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  • Employer of record
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Global Payroll Team
Written by Global Payroll Team
Last updated May 1, 2026
Expert Reviewed
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Mercans offers complete payroll, PEO and HR services in Armenia

In recent years, Armenia’s economy has continued to expand and the country offers a strategic location, a skilled workforce, and a business-friendly environment for international companies. At Mercans, we help organizations of all kinds to expand abroad, including into Armenia. In a matter of days, rather than weeks or months, your organization can start your Armenian expansion with our Armenia PEO, employer of record, and payroll services, even if you do not already have a presence in the country.

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Doing Business in Armenia

The pace of economic reforms, Armenia’s openness, and its increasingly digital public services continue to appeal to foreign investors and business owners. As a first step to entering the Armenian market, many prefer to visit Armenia in person and register a business. If you do not speak Armenian or plan to run your business remotely, a knowledgeable payroll firm like ours can help you minimize risks by ensuring compliance with tax, labor, immigration, and other regulations, avoiding pitfalls, and taking advantage of available government support and simplified administrative procedures.

Entity Registration and Incorporation Requirements

In Armenia, starting a business or expanding an existing one is relatively straightforward. From a variety of entity types, choose the one that suits your business needs and complete the required state registration, tax registration, and ongoing compliance formalities.

Banking

Banking Hours: 9.00 am to 6:00 pm from Monday to Friday

Working Week

The standard working week is generally from Monday to Friday, and normal working time should not exceed 40 hours per week or 8 hours per day.

Labor Law

Employment relations in Armenia are primarily governed by the Labour Code of the Republic of Armenia. The Labour Code regulates employment contracts, working time, rest time, leave, remuneration, occupational safety, disciplinary procedures, and termination of employment. Additional legal acts also apply in areas such as social payments, migration, and tax compliance.

Main Industries

Mining, food and beverage production, brandy, diamond processing, machinery, electronics, IT and business services

GDP Growth

5.9%

Dates & Numbers

dd/mm/yyyy

Official State Name

Republic of Armenia

Population

3.03 million

Capital

Yerevan

Major Languages

Armenian

Currency

Armenian Dram (AMD)

Internet Domain

.am

International Dialing Code

+374

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Armenia
Yerevan, AM
3:31 am, May 5, 2026
13°C
broken clouds
44 %
Wind Gust: 0 mph
Clouds: 75%
Sunrise: 5:57 am
Sunset: 8:00 pm

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Payroll

The payroll cycle in Armenia is generally monthly. There is no mandatory or customary 13th salary payment under Armenian law. In Armenia, overtime work is generally compensated at not less than 150% of the standard hourly rate, while night work is compensated at not less than 130% of the standard hourly rate, subject to the Labour Code and the terms of employment.

It is acceptable to provide employees with online payslips

Payslip

Employees receive paid annual leave of 20 working days in a five-day working week

Annual Leave

The employer generally pays temporary incapacity benefit for the first 5 working days, after which the state system applies under the applicable rules

Sick Leave

140 days of paid maternity leave and 5 working days of unpaid paternity leave

Maternity & Paternity Leave

14 days

Employee Termination

There are no provisions mandated by law regarding the 13th month salary

13th month salary

75,000 AMD per month

Minimum Wage

Overtime payment is generally at least 1.5x the employee’s ordinary hourly rate

Overtime

Severance pay depends on the ground for termination and may be linked to average daily earnings under the Labour Code

Severance Pay

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Tax and Social Security

Armenian-resident entities, as well as non-resident entities doing business through a permanent establishment, are liable for corporate income tax. For tax residents, worldwide income is taxable, while non-residents are generally taxed on Armenian-source income. Corporate income tax is charged at a standard rate of 18%.

Tax

Employment income in Armenia is generally taxed at a flat income tax rate. The standard VAT rate is 20%. Armenia generally does not impose a traditional broad employer social security rate for private sector employees, but mandatory funded pension social payments apply for eligible employees under the funded pension regime.

