Investment Guide Armenia (PDF)

Home , Hrazdan (river)

Investment guide Armenia 1

Investment guide Armenia

KPMG in Armenia

In association with:

Ministry of Economic Development and Investments Republic of Armenia

September 2016 kpmg.am

Armenia Profile 7

Favorable Environment for Investment 9

Investment Opportunities 12

Economic Drivers 16

Government Industrial Policy 19

Regulatory Framework 21

Financial Market 31

Country Rating 34

Membership to International Organizations 35

We are in Armenia! 37

Abbreviations and Glossaries 38

Dear Investor,

The Government of Armenia Moreover, investors and foreign is carrying out deep and investment are fully protected by the comprehensive reforms of the law. business environment due to I am confident that Investment which today Armenia becomes Guide – Armenia will arm you an “open-door” destination with a with the knowledge and the various opportunities for beneficial understanding of business investment and business activities. environment in Armenia and will We believe that Armenia offers encourage you for new businesses plenty of investment opportunities, and new investments. in sectors that have traditionally been strong contributors to the Welcome to Armenia! country’s economy as well as in niche sectors that have not been developed or maybe even Sincerely yours, discovered yet. Suren Karayan Minister of Economic You can use the opportunities of Development and Investments Armenia that serves a unique bridge Republic of Armenia between the member states of the European Union and the Eurasian Economic Union, Iran, as well as Canada, Switzerland, Japan, Norway, and the USA with which Armenia has a preferential trade opportunities and a proved track record of cooperation.

including general information about Switzerland, and the United States. the country, economy, culture, legal Since 2009, the country has also and taxation requirements related been included in the list of countries to investments, government plans granted GSP+ by the European and priorities for the development of Union. Armenia. We believe that Armenia will A number of sectors have shown continue its growth and become significant growth during the last an increasingly attractive country few years, including innovation and to invest in. Notwithstanding the technologies, financial services, relations with some neighboring agriculture, mining and hospitality. countries, Armenia continues to In particular there has been a move forward towards growth and significant increase in the IT sector prosperity. with a total turnover of IT industry comprising 559 million U.S. dollars. We are pleased to introduce you the In 2015 the industry recorded an Sincerely yours, new publication “Investment Guide - average annual growth of 21%. Tigran Gasparyan Armenia” issued by KPMG Armenia Managing Partner On January 2015 the Republic of in cooperation with the Ministry of KPMG in Armenia Economy of the Republic of Armenia Armenia became a member of and Enterprise Incubator Foundation. Eurasian Economic Union (EEU), The publication is mainly focused which specifies unified customs on presenting Armenia’s Innovation territory providing free movement sector and its notable developments of goods within the countries of in the recent years. Our publication EEU. Armenia has signed free- also includes basic information for trade agreements with Georgia and foreign businesses and individuals most of the CIS countries. Armenia who are thinking about or intend currently enjoys GSP beneficiary to make an investment in Armenia, status with Canada, Japan, Norway,

R&D. The industry demonstrated Besides, in 2000, the Government a sharp increase in the number of of Armenia has declared High newly formed companies, both local tech as a priority sector and as start ups and branches of most the primary constituent of the prominent multinational country’s economic progress, and corporations such as Microsoft, is currently supporting the sector IBM, Oracle, Cisco, Synopsys, with various incentives, including tax National Instruments, D-Link, privileges, support to infrastructure VMware, Mentor Graphics, etc. development and innovation. Due to its skilled and comparatively Recent developments in the low cost labor force and world Armenian ICT sector, including major class R&D capabilities, Armenia acquisitions and investment projects continues to be the regional have positioned Armenia as a leading leader in IT and high-tech industry. global technology hub with focus on With the average annual productivity product development and creation of ICT and high-tech sectors are one of of USD 48,000 per technical start-ups that are competitive in both the growth drivers of the Armenian employee, the sector is considered international and local markets. economy. In last 5 years with double- one of the most productive sectors. We hope this Investment Guide digit growth, the output of this sector During last years the number of will provide you with better increased 4.3 times, reaching to employees in the sector significantly understanding about business USD 450 mln and the number of increased, particularly, the number opportunities and investment companies in IT sub-sector increased of technical staff has almost been environment in Armenia and will about 2.4 times reaching to 429 at doubled. allow to create solid grounds for the end of 2015. From 2010-2015 IT Armenian ICT sector goes in line the future mutually beneficial industry is has grown at the CAGR with the development trends of investments. of 33.98%, becoming the fastest- global economy and has become a growing sector of the Armenian regional innovation hub with many economy. organizations including Microsoft Sincerely yours, These developments in the sector Innovation Center, Armenian National Bagrat Yengibaryan showed transition from being an Engineering Labs, IBM Innovative Director outsourcing industry to an R&D Solutions, and Technologies Enterprise Incubator Foundation generating industry where about Center, Armenian-Indian Center for 50% of revenues of half of the Excellence in ICT, as well as Gyumri companies is generated from own and Vanadzor technology centres.

