“Our government implements an open-door policy towards foreign investments, providing for full property ownership” – PM Attends Armenian –Italian Business Forum
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On a working visit to Italy, Prime Minister Nikol Pashinyan today attended an Armenian-Italian business forum, referred to as “Armenia, new reality: Platform to Eurasian market,” co-hosted by the Embassy of the Republic of Armenia in Italy, the Italian Trade Agency, as well as Assolombarda and Mediobanca investment companies.
Addressing the event, the Prime Minister stated:
“Distinguished members of the business community,
Ladies and gentlemen,
I am delighted to be here today, and it is my privilege to address the distinguished members of the Italian business community.
I thank you very much for organizing and hosting this very important event and appreciate the opportunity to talk with you about Armenia, its economy, and the prospects for developing Italian-Armenian business ties.
The Armenian-Italian relations have a centuries-old history. These relations were not limited by the economic benefits only, as they were always running parallel to the scientific and cultural, humanitarian collaboration, innovation and technological exchange.
We believe that modern-time Armenian-Italian relations contain the same spirit of partnership and mutual trust. Today the two countries have significant cooperation in the economic, social, and humanitarian spheres.
Trade and economic cooperation is an important component of our relations. Italy is Armenia’s second largest trade and economic partner among the EU countries. In the first nine months of this year alone, trade between the two countries increased by about 14%.
Let me inform you that only in the recent few weeks Italian Sartex and Ceramisia opened their manufacturing branches in Armenia.
Just 15 days ago, Telecom Italia Sparcle signed a joint venture with the Armenian Ucom to provide internet services.
In July, we launched the construction of a combined cycle gas-turbine power plant. This project is implemented by Renco with an investment of about USD 250 million. The Italian state-run Siemens and German Siemens companies are also involved in the investment program. Renco has been engaged in business activities in Armenia since the early 2000s and has invested in hotels, luxury housing and office buildings.
In addition, in June 2019, we hosted an Armenian-Italian business forum – the first business forum with the participation of foreign investors taking place in Armenia after the Velvet Revolution of 2018.
Today Armenia is a country of fundamental transformations, which opens wide prospects for the economic cooperation with Italy and other European partners.
After the Velvet Revolution of 2018, we initiated reforms to modernize our political and economic institutions so as to strengthen democracy and establish conditions conducive for the economic growth and development.
In this regard, we have already reached significant achievements. We have succeeded in eradicating systemic corruption. We have eliminated oligopolies and monopolies, which used to exercise political influence to gain economic results. We reinforced the rule of law and established level playing field for all economic players.
We are currently undertaking robust measures to reform our judiciary so as to have truly independent and efficiently working courts.
Today, we are also changing the way we manage our economy. I believe that the reforms and economic revolution undertaken in Armenia would have a long lasting effect on the country’s economic development.
Meanwhile, let me share with you some results already recorded in Armenia. In 2018, we registered a 5.2% economic growth and maintained a low inflation rate. These are very positive results for a revolutionary year.
Positive dynamics continues this year, too. In the first six months of 2019, we had 6.5% of GDP growth. We had a 9% increase in exports. Recently Moody’s has improved Armenia’s rating to Ba3.
In September 2019, we issued 500-million-dollar Eurobonds with a maturity of ten years and coupon rate of 3.9%. The actual demand for the Armenian Eurobonds was four times bigger than the offering. It has at least demonstrated the foreign investors’ trust in our economic policy and the ongoing structural reforms.
These results are promising. However, there is much more that has to be done yet.
If you ask me why you should invest in Armenia, my answer will be the following: investing in a small country with global networks and skilled labor force is quite promising.
Our government aims at introducing technological education, developing soft skills, and helping students to identify their aptitude, through investing in primary, vocational and higher education.
Armenia provides an excellent opportunity for investors in high tech industry and specifically in information technologies.
Armenia has the potential to become internet traffic hub for our wider region. Last month we hosted the World Congress on Information Technologies - one of the largest and most prestigious ICT events in the world.
Banking, tourism, agriculture, manufacturing, renewable and textile are also attractive for foreign investment.
