Business in Armenia: sectors worth investing in
Sectors to invest in Armenia
Local experts consider Armenia an attractive destination for investment. They point out that although the market is small, consumer demand is high, and businesses can access both traditional and emerging export markets. They also highlight that tourist flows to Armenia continue throughout the year, creating additional opportunities for service providers.
Economists name various sectors as particularly promising for investment. At the same time, they note that success often depends less on the sector itself and more on effective management and innovative ideas.
Before starting a business, experts advise both foreign and local investors to study:
- the sectors and their potential,
- tax and customs incentives,
- the readiness of potential employees to fulfil their responsibilities,
- legal regulations,
- communications infrastructure,
- and consumer behaviour.
In the business world, investors usually act only after a detailed analysis of all advantages and risks. However, some make decisions based on personal, subjective forecasts. Many of those who take this approach succeed thanks to determination and unconventional strategies.
On investment opportunities in Armenia, both personal experiences and professional assessments offer valuable insights..
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The story of a family returning to Armenia from France
Lara and Vachagan Arakelyan moved to France to study and lived there for a total of 12 years. They say they faced no social or financial difficulties during their stay. However, after another vacation in Armenia in 2023, they realised they no longer wanted to work for others and decided to start their own business.
“For about two months, my husband and I studied the market, asked friends for advice, and did calculations. In the end, we realised we were spending too much energy on this. Armenia is a challenging country for investment. We concluded that if we continued analysing the business solely through statistics, we might never actually start. Here, statistics and reality differ somewhat,” Lara said.
The couple then discussed their strengths and weaknesses and identified sectors with untapped potential.
Ultimately, they decided to start a service business, specifically offering cleaning services.
“We chose this because working women in Armenia need help at home. At the same time, few companies offer these services, and those that do rarely provide high-quality work. We both work well with people. We quickly understand problems, assess situations correctly, respond appropriately in critical moments, and find solutions. We bought the best equipment and carefully selected our staff, including a driver and an accountant.”
To ensure high standards, they organised training courses for their employees, teaching them how to use different cleaning materials and equipment. To avoid communication issues with clients, Lara and Vachagan hired staff who, in addition to their native language, speak English and Russian fluently.
Within a year and a half, they built a team of 24 people. They are now considering expanding the range of services they offer.
“It’s not that cleaning services don’t exist in Armenia. We just have a different approach. We respond quickly to clients’ requests, are friendly, and build good relationships. People return to us and recommend our services to others. That means they are satisfied. One good cleaning isn’t enough; polite communication matters too. People want to be treated well. They want a pleasant atmosphere and a quality product. And they are willing to pay well for that,” Lara said.
What foreign investors should know
Local residents generally have some understanding of the business environment and conditions in which they start ventures. For foreign investors, the situation is more challenging, especially if they lack the resources to study and analyse the market.
The state provides foreign investors with strong protections and guarantees. In particular, foreign investments in Armenia are safeguarded against expropriation and nationalisation. Should such a situation arise, investors are guaranteed full compensation.
Investors can use both national and international dispute resolution mechanisms. Their investments are protected by bilateral and multilateral international investment treaties.
Armenia actively participates in international investment agreements and is a member of the International Centre for Settlement of Investment Disputes. The country has also signed the New York Convention on the recognition and enforcement of arbitral awards.
Armenia’s investment appeal: a business consultant’s assessment
Arshavir Matevosyan is a business consultant who primarily focuses on attracting international investments.
According to him, despite regional, political, and geopolitical challenges, Armenia has business sectors with low failure risk that remain attractive for investors.
First and foremost is the technology sector. It is rapidly developing, competitive in terms of human resources, and benefits from tax incentives.
“I would highlight several areas worth launching business projects in: software development, equipment automation, blockchain [a system for storing information that makes alteration or hacking difficult or impossible], security systems, and data processing and analysis. This sector is set to grow significantly in the coming years, especially with state support,” Matevosyan said.
He points to a $500 million artificial intelligence factory under construction in partnership with NVIDIA, Firebird, and Team Group as a major boost for the tech sector and additional investment attraction.
Another promising sector he recommends is healthcare, specifically aesthetic services.
“The country has enormous untapped potential. In recent years, many Russian citizens have visited Armenia for aesthetic procedures. The main challenge is that local medical centers and specialists often do not meet international standards. Several projects I was personally involved in failed due to the lack of international certification,” he explained.
Matevosyan believes aesthetic health tourism could expand significantly in the coming years. He suggests running marketing campaigns to make Armenia more visible in this segment.
“Armenia can gain a competitive advantage here thanks to its pricing. Similar procedures in other countries cost several times more,” he said.
He also considers agriculture attractive for investment, recommending unconventional approaches.
“Although we face export challenges, agricultural exports should not be underestimated. We must leverage our climatic potential and grow crops in demand in markets like Georgia, Russia, China, and others. There is already a successful example — asparagus exports. I would suggest exploring other non-traditional crops for Armenia,” he said.
Matevosyan stresses that innovation is essential in agriculture. He believes it is impossible to build a successful business by growing traditional crops using conventional methods.
He also recommends considering investments in jewelry and diamond processing, alternative education, and extreme entertainment.
Sectors to invest in Armenia