Total area: 29,734 sq km Borders with: Georgia, Azerbaijan, Iran, Turkey

Vanadzor Ijevan Population: Gyumri 2,998.6 thousand (as at 1 January, 2016) Hrazdan Ashtarak Capital: Gavar Yerevan (1,074.3 thousand) Yerevan Armavir Large cities: Artashat Gyumri, Vanadzor Yeghegnadzor Government: Presidential Republic

Monetary unit: Armenian Dram (AMD) Kapan Climate: Continental

Current Investment Climate

Armenia has a positive and There are almost no restrictions open attitude towards foreign concerning the sectors in which investments. The reforms related a foreign investor may invest, to the economy and infrastructure, except the territories where foreign macroeconomic stabilization investments may be restricted and economic growth have taking into account necessity of contributed to the development and national defense. A prior approval implementation of the country’s for making an investment is foreign investment policy. generally not required, except for the investments made in regulated The main principles of the establishments, such as banks, investment policy may be investment companies and certain summarized as follows: public utilities. —— A liberal attitude towards

foreign investments and Open Door policy —— Protection of investors’ rights —— Provision of equal conditions for foreign and domestic investors.

Investment incentives

Foreign investors can benefit from the —— No screening and specific Convention of Investment Disputes following investment incentives: authorization required for making (ICSID), CIS Multilateral Convention investment on the Protection of Investor Rights. —— 100% ownership permitted —— No restrictions on remittances In addition, it has double taxation —— Companies registered by a treaties with 41 countries as of 2016. —— No restrictions on staff foreigner in Armenia have the The benefits of these particular recruitment right to buy land. Although foreign treaties are easy to access by citizens are not allowed to own —— No sector-specific or geographic providing supporting documentation land in Armenia, they are offered restrictions on investments, of residency from foreign tax long-term lease contracts except in certain national defense- authorities. —— VAT payments postponement for related sectors Since January 2015 Armenia is a up to 3-year period for importing —— Customs duty exemption. member of the Eurasian Economic equipment and goods within the Materials and equipment/ Union (EEU), which creates the scope of investment projects, technology imported from following opportunities: subject to the Government non-EEU country that cannot approval be replaced by materials and —— Duty free import of raw materials —— Free exchange of foreign equipment produced by EEU from EEU member states. currencies country to implement investment —— No customs formalities during project in the priority sector —— Free repatriation of profit mutual trade between EEU of economy of Armenia and member states, which leads to —— In case of any changes in exceptionally in the territory of financial costs reduction and time- legislation foreign investors can RA are exempted form customs consuming for business. choose which law to use for duties. up to a five-year term (five-year —— No non-tariff measures of trade —— Tax exemptions in close to border grandfather clause) and trade technical barriers areas of Armenia between EEU member countries. —— Free Economic Zones (no value —— Tax exemptions in Tavush region added tax, no property tax, no —— Favorable import tariffs for about of Armenia (operations within the profit tax, no custom duties) 750 products. framework of investment projects —— Profit tax privileges for large above 2 billion AMD (except Armenia has signed free-trade exporters (exported goods and those in mining and chemical agreements with Georgia and most of services for at least 40 billion production sectors) the CIS countries. Armenia currently AMD (about 84 million USD), enjoys GSP beneficiary status with except those in mining, jewelry, Armenia has signed bilateral Canada, Japan, Norway, Switzerland, precious metals and stones treaties on reciprocal promotion and the United States. Since 2009, processing, excisable goods and protection of investments Armenia has also been included in the production) with 41 countries. Armenia is also list of countries granted GSP+ by the a signatory of the International —— No export duties and restrictions European Union.

Foreign investment legislation Investment Promotion and Support

The Law on “Foreign Investments” Ministry of Economic Development For more information regarding sets forth the rights, guarantees and and Investments of Republic of investment climate, business privileges for foreign investors. Armenia is responsible for investment opportunities as well as about policy elaboration and business available investment projects The law guarantees equal treatment environment improvement. you can contact of foreign and domestic investors, Investment Policy Department restricts the government’s ability Department of Investment Policy [email protected], to confiscate investors’ property, of the Ministry of Economic tel. +374 11 597 125 ensures full compensation in case Development and Investments of nationalization or confiscation by of Republic of Armenia is Development Foundation of Armenia the government, provides access to responsible for the development serves as a central point of contact Armenian and international courts to of investment policy, including for the investment process, free of resolve commercial disputes, allows elaboration of legislation for free charge to the investor. The foundation for full repatriation of profits and economic zones, improvement of helps companies from all parts of the property. investment environment, monitoring world to start new business ventures and assistance of public and in Armenia as well as expand existing Foreign investments are allowed private investment projects and operations. in wide sectors of economy and implementation of the investment in various forms. Investments are /www.dfa.am/ policy. protected for a period of five years from adverse legislative changes.

