Armenia’s government has announced a groundbreaking 7-year support program for IT startups, aiming to fuel innovation and attract global talent. The initiative, set to run from 2025 to 2032, offers substantial tax breaks and incentives for emerging tech companies.
Minister of High-Tech Industry Mkhitar Hayrapetyan revealed the program’s details at a recent government meeting. The plan extends tax benefits for startups, previously granted annually, to a long-term arrangement. It also introduces an income tax refund scheme under specific conditions.
Existing startups with fewer than 30 employees can receive a 60% income tax refund if they’ve hired international workers since 2022 or plan to expand their workforce. “We’re focusing on young, talented graduates and retrained specialists,” Hayrapetyan explained.
The program also supports employee development, offering a 50% income tax refund for three months to workers who complete professional retraining courses.
In a first for Armenia, the initiative clearly defines high-tech sector areas eligible for support. These include electronic component manufacturing, computer game development, software design, biotechnology research, and aerospace engineering, among others.
Prime Minister Nikol Pashinyan highlighted additional benefits, stating, “The turnover tax for IT companies will drop from 5% to 1%, significantly reducing their tax burden. Scientific research firms will see income tax rates halved from 20% to 10%.”
The new program builds on the success of previous support measures. In 2024, the Ministry allocated 6.5 billion drams to IT companies, with an additional 1.5 billion drams planned by March 2025.
Armenia’s tech sector is rapidly growing, employing around 41,500 people by the end of 2024. It contributes 7-8% to the country’s GDP, with the entire high-tech sector generating a turnover of 1.15 trillion drams.
This ambitious initiative underscores Armenia’s commitment to becoming a regional tech hub, fostering innovation, and attracting international talent to its burgeoning startup ecosystem.