It is a particular pleasure to inform you that recently Armenia has been included in Booking.com’s top 10 trending destinations for 2020. In addition, in 2019, Armenia improved its position by 5 points in the Tourism Competitiveness Index presented by the World Economic Forum.
By the way, according to the result of the first ten months of 2019, we have already 14% growth in tourism. From January, 2020, Ryanair is starting direct flights from Milan and Rome to Yerevan.
Our government implements an open-door policy towards foreign investments, providing for the full property ownership.
Foreign investors can have unimpeded access to any sector with no restriction for personnel recruitment, free and unlimited repatriation of profits, unlimited currency exchange on market rates, and guarantees against nationalization. The five-year grandfather clause, protecting foreign investors against investment-related legislation changes, is also a part of our foreign investment framework.
By the way, within recent one and a half years we had a very positive amendment in our Tax Code. We have reduced our income tax and revenue tax. We set a 23% flat income tax and now we are going to continue this process in order to make our income tax even lower - 20% flat tax. Revenue tax was also reduced to 18%.
With regard to international economic relations, Armenia has bilateral treaties on investment promotion and protection with 43 countries including the United State.
Armenia is a member of the International Centre for Settlement of Investment Disputes. We have treaties on avoidance of double taxation and the prevention of fiscal evasion with 46 countries. This means that the investors of contracting parties are granted a number of guarantees inclusive of national treatment, protection from expropriation, free transfer of means and full protection and security.
According to the World Bank, Armenia is ranked 47th among 190 countries at ease of doing business. By ease of starting business, Armenia is the 10th and by registering a property is the 13th in the world. According to the Index of Economic Freedom, Armenia is the 47th in the world.
I promise and guarantee as the Prime Minister of Armenia that in all those directions Armenia will continue to improve its performance.
Some may claim that Armenia has a small market. I would challenge such a point of view. Armenia has an unimpeded access to the market of the Eurasian Economic Union with about 180 million consumers.
The Eurasian Economic Union has free trade agreements with Singapore, Vietnam and Serbia. FTA’s are under the negotiations with India, Israel and Edypt. An agreement of economic cooperation facilitating trade and investments between the Eurasian Economic Union and China was also signed last year.
As you know, Armenia is a member of the Eurasian Economic Union, and we are the chair country in the Eurasian Economic Union.
Armenian producers benefit from GSP+ preferential treatment with the European Union, and GSP with the United States and some other countries.
Armenia is deepening cooperation with the European Union through the Comprehensive and Enhanced Partnership Agreement.
With the United States we have a Trade and Investment Framework Agreement, which provides strategic framework and principles for dialogue on trade and investment issues.
In a relatively short time, we have managed to transform Armenia into a country with equal opportunities for all, providing incentives for businesses and startups, and making our country a better investment destination.
My call, my message today is to join our efforts to build new Armenia, unite our strength to make Armenia competitive and attractive to live. Thank you for your attention.”
During the Armenian-Italian business forum, RA Minister of Economy Tigran Khachatryan delivered a summary report, referred to as “Why Choose Armenia,” in which he presented the current status of Armenia’s economy - agriculture, renewable energy, urban transport, infrastructure and information technologies, investment opportunities in waste management and the financial market.
Later on Prime Minister Pashinyan attended a Q&A session on the margins of the Armenian-Italian forum, during which he answered the participants’ questions. Nikol Pashinyan spoke about technological development, infrastructure improvement, winemaking, fruit vodka and wine production projects underway in our country, his government’s reform agenda, the EU-Armenia cooperation agenda, the importance of the Comprehensive and Enhanced Partnership Agreement, Armenia’s presidency in the EAEU, Armenia’s readiness to act as a bridging platform between the EAEU and the EU.
With reference to information technology, Nikol Pashinyan said the IT sector is on the rise in Armenia; there is great development potential, which prompted his government to initiate educational reforms in a bid to promote technology-extensive and business-oriented education.
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The “Armenia, new reality: Platform to Eurasian market” forum has brought together some 150 participants - Italian and Armenian business people, representatives of the Armenian community of Milan, mass media representatives.