IT and High Tech

Armenia is an attractive technology (i.e. electricity and internet), the market with tremendous potential, Armenian government’s favorable competitive labor force, strategic policies towards outside investors, location and business environment cultural compatibility, existence of that offers great opportunities both for intellectual protection laws, and established and start-up entrepreneurs geographic location. and investors. There are 429 IT companies that As the Soviet Union’s main hub for operate in Armenia right now. Average software development, industrial annual productivity amounts to USD computing, electronics, and 48,000 per technical employee with production of semiconductors, the total workforce employed by the Armenia has kept its huge potential IT sector is 15,000 specialists. The for technology development and total turnover of IT industry is 559 continues to be the regional leader in million U.S. dollars. ICT and High-Tech industry. Armenian IT companies specialize Yerevan is at the top of the in mobile and cloud solutions, competition pool alongside cities embedded software development and such as Bangalore, Mumbai, Delhi, semiconductor design, customized Chennai, Ottawa, Montreal, Tel software and outsourcing, financial Aviv, Dublin, Kiev, Moscow, and software, multimedia, web design, St. Petersburg. Investors choose information systems and system Armenia for their investments due integration, etc. to the availability of trained, well- The recent developments in IT/ educated, English-speaking software High-Tech sector in Armenia showed programmers and engineers, 1 transition from being an outsourcing Source: EIF Armenia affordable skilled professionals, low industry to an R&D generating production costs, strong infrastructure

© 2016 KPMG Armenia. All rights reserved. Investment guide Armenia 13 industry where about 50% of and increase the number of technical Applications Laboratory for ECA revenues of half of the companies is graduates, and to expand support and (NOKIA) have been established to generated from own R&D. Meantime, financing mechanisms for technology further promote and develop R&D efforts are being undertaken to start-ups. potential in the country. strengthen the engineering sector and The technical workforce of Armenia Since 2000 when the Government of improve cybersecurity of the country creates a favorable investment Armenia declared the IT sector as one via the implementation of relevant climate for large ICT companies and of the priorities in the development public private partnerships. Multinationals, as well as private of the Armenian economy various The Armenian labor market is equity and investment funds. In recent targeted actions have been constantly supplied with skilled years the industry demonstrated undertaken to bring the decree to life. workforce in high demand a sharp increase in the number of One of the large undertakings for the thanks to learning mechanisms newly formed companies, both development of ICT sector in Armenia that Armenian universities have local startups and branches of most was the establishment of Enterprise applied over the decades. The prominent multinational corporations Incubator Foundation in 2002 within educational methodologies used such as Microsoft, IBM, Oracle, Cisco, the framework of the World Bank’s by the universities are enhanced by Synopsys, National Instruments, “Enterprise Incubator” project. Since interactive sessions and are always DLink, VMware, Mentor Graphics, etc. its establishment EIF has played a being updated to stay on par with the The high interest shown is mostly quality of internationally acclaimed due to the capabilities of local institutions of higher education. workforce to cater to the Research Universities put great stress on and Development needs of the large training students in IT fundamentals corporations together with the large and in educating them to understand potential in innovation creation. the entire practical process. Today, training methods applied by these Meantime the human capital in ICT universities are enhanced with in the country is constantly being new ideas and best traditions and upgraded and developed through approaches of internationally known implementation of higher education institutions of higher education. programs, trainings and support to scientific researches to keep up with In partnership with the private the growing demand of specialists sector, the Government of Armenia in the area of ICT in the country and focuses on and strongly supports abroad. the Information Technology industry by implementing this industry Therefore, Armenian National development strategy, adopted by Engineering Laboratory, Microsoft the Government in 2008. The main Innovation Center, IBM Innovative goals of this strategy are to develop Solutions and Technologies Center, technology and business incubation Armenian-Indian Center for Excellence infrastructure, improve the quality in ICT, mLab Regional Mobile

© 2016 KPMG Armenia cjsc. All rights reserved. 14 Investment guide Armenia major role in the development of ICT —— Gyumri Technology Center entertaining environment for industry in the country, covering every —— Vanadzor Technology Center young people to improve their aspect of the industry development – coder ranking through diverse —— Kapan Mobile Solutions from nationwide ICT related policy activities, including interactive Laboratory development and creation of national lessons, coding exercises, representations in global markets, to The Centers are aimed at creating an peer-to-peer challenges, and tailored services for startups, skills enabling environment of opportunities community Q & A. With over development and research projects. and services that would promote 90% of its community coding on job creation, will support talented mobile, more than 2M profiled EIF acts as a cross-point for all entities youth and provide incentives for coders, and 7M coding activities in the sector - multinationals and innovative business ideas and weekly, SoloLearn is a vibrant and small startups, public institutions and companies ultimately contributing receptive environment for early international organizations, and brings to the sustainable growth of the coders and professionals alike. them all together to act jointly towards region by involving and attracting new the ultimate goal of ICT excellence. —— Shadowmatic – an iOS app investments. developed by the Yerevan-based Furthermore, multiple projects have To support the ICT industry, the Triada Studio which won the been designed and implemented Government of RA has initiated the prestigious Apple Design Award in for the development of ICT sector in introduction of targeted tax privileges 2015; Armenia, such as: for startup IT companies (the law —— Joomag Company – providing —— Granatus Ventures – Armenian was ratified by 2015). A simplified integrated solutions for first Venture Fund procedure is set for creating start- publishing, distributing, tracking —— Various grant programs, including ups, and the start-ups have to pay and monetizing publications Deal Generation Matching Grants only 10% income tax and 0% profit online (creating digital interactive (within the framework of World tax during the first three years of magazines, newsletters, blogs, Bank’s EIC Project), operation. Among the recently catalogues, brochures, and launched successful Armenian e-books) to more than 300,000 —— Establishment of Technology startups are: worldwide publishers and many Centers more. — PicsArt – 75 million monthly active The Government emphasizes the — users and 300 million installs, The first Armenian Venture Fund, importance of regional development PicsArt was named one of the top Granatus Ventures initiated in 2013 by via creation of regional ICT centers. 5 “Hottest Startups of 2015” by co-investments from the Government That will lead to more proportional Forbes and Google Play ranked of Armenia aims at stipulating the and balanced development of the ICT PicsArt as one of the “Best Apps creation of new start-up companies sector in the country enabling the of 2015.” and the generation of the innovative talented young professionals from the businesses. The main directions of the regions to utilize their knowledge and —— SoloLearn –a global coding fund’s investments are: information skills in their homeland. Among the community, has grown in and communication technology, regional projects implemented in the popularity among millennials engineering, material science, clean sector in recent years are: and students by providing an technology and health care.

Key Economic Indicators: Armenia has had a positive annual 2014 2015 real GDP growth rate during the last Nominal GDP, USDm 11,644 10,562 5 years, keeping around 3-3.5% in the last three years. The compound Real GDP growth, % 3.5% 3% annual growth rate of real GDP for the years 2011 to 2015 has been 1%. Inflation (period average) 3% 3.7% Nominal GDP decrease in USD terms FDI, USDm 282 147 of about 9% in 2015 compared with 2014 was mainly due to the local FDI growth 3.9% (43.5) currency devaluation against USD. AMD/USD exchange rate (period average) 416 478 According to the IMF, the real GDP is expected to grow by 2.5% in 2016 and Source: NSS 2.8% in 2017. Later starting from 2018 to 2020 the IMF expects Armenia to have 3-3.5% annual growth rate in real GDP.

GDP (USD Billion) Overall the structure of GDP has been stable during the last five years Mainly the hotel, restaurant 8% 11 and entertainment sector has been 7% experiencing stable growth in recent 9 6% years. In 2015 GDP composition n 5% agriculture had the biggest share 7 billio 4% compounding 17.3%, followed by 5 3% Manufacturing and Mining, and public USD 2% administration both compounding 3 1% 11.2% share each. 1 0% 2011 2012 2013 2014 2015 Nominal GDP Real GDP growth rate (Right hand scale)

Source: NSS

Nominal GDP Structure

Other 100% Public administration, health and social work, 90% еducation 80% Information and communication 70% Financial and insurance activities Transport and warehouse economy 60% Real estate 50% Hotels, restaurants, art, entertainment 40% and recreation Wholesale & retail trade, repair 30% Construction 20% Electricity, gas and water supply 10% Manufacturing, ьining 0% Agriculture, hunting and forestry, ﬁshing 2011 2012 2013 2014 2015 Taxes on products (minus subsidies)

Source: NSS

FDI FDI in Armenia decreased in 2013 and was comparably stable in last 3 years. 700,000 Starting from 2011 FDI had a decrease over the years and decreased to USD 600,000 271 million in 2013. During the first 500,000 three quarters of 2015 the level of FDI increased by 0.4% compared to the 400,000 same period of 2014 and was USD 300,000 262 million.

