“Armenia can repeat the success of Singapore” - Russian entrepreneurs continue to flock to Yerevan
Russians who moved their business to Yerevan
The influx of Russian, Belarusian and Ukrainian businesses to Armenia continues. Over the past month, 1,180 citizens of Russia, Belarus and Ukraine have registered as private entrepreneurs, 410 of them have founded limited liability companies. During the same period, 3 funds and 2 closed joint stock companies were registered.
The active influx of foreign business to Armenia is a consequence of the war in Ukraine and sanctions against Russia. Most of the new businesses are IT companies.
What choice did Russian businessmen have, and why did they decide to move their business to Armenia? Stories of Russians who moved to Yerevan.
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“Choosing between four countries”
Entrepreneurs who moved to Armenia say they made the decision after they explored the possibilities of settling in other countries. The choice, they said, was between Turkey, the United Arab Emirates, Georgia and Armenia.
Oleg Aleksandrov, who founded his IT company in Russia 5 years ago, explains:
“Dubai has a good business environment, it’s an incredibly developed city, but it’s expensive there, that is, IT people who receive $ 2,000-4,000 definitely cannot afford Dubai.
In Turkey, there is a law according to which a company must hire 5 locals per one foreign citizen. Accordingly, it will not be possible to work there legally.
Georgia is also a great country, but lately there have been a lot of signs of Russophobia, which have been actively exaggerated in the Russian media. Because of this, not many people want to go there, although in principle it is possible to do business there.
Armenia is a country where they speak Russian, where you can legally conduct your business, where you can open a company, bank accounts. At the same time, there are a lot of flights with Russia, if necessary, you can fly there, return and fly again. Business communication is not broken here”.
The entrepreneur says that his organization works with foreign partners, and due to problems with banking operations, it was necessary to urgently make a decision to move.
The company has already leased an office in Yerevan for a long period of time and has begun the process of phased relocation of staff. 25 out of 120 employees are already in Armenia.
In the near future, the organization plans to replenish its staff with local specialists. But before that, they organize training programs to give newcomers an opportunity to deepen their knowledge and practice in the company.
They also an intend to meet with local and other IT companies that have moved to Armenia to exchange experiences and discuss plans for the future.
“Attractive business environment and pleasant attitude”
The founder of another IT company, Ivan Alekseev, shares his own reasons for moving to Armenia:
“It is clear that all entrepreneurs are now facing difficulties in one way or another, especially those whose revenue or expenses are related to the foreign currency. Most of our revenue and expenses have always been in the ruble zone, so we haven’t had any serious problems or difficulties so far.
We have been planning to open offices in different countries for a long time, but on February 24th the whole business environment changed and we began to consider the possibility of opening an office in countries where flights are available, etc. So we chose Armenia, and we are very satisfied”.
The businessman says that in Armenia, not only the business environment is attractive to him, but also simple human relationships:
“The entrepreneurial culture is developed here, everyone understands that this is a value. But the human factor is also important. This seems to be my place. I like the attitude of people, the culture and spirit here. For example, when my two-year-old child goes out for a walk, they either give him fruits, or sweets, hug, or kiss him. So he’s a little superstar here. And it’s very captivating”.
“Expensive flats and office spaces, long queues”
“The first difficulty we faced is housing prices, because we need to transport a fairly large number of people to Armenia, and everyone needs apartments. Prices have gone up a lot and they keep going up. Secondly, there were problems with opening bank accounts – both for individuals and legal entities, because there was a large influx of visitors. Because of that, banks began to change the rules and procedures for opening accounts. These are the problems we had, which, in principle, are solvable”, says Oleg Alexandrov.
He got the impression that everyone in Armenia wants to help, but often does not fully understand what to do in a given situation. The businessman is also stressed by the fact that some processes are dragging on for a long time:
“In Armenia, today does not always mean today, most likely it is tomorrow, perhaps the day after tomorrow”.
After much thought about the problems that arose after the move, Ivan Alekseev decided laughed them off and let go:
“My biggest problem in Armenia is that during meetings, including business meetings, I am not allowed to pay the bill”.
“Connections work wonders here”
A special working group has been set up at the Ministry of Economy to support companies that have moved to Armenia. And Ivan Aleksev is actively in contact with government agencies and officials through it.
“Here networking works at a fantastic speed. It is possible to reach the ministers in 2 calls and offer some idea at the expense of the companies that have moved to Armenia. In this regard, everyone here is open to innovation and change”, he says.
The entrepreneur has already proposed to include the families who moved to Armenia in mortgage lending programs.
Many local organizations help him and other relocated businessmen to adapt to the new environment and solve problems that arise during the deployment of activities.
One of the activists of this initiative is Boris Fokin and his company “Hay’Li Human Development”. He moved to Armenia six years ago and now not only shares his personal experience with Russian colleagues, but also helps to solve problems together with his team:
“We have been engaged in business communication for half a year. We have invited businessmen and entrepreneurs from other countries here to acquaint them with the business environment in Armenia, so that people can understand what kind of market it is and how to act in it.
We continue business communication to this day and help launch business projects, register companies and find connections with other businesses so that we can develop here effectively”.
According to Boris Fokin, Russian businessmen in Armenia are especially attracted by the favorable tax policy in the field of information technology and the ability to quickly solve problems. But the government agencies, in his opinion, should improve the system of electronic circulation of documents, which will speed up all processes and improve the quality of service for organizations moving to Armenia.
Influx of IT businesses and economic growth opportunities
Russian specialists who have moved believe that their companies create real chances for the development of the Armenian economy.
“The opportunities that have been created in Armenia for doing business provide a potential chance to create a favorable economic environment. And this is an opportunity for economic growth. This is an opportunity to improve the living standards of the population, a chance to become a leader in certain industries, for example, a regional leader in the field of IT developments, high-tech services. This is a very good chance to make our economy oriented towards growth, to create stability so that the companies that come here create long-term projects here.
If the conditions here are good, a phenomenon may arise, as in other small countries that have managed to attract foreign capital to build a strong economy”, Boris Fokin believes.
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According to Oleg Alexandrov, while maintaining the pace of the influx of foreign companies, the standard of living in Armenia will increase in the coming years:
“The arrival of such an active class as entrepreneurs, the middle class in the face of programmers, will most likely push the environment here to develop even faster. Banking applications will improve, a large number of services will improve – in general, the whole culture that has been formed in Russia in recent years.
Second, new companies will create jobs. Thirdly, the level of salaries in Russia in this area was higher than in Armenia, respectively, the locals will also be paid higher salaries, because the level of remuneration in the company should be equal. Accordingly, IT specialists’ salaries will rise here, money will be spent, and there will be tax revenues, and, amid that, the standard of living should rise in the next 3-5 years”.
Ivan Alekseev believes that even more ambitious plans can be made:
“I believe that all plans will turn into successful business projects. I believe that IT Singapore can be built here”.
According to the businessman, he tells his compatriots that there is such a successful option for moving, but does not persuade them to follow his example.
“In these difficult times, the only thing left for us is to work and make cool, effective projects. Thus, we will make a difference, make the world at least a little better. And it doesn’t matter from which country we influence the execution of this plan. But if you come to visit us in Armenia, we will meet you and feed you with delicious barbecue”.
Given the fears of the heroes of our story regarding the safety of their families, relatives and businesses remaining in Russia, the names have been changed.