18%

Corporate Income Tax

20%

Personal Income Tax

20%

Sales Tax

20%

VAT

Social Security

Armenia’s employee social payment system includes mandatory funded pension contributions for eligible employees. In general, employees born after 1 January 1974 make funded pension contributions, while the employer does not pay a separate standard social security contribution in the same way as in many other jurisdictions.

5%

Funded Pension Rate

0%

Social Security Rate for Employers

5%

Social Security Rate for Employees

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Employment Law

In Armenia, it is mandatory for employers to formalize employment by signing an individual employment contract or issuing an individual legal act on hiring, and employment contracts are commonly used in practice. The Labour Code remains the main source of employment regulation. The minimum monthly wage in Armenia is currently AMD 75,000.

Employment Agreement

The Labour Code states that standard working time should not exceed 40 hours per week, and a daily work period generally must not exceed 8 working hours. The maximum working time, including overtime, should not exceed 12 hours per day. Accurate records of wages, time, and leave must be maintained by the employer at all times.

Working condition

Employees must be provided with paid rest and unpaid meal breaks in accordance with the work schedule and the nature of the work. The beginning and end of the working day are determined by agreement of the parties or by internal regulations, subject to the Labour Code.

Leaves

The minimum annual paid leave in Armenia is 20 working days in the case of a five-day working week, and 24 working days in the case of a six-day working week. Extended and additional annual leave may apply to specific categories of employees and to work performed under hazardous or special conditions.

Employment termination

The employment relationship may end in a number of ways including resignation, expiry of a fixed-term agreement, dismissal, redundancy, or other grounds provided by law. Dismissal must be based on valid legal grounds and follow the required procedure. Notice and severance obligations depend on the reason for termination.

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14 days

Minimum notice period for terminating an employee

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12

Total number of public holidays

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40

Working hours per week

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3 days

Total number of days for Compassionate & Bereavement Leave

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Immigration

As a general rule, a foreign national who intends to work in Armenia must have the appropriate right to work and residence status. Armenia operates an electronic work permit system, and certain categories of foreign nationals, including some highly skilled specialists, business owners, executives, and other exempt groups, may be exempt from the work permit requirement. In general, a work permit is issued for the duration of the employment contract, but not longer than one year at a time.

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Residency permits

Foreign nationals coming to Armenia for employment generally require a work permit and a temporary residence permit unless an exemption applies. Temporary residence status is commonly granted for the duration of the employment contract and may be renewed in accordance with the migration rules in force.

Work Permit Validity

Up to 1 year

Required Documents

An application form

The employee’s passport

A diploma or other document showing education or qualification for the job, where relevant

Photographs, where required

Proof of payment of the applicable state fees

Employment contract or job offer details as required by the electronic work permit system

Compliant, reliable, error-free and touchless payroll in Armenia

Build the best team and hire top talent compliantly in Armenia. Get in touch with Armenia payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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    FAQs

    What is an Employer of Record (EOR) in Armenia and how does it support foreign companies?

    An Employer of Record (EOR) in Armenia legally employs staff on behalf of foreign companies. It manages employment contracts, payroll, taxes, social security, and compliance with local labor laws, allowing companies to hire employees quickly without establishing a local legal entity.

    Why should businesses choose an EOR instead of registering a legal entity in Armenia?

    Using an EOR avoids the time and costs of setting up a local company. It provides fast market entry, reduces administrative work, ensures legal and tax compliance, and is ideal for businesses testing the Armenian market or hiring a small team.

    How does payroll outsourcing in Armenia ensure compliance with local labor and tax laws?

    Payroll outsourcing ensures accurate salary processing, tax filings, and social security contributions according to Armenian law. It reduces compliance risks, avoids penalties, and provides expertise on local labor and tax regulations.

    Can an Employer of Record in Armenia hire employees and manage visas for foreign businesses?

    Yes, an EOR can legally hire employees for foreign companies and handle work permits. It manages HR operations, payroll, and compliance with local labor and immigration laws, enabling smooth operations without a local entity.

    What are the main advantages of using EOR and payroll services in Armenia for global expansion?

    EOR and payroll services enable faster hiring, local compliance, reduced legal and financial risk, and access to market expertise. They allow companies to expand into Armenia efficiently while focusing on business growth.

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