200,000

100,000

0 2011 2012 2013 2014 2015

Source: NSS

CPI The average annual inflation rate for Armenia in 2011-2015 was 4.6%. The 9% average inflation rate in 2015 was 8% 3.7%. In recent years the inflation rate has been within the CBA targeted 7% inflation rate range. 6% 5% 4% 3% 2% 1% 0% 2011 2012 2013 2014 2015

Source: NSS

Foreign Tr ade In 2015 the import decreased significantly. This is overall the impact of the declining economy in the region 5,000 - and particularly in Russia as a main 4,500 -500 4,000 trade partner. The main countries from 3,500 -1,000 where Armenia imports are Russia, USDm 3,000 -1,500 Georgia, Iran, UAE and China. Armenia 2,500 -2,000 mainly exports to Russia, China, USDm 2,000 Germany, Iraq and Georgia. 1,500 -2,500 1,000 -3,000 500 - -3,500 2011 2012 2013 2014 2015

Import Export Balance

Source: NSS

The Government has declared building without any restrictions to international a knowledge-based economy as its markets with more than 500 million long-term strategic objective. On consumers. this basis, the guiding vision for the “Alliance” FEZ is the first Free industrial policy will be to turn Armenia Economic Zone in Armenia based on into a country producing high-value “RAO Mars” CJSC and “The Yerevan and knowledge-intensive goods and Computer R&D Institute” CJSC services with creative human capital at officially has launched on August 1, its core. Achieving this vision requires 2013 with “Sytronics Armenia” CJSC a phased approach that entails a as an organizer. gradual transition from resource- intensive production to capacity and The establishment of FEZ in Armenia skills, and subsequently knowledge- seeks to promote direct foreign based production to play a dominant investments, increase exports, create role in the longer term. new jobs, and generate prerequisites for sustainable economic development in Armenia. Free Economic Zones “Alliance” free economic zone has “Alliance” Free Economic Zone about 56,000 square meters of industrial area and 38,000 square Free economic zones (FEZs) in meters of office space. The zone is Armenia offer a unique opportunity for oriented to the production and exports entrepreneurs to establish businesses of high and innovative technologies in strategic sectors of the economy in the field of electronics,precision and to process produce and export engineering, pharmaceutics and goods with a reduced tax burden. biotechnologies, information FEZs allow the export of goods

© 2016 KPMG Armenia cjsc. All rights reserved. 20 Investment guide Armenia technologies, alternative 10 operating companies are currently Steps to become FEZ resident: energy, industrial design and present in the “Alliance” and 1. Submit business plan to the telecommunications (elaboration “Meridian” free economic zones. Governmental committee and production of technological Companies granted permission to equipment, systems and materials 2. Get permission from the operate in free economic zones can for data/information transfer) as well Government benefit from the following privileges: as in the fields producing goods not —— 0 % profit tax 3. Sign a contract with the FEZ produced in Armenia.. —— 0% VAT organizer The services offered by the state —— 0% property tax bodies in the FEZ are implemented —— 0% customs duty based on a simplified (“one stop shop”) principle. They can take advantage of tax benefits as well as of absence of exchange restrictions, free transfer of capital, profits and dividends. The preferential terms are supposed to reduce production cost and enhance competitiveness.

“Meridian” Free Economic Zone «Meridian» FEZ is a unique platform with cluster infrastructures for jewelry, diamond cutting and watchmaking manufacturing companies in the center of Yerevan. The free economic zone has about 25,500 square meters of manufacturing, service and office area, 10,180 square meters of exhibition halls, 6,000 square meters of diamond manufacturing area and around 10,000 square meters of auxiliary area (parking, storage, safes) 14 operating companies are present in the “Alliance” and “Meridian” free economic zones as of September 2016.

Legal forms for establishing state registration in the Republic The Law contains a grandfather a business of Armenia. State registration clause, which allows foreign investors includes also registration with the to apply the investment legislation, There are certain legal options for tax authorities. The one-stop shop effective for a five-year period establishing a business (commercial principle is applied in the process from the moment of making the activities) in the Republic of Armenia: of state registration (including investment. registration of the firm name, state Investments made by foreigners shall —— sole entrepreneurs; registration of the company itself and not be nationalized or confiscated. —— business partnerships registration with the tax authorities). Seizure of property can be applied as (full partnerships and trust The required documents can be an exclusive measure if authorized partnerships); submitted either in hard copies or by a court and where a state of electronically. —— limited liability companies; emergency has been declared by the —— supplementary liability companies; The registration of commercial entities Government. is made immediately (if documents —— joint-stock companies (open and Seizure of property is subject to full are submitted electronically or closed); compensation. Foreign investors approved templates of the required —— cooperatives; are also entitled to compensation of documents are used) or within damages and losses (including lost —— branches. 2 working days (in other cases). profit) resulting from unlawful acts of State duty for the registration of a Representative offices of foreign state authorities or state officials or commercial legal entity is free of any companies can be established improper performance of their duties. in Armenia for the purposes of fee, for branch and representative representation and protection of the office is AMD 12,000 (approximately Goods (from the list established by the rights of its founding company but are USD 25). Government), which are imported by not entitled to perform commercial foreign investors with the purpose of activities. Foreign investment legislation paying up shares or the charter capital, are exempt from customs duties. However, if these goods are disposed The Law “On foreign investments” Incorporation of organizations within 3 years after their import, the sets forth the rights, guarantees and and sole entrepreneurs customs duties shall be paid. privileges for foreign investors, who Legal entities, their separate can make their investment in various subdivisions (branches and forms, such as a joint venture or the representative offices) and sole establishment of a wholly-owned entrepreneurs are subject to subsidiary.

