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Hidden gems: Hiring remote workers in Armenia

May 29, 2024

A former Soviet republic located in the Caucasus region, Armenia shares a border with Turkey to its west, Georgia to its north, Azerbaijan to the east, and Iran to the south. Armenia has beautiful, diverse landscapes, including mountains, forests, and rivers. Lake Sevan is one of the largest high-altitude freshwater lakes in the world, and the capital city, Yerevan, has a history that dates back to the 8th century BCE.

In addition to its rich history, Armenia is considered one of the region’s fastest-growing technology and innovation hubs. With government support for a thriving IT sector and numerous tech startups, the country is sometimes called the “Silicon Valley of the Caucasus.”

For companies seeking remote workers, particularly for IT roles, Armenia is an appealing option due to its pool of skilled workers and low cost of doing business. The country is also a draw for digital nomads who want to live and pursue remote work in an area with natural beauty, abundant coworking spaces, and an affordable cost of living.

Advantages of Hiring in Armenia

Armenia is experiencing a tech boom. Thanks to the government’s efforts to develop this sector, it’s currently the number one country for tech in the Caucasus region and 57th overall. When you factor in both lower salaries and the lower cost of living, it’s easy to see Armenia’s potential for companies expanding internationally.

Before diving into the specifics, here is some background information about Armenia:

  • Language spoken: Armenian
  • Currency: Armenian Dram (AMD)
  • Capital: Yerevan
  • Population: 3.2 million

Competitive operating costs

Armenia’s average monthly salary is around USD 200. This allows companies to access top-tier talent for considerably less than it would cost to hire employees in America or most European countries.

Highly Skilled Employees

The Armenian government is investing heavily in its citizens to help ensure Armenians have the skills to compete globally. This includes providing free education for primary and secondary schools and actively promoting STEM (Science, Technology, Engineering, and Mathematics) education. The result is a literacy rate of over 99%, with more than 60% of adults having completed at least secondary education.

Another education initiative is the State Programme for the Development of Education in the Republic of Armenia, which focuses on high-quality vocational education and training, a commitment to lifelong learning, and opportunities for upskilling and reskilling.

Innovation Hubs

In recent years, there has been a push to help create innovation to drive the Armenian tech industry forward. This has resulted in significant projects like the TUMO Center for Creative Technologies, a joint project with the European Union. TUMO is a free educational and learning program for teens made up of self-learning activities, workshops, and project labs in 14 learning targets. These include:

  • Game development
  • Graphic design
  • 3D modeling
  • Programming
  • Web development
  • Robotics

There are currently four TUMO hubs in Armenia, plus 19 smaller TUBO boxes serving smaller communities.

Another organization that fosters STEM development in Armenia is the Foundation for Armenian Science and Technology (FAST). FAST’s goals include:

  • Promoting STEM education
  • Establishing a favorable regime for an innovative environment
  • Actively developing a venture capital ecosystem

The result of these investments is a highly educated workforce with experience in tech and other STEM fields, such as data science, engineering, and software development — raising Armenia’s reputation on the global stage as a hotspot for technology hubs. The Armenian government is also investing in boosting internet connectivity and WiFi speeds to make it easy for businesses to collaborate remotely with partners worldwide.

Geographic and Cultural Advantages

Uniquely positioned at the crossroads of Europe and Asia, Armenia’s time zone makes collaboration on both continents convenient. It can also serve as a gateway to conducting business in the Middle East, making Armenia a strategically advantageous country for global expansion.

Armenians’ work ethic and cultural business practices align nicely with Western business standards, and most Armenians speak English. This makes it easy to incorporate Armenian employees with global team members. Armenians are also highly adaptable, making them valuable assets for expanding global tech and IT teams.

Hiring Compliantly in Armenia

Employment Contracts

Employment contracts are required for all employees in Armenia. Contracts are either for a definite time, with contract validity mentioned, or for an indefinite time, with contract validity not stated.

Employment contracts must include details like:

  • Where and when work happens
  • Employee job title
  • Job requirements
  • Working conditions
  • Probation period length

These contracts are essential to ensure compliance with local laws and regulations.

Working Hours & Pay

Armenia operates on a monthly payroll cycle. That means employees only get paid once a month, on the 15th. The National Monthly Minimum Wage is AMD 75,000 (a little under USD 200), and the minimum hourly wage is AMD 500 (or about USD 1.30).

Overtime is 150% of the employee’s standard hourly rate for each hour worked. If an employee works nights, the rate is 130% for each hour of night work. Employees are not permitted to work more than 12 hours a day.

Taxes

Armenia’s corporate tax rate is 18%. Employers are not required to make payroll contributions in Armenia; the employee must make all contributions.

The basic breakdown for contributions and taxes for employees is as follows:

  • Income tax: 20%
  • Pension contributions: 5% to 10%

Termination Process & Severance Pay

There is no at-will termination in Armenia. The only way an employee can be let go is if their contract expires or as a result of infractions like:

  • An inability to perform their duties
  • Too many unexcused absences

Termination details need to be provided in writing, and employees must be given an appropriate notice based on their length of service. This starts at two weeks for employees who’ve been with the company for under a year and goes up to 60 days’ notice for employees who’ve been with the company for at least 15 years.

Severance packages are typically one month’s pay, but it can vary depending on the cause of termination and who initiated the process (employee or employer).

Paid Leave Laws in Armenia

Vacation and Holiday

There are several different paid national holidays in Armenia. This mix of religious and non-religious holidays includes:

  • New Year’s Day
  • Second day of the year
  • Orthodox Christmas Day
  • International Women’s Day
  • Constitution Day
  • Armenian Genocide Remembrance Day
  • Victory and Peace Day
  • Republic Day

Employees also receive an additional 20 days of annual leave if they work a five-day week and 24 days if they work a six-day week. If their job is considered high-risk, employees are entitled to even more time off, up to 42 days, depending on their specific employment situation (how many days they work in a week, etc.).

Sick Leave

Sick leave covers employees who need to miss work because of illness. The employer provides 80% of the standard daily wage for days one through five. After the sixth day, social security manages and pays any remaining sick leave.

Parental Leave

In Armenia, mothers are entitled to a minimum of 140 days of maternity leave. This is divided into 70 days during pregnancy and 70 days post-birth. If there are complications during the pregnancy, mothers can take up to 85 days post-birth.

Fathers are entitled to five days of paternity leave following a child’s birth.

Why Digital Nomads Love Armenia

Technically, Armenia doesn’t offer a digital nomad visa. However, those wishing to live and work in Armenia can apply for a residence permit for foreigners starting a business. This permit also applies to sole proprietorships, so freelancers who work for worldwide clients should qualify for the one-year temporary residence permit, which is renewable. Permit holders have access to the same benefits as Armenian citizens, such as the national healthcare and education systems.

For those who don’t want to apply for the permit or aren’t sole proprietors, many nationalities can stay visa-free for up to 180 days in Armenia. This includes American, EU, and British citizens. For countries that require a visa, one can easily be obtained upon arrival for around USD 31, which allows visitors to stay in the country for up to 120 days.

Affordable accommodations are readily available for remote workers, and the capital, Yerevan, is currently sitting at #15 on the list of the safest cities in the world.

Confidently Hire in Armenia with Remofirst

Working with an Employer of Record (EOR) like Remofirst makes it easy for companies eager to tap into Armenia’s vast network of tech talent to hire confidently. We partner with experts who know the regulations, requirements, and tax laws to ensure you are fully comply with Armenian laws.

Contact us today to book your demo and learn more about how you can start hiring employees in new regions worldwide, like Armenia.