 2021 report of the Republic of Armenia Government.
According to the report, within the framework of the 17th measure to neutralize the economic consequences of the coronavirus, in 2021, newly established technology companies were provided with state assistance in the form of grants of about 1 billion drams. In addition, about 429 million AMD grants were provided to 40 startups at different stages of product development within the framework of the 3 components of the “From Idea to Business” grant program.
2021 was full of offline and online events, meetups, new educational programs, active investments, and more. It can be considered a year of investments in Armenian IT. Many startups with Armenian founders and offices here have announced venture investments. For example Krisp, SoloLearn, SuperAnnotate, 10Web, Podcastle, FoodStruck, Cognize, etc. There are also many Armenian startups that are still growing and great developments await them in the future.
Also, PicsArt became a Unicorn. This is the first company established in Armenia, the value of which exceeds $ 1 billion. There are many companies that have not announced the closing of investment rounds.
It is important to mention the activity of Armenian Venture Capitals. We can see an exceptional cycle emphasized. Product-creating founders can detect problems, develop a solution, target the global market, have light traction and be able to attract $ 200,000 – $ 500,000 investment right from Armenian investors.
Competitive advantages of Armenia
Armenia has competitive advantages over other countries in the region in this field:
- The ability to carry out research and experimental work in accordance with international standards;
- High quality and talented specialists,
- Basic university programs in IT and other related specialties, and cheap labor force with a high level of competition and also low operating costs,
- Tangible state support to the sector and willingness to improve the investment field,
- Progressive development of the IT sector,
- Strong Diaspora in Europe and North America;
- Extensive experience in cooperation with large transnational companies,
- A legal framework that meets the best international standards for the protection of intellectual property.
The above-mentioned advantages have become the basis for relocation to Armenia. The flow of Russian citizens to Armenia started on February 24, 2022.
Moving to Armenia 2022
According to Novaya Gazeta, there are between 50,000 and 100,000 Russian citizens in Armenia. The Tourism Committee and the Ministry of Economy of the Republic of Armenia are only “processing information related to the increasing flow of Russians” to the country, so there is no official data yet. But on March 7, Vahe Hakobyan, chairman of the Armenian National Council’s commission on economic issues, said that 6,000 citizens from Russia and Ukraine come to the country every day.
Over the past couple of months, 30,000 accounts opened in Armenian banks for non-residents, according to the Internet Without Borders platform.
According to the State Register of Legal Entities Agency of the Ministry of Justice, from February 24 to March 22, 2022 938 citizens of the Russian Federation were registered as Private Entrepreneurs in Armenia. During the same period, 268 LLCs were registered in Armenia, in which there is a legal entity or an individual, a Russian citizen.
Most of them represent the field of information technologies and the high-tech industry. Most of the people coming to Armenia from Russia and CIS countries are freelancers, whose foreign clients either no longer want to work with legal entities registered in Russia, or they can’t work with them because of logistical issues. That is why they are now trying to change their registration and introduce themselves as residents of Armenia. Another practical problem is the difficulty of using payment cards and services, which is something like being cut off from the world, especially for IT professionals.
Advantages of relocation to Armenia
There are many advantages in Yerevan that relocated people mention: from pleasant sunny weather to nice locals.
First, Russian citizens can come to Armenia with internal passports.
In terms of legislation, Armenia is very convenient for them. Within the Eurasian Economic Union (EEU), employees do not need a work permit. The legislation is quite similar to the Russian legislation, which also eases such processes. The cost of living in Armenia is relatively low. Tax privileges are given to the IT sector, but on the other hand, the problem is that those privileges are defined until the end of 2022 and there are no clear signs yet of what will happen next.
Mentioning advantages, we should not forget the gaps and difficulties they face. For example, Լack of infrastructure, insufficient number of the business centers, or the availability of apartments, their quality, etc. Despite the prospects for the development of small businesses, the hype around moving to Armenia has its drawbacks for local residents. A sharp influx of Russian emigrants will affect the rise in prices for essential goods, there is already a hype around the real estate market, and visitors are looking for affordable housing.
The main questions are how to register a company in Armenia, how to register as a private entrepreneur, how to get a residence permit, whether you need a work permit, how these processes are carried out, and tax-related questions are often asked.
To answer these questions there is a useful platform called “Move To Armenia”, where it is possible to find the best place to live in Armenia, jobs, housing, education and more.
Here is some useful moving information to Armenia:
- Telegram channel “Relocation Armenia”.
- FAQ on relocation to Armenia.
- Information about relocation from the Ministry of Economy of Armenia.
- Information on obtaining citizenship from the Ministry of Foreign Affairs of Armenia.
Telegram channels about relocation to Armenia:
- 2022 Relocation / Armenia.
- Relocation to Armenia | Mutual assistance.
- Relogame Armenia is a chat of GameDev industry employees.
- IT vacancies in Armenia.
- Jobs in Armenia
- Opening a legal entity in Armenia.
Predictions vary as to how long the number of IT representatives visiting Armenia will increase, but experts note that the IT sector in Armenia has already received a big boost.
In conclusion, it should be noted that Yerevan, being a small city, is quite hospitable and ready to accept, help, integrate and develop new people. Economic activity and the influx of new talent play an important role, and newcomers bring with them their culture, both work and lifestyle.