Insurance of bank deposits The judicial system of the Taxation Overview2 Republic of Armenia The bank deposits of individuals are In general, the following state and insured in the Republic of Armenia. A three-tier judicial system currently municipal taxes are defined in the The limit of an insured deposit exists in Armenia: Republic of Armenia: amount in a bank is AMD 10 million I. First Instance Courts State taxes: Profit Tax, Income Tax, (approximately USD 20,000) for Excise Tax, Value Added Tax. deposits only in Armenian currency a. Courts of general jurisdiction and AMD 5 million (approximately (hearing civil and criminal cases); The law may specify turnover tax, USD 10,000) for deposits only in b. Administrative court (hearing presumptive payments or license foreign currency. claims against administrative fees as a replacement to the above bodies). mentioned taxes. Insurance II. Courts of Appeal Municipal taxes: a. Civil Court of Appeal; There is one type of mandatory Property Tax, Land Tax. b. Criminal Court of Appeal; insurance in Armenia: motor vehicle c. Administrative Court of Appeal. liability insurance. Other types of Profit Tax insurances are not mandatory. III. Cassation Court of the Republic Tax payers: Profit Tax in Armenia of Armenia Anti-money-laundering and is payable both by residents terrorism financing legislation In the field of constitutional justice (organizations established in the RA) the highest judicial power is the and non-residents (organizations Constitutional Court of the Republic created outside the RA and their Armenia has detailed regulations on of Armenia. subdivisions registered in Armenia). anti-money-laundering and to combat against terrorism financing. The Note: The judicial precedent is applied Taxable profit: Profit Tax is calculated Central Bank of Armenia exercises in Armenia. on the basis of the taxable profit supervision on compliance with the representing the positive difference legislation and imposes sanctions in Labor Market between the total income from the the field to combat money laundering sale of goods, services, assets and and terrorism financing. The Labor Code is the main Legal other property, less total expenses Act regulating employment relations which are deductible by law. Currency regulation in Armenia. The Code sets forth Profit tax rate: For residents and the main provisions related to registered non-residents the general As a general rule transactions in employment agreements, collective rate of Profit Tax is currently 20% Armenia have to be made in Armenian agreements, length of a working of the taxable profit. For investment drams. There are several cases day, rest time, duration of vacations, funds 0.01% is applied to the net (mainly, transactions between resident calculation of salaries and other assets of the fund. and non-resident legal entities and payments to employees, termination sole entrepreneurs) where use of of employment relations, duration and foreign currency is permitted. payment for special leave, etc. 2 Based on the legislation effective 1 March 2016 .

Reporting period: Taxpayers have to the reporting year. The reporting year The key Profit Tax implications for submit their Profit Tax return to their end is 31 December for all companies. resident and non-resident registered local tax authority before April 15 of When establishing the amount of entities are presented in the table the year following the reporting year. the Profit Tax liability, the income and below. The amount of the Profit Tax should expenditure are calculated on the be transferred to the State Budget not accruals basis. later than April 25 of the year following

Profit Tax Residents Non-residents registered in Armenia Tax object Taxable profit received on the territory of The taxable profit derived only from Armenian Armenia, as well as outside Armenia sources. Tax methodology The taxable profit is the positive The taxable profit can be established: difference between income recognized 1. as the positive difference between income for taxation purposes and allowances recognized for taxation purposes and established by law (expenses, losses, allowances established by law (expenses, other allowances). other allowances); or 2. using one of the indirect methods defined by legislation (proportion of revenue , proportion of expenses, proportion of number of staff of Armenian subdivision in overall revenue, expenses, number of staff of non-resident) Tax losses Tax losses that arose during the last 5 Losses are not deducted. years are deducted when calculating the taxable profit. Dividends Dividends received are deducted from Dividends received are taxed. received the gross income when calculating the taxable profit. Prepayments Prepayments are made on a quarterly Prepayments are made on a half-annual basis basis in the amount of the 18.75% of the in the amount of 1/4 of the previous year actual previous year actual Profit tax. Profit tax, if the previous year actual Profit tax exceeded AMD 2 mln (USD 4,000).

In case the non-resident company is not registered in Armenia, taxation of income derived from Armenian sources is performed by a tax agent at the following rates:

Type of Income Amount of the Profit Tax

Insurance compensation, reinsurance payments and income received from freight 5%

Dividends, interests, royalty, income from the lease of property, increase in the value of 10% property and other passive income (with the exception of the income received from the freight)

Income from other services provided by non-residents, as well as income from services 20% provided by non-residents to Armenian residents outside Armenia, which include consulting, legal, accounting, management services, expertise, marketing, advertising, translating, engineering and other similar services.

Double Taxation Treaties: Currently Value Added Tax VAT rate: The rate of VAT is 20 Armenia has signed Double Tax percent of taxable turnover. Treaties with the following countries: VAT payers: VAT payers are Privileges: The RA Law “On VAT” Austria, Belarus, Belgium, Bulgaria, individuals and legal entities that specifies the types of transactions Canada, China, Croatia, Cyprus, carry out economic (entrepreneurial) that are not taxable by VAT (these Czech Republic, Estonia, Finland, activities and perform the VAT taxable trans¬actions are out of the scope France, Georgia, Germany, Greece, transactions on the territory of the RA. of VAT), the types of activities that Hungary, India, Iran, Ireland, Italy, are exempt from VAT (insurance, Kazakhstan, Kuwait, Latvia, Lebanon, VAT taxable transactions: most banking and financial activities, Lithuania, Luxembourg, Moldova, the scientific and research works, sales Netherlands, Poland, Qatar, Romania, —— Delivery (supply) of goods for of newspapers and magazines, Russia, Spain, Switzerland, Syria, compensation; procurement and supply of goods Slovenia, Thailand, Turkmenistan, —— Rendering of services for any form and provision of services arising from Ukraine, the United Arab Emirates, of compensation; loans and grants made by international the United Kingdom and Northern organizations for the realization of Ireland. —— Free (partially free) delivery of goods or provision of services; programs in Armenia, etc.), as well as transactions for which zero rate —— Importation of goods under of VAT is applied. The zero rate of the “Release for domestic VAT is, in general, applied to the consumption” customs exportation of goods and services procedure.

(works) from the territory of Armenia. not exceeding AMD 115.0 million Income Tax The main difference between zero (approximately USD 230,000), with rating and exemption is that in the some exceptions. Tax payers: In Armenia Income Tax is case of exemption the VAT paid to the paid by RA resident and non-resident The taxable object: The taxable supplier is not compensated. individuals. object is the turnover of goods Reporting period: Every quarter (or delivered and services rendered for Residents are the persons who have every month, if the taxable turnover the reporting period and other income spent 183 days or more in Armenia of the previous year exceeded AMD received. For determining the taxable in any twelve month period starting 100mln (USD 200,000). VAT taxpayers object income is recognized by accrual or ending in a tax year, or whose are obliged to submit VAT reports to method. vital interests are located in the RA tax authorities and pay VAT by the (home, family, property and business), Turnover tax rates: The turnover tax 20th day of the month following the irrespective of the citizenship. rates are the following: reporting period. Tax object: For RA residents the tax Tax Invoices: VAT payers are obliged object is taxable income received in Armenia and outside of Armenia, to issue tax invoices for goods Type of Income Rate supplied and services rendered. non-residents will have an Income Tax invoices should be issued only Income from 5% Tax liability solely on income received electronically. commercial/trade from Armenian sources. activities E-Reporting: Starting from January Types of income which are subject to Income Tax: wages and salaries, 1, 2012 the companies and individual Income from operating 3.5% interest, income from donations entrepreneurs which by the results of activities the previous reporting year have VAT and assistance (unless specifically taxable turnover of more than AMD Rent income, interest, 10% exempt), royalties, rental income, 58.35 million (approximately USD royalties, income from benefits in kind, income from 116,000) must submit tax returns to sale of assets entrepreneurial activities received by soul entrepreneur, etc. the tax authority electronically. Income from notaries 20% activities For most of the employees their Turnover tax employer will withhold the income tax Income from other 5% and pay to the tax authorities as tax The turnover tax is a substitute of VAT activities agent. and profit tax for legal entities and VAT Until December 1, 2018 turnover tax for private entrepreneurs. Taxable income: The taxable income on income from sale of secondary raw is the positive difference between the Turnover tax payers: The turnover materials is calculated by the rate of gross income of the taxpayer and the tax is applicable for taxpayers with 1.5% on taxable base. deductions made in accordance with previous year revenues from the sale the provisions of the RA Law “On of goods and provision of services Income Tax”.

Income Tax rates: I. The Income Tax rates on wages and salaries are:

Monthly Taxable Income Income Tax Rate Up to AMD 120,000 24.4% From AMD 120,000 to AMD 2,000,000 AMD 29,280 + 26% of the amount exceeding AMD 120,000 Over AMD 2,000,000 AMD 518,080 + 36% of the amount exceeding AMD 2,000,000

II. The income tax rates on income not taxed by tax agent are:

Annual Taxable Income Income Tax Rate Up to AMD 1,440,000 24.4% Over AMD 1,440,000 AMD 351,360 + 26% of the amount exceeding AMD 1,440,000

III. Tax rates on some types of income received by foreign citizens are:

Type of Income Rate Dividends 0% Insurance reimbursements and income from transportation (freight) 5% Royalties, interests, lease payments, increase in the value of property and other passive income, as well 10% as other income received from Armenian sources

IV. Tax rates on passive income are:

Type of Income Rate Royalties, rental income, income from the sale of property, interest income (In case the annual income 10% received from rent exceeds AMD 58.35 mln. the individuals are subject to additional 10 % income tax on amount exceeding the threshold without considering any deductions, including taxes paid by the tax agent.)

Individual obligations of Income Other Issues - Mandatory However, currently there is maximum Tax reporting: The RA residents, per funded pension scheme threshold of basic salary established the results of the tax year, have an by Law for applying the social obligation of submitting electronically Starting from July 1, 2014, social payment rate. Thus up to 01 July 2020 the Income Calculation before April payments are due for employees the maximum monthly threshold 15 of the year following the reporting who were born on or after 1 January, of basic income is established year with the exception (in particular) 1974 (including foreign citizens), who AMD 500,000. This means that up of the following cases: receive basic income, i.e. who work to 01 July 2020 the monthly social in an Armenian incorporated company payments calculated on gross salary — When income received is taxed by — and receive income taxable by income exceeding AMD 500,000, shall be tax agents; tax are subject to social payment. AMD 25,000 (500,000x5%). When income received by the —— The base for calculation of the social individual, consisted exclusively of The Employer, as a tax agent, is payment is the basic income, which the non-taxable types of income obliged to withhold the amount of is salary and other payments equal (deductible income). social payment as well as submit thereto which are subject to taxation monthly personalized reports to the Income Tax reporting by tax agents: under the RA Law “On Income Tax.” tax authorities on calculated income, An income tax report is submitted by Currently the social payment rate amounts of tax and social payments tax agents (employers) electronically is 5% for gross salaries up to AMD withheld from individuals within the on a monthly basis. 500,000 and 10% on amounts terms established by the RA Law “On exceeding AMD 500,000. Income Tax”.

Tax Privileges for IT Companies Tax Privileges for Exporters If all above conditions are met: —— 5% favorable rate applies to Starting from 09.01.2015 Law Profit tax privileges the taxable profit, if the sum of “On State support” entered into Favorable profit tax rates are applied taxpayers revenue from provision force and according to law, startup to the taxable profit of resident of services abroad and custom companies can apply for privileges, taxpayers or group of involved value of exported goods for particularly, the companies, and in export programs approved by current year exceeds 40 billion Individual entrepreneurs, falling under Armenian Government. However AMD. the criteria of the Law, do not pay to benefit from favorable rate the corporate tax/profit tax on income —— 2% favorable rate applies to taxpayers should meet to certain related to IT activity, also the income the taxable profit, if the sum of conditions simultaneously: tax on these entities’ employees taxpayers revenue from provision of services abroad and custom salary is calculated at 10% rate. The —— The taxpayers should not be value of exported goods for privilege is effective only for the involved in mining or processing current year exceeds 50 billion period of certificate provided by RA of metallic minerals, processing AMD. Government. and/or selling of precious stones, precious metals and jewelry, Tax privileges are applicable to 5% favorable rate is applied to the producing or selling products companies for which the following taxable profit of taxpayers or group taxable by excise tax. criteria are met: of taxpayers involved in programs —— minimum 40 billion AMD has approved by Armenian Government, —— were created to implement only been entered into bank accounts if taxpayers or group of taxpayers activities provided by the law (in IT of taxpayers in the group from operate in the field of construction sector), export program or installation exclusively outside the —— were not created as a result of —— the taxpayers of the group does territory of the Republic of Armenia. reorganization of other entity, not have any income from sale of —— are not a subsidiary of another products, rendering of services Income tax privileges company, in Armenia, except for interest The tax agents, who signed a working —— number of employees does not income received from non- agreement with residents of RA and exceed 30. residents on loans provided. according to the agreement employee —— the sum of taxpayers revenue worked exclusively outside the from provision of services abroad territory of the Republic of Armenia, and custom value of exported within implementation of the program goods for current year exceeds according to Article 33 part 1.2 of RA 40 billion AMD. Moreover the Law on “Profit Tax” calculates income exports custom value for current tax from employees’ wages and equal year should exceed the threshold payments by the 13% rate. established by RA Government,

Eurasian Economic Union Accounting Requirements Where the company has a subsidiary, it should prepare consolidated On 02 January 2015 Republic of According to the Law of RA “On financial statements for the Group. Armenia became member of Eurasian Accounting”, all legal entities Directors of the company are Economic Union, towards which registered in Armenia, as well as responsible for preparing and signing legislation changes were initiated in branches and representative offices the financial statements. The financial Armenian custom and tax legislation. of foreign legal entities must carry statements are submitted to founders Eurasian Economic Union specifies out financial accounting and prepare or shareholders of the company and unified customs territory which general purpose financial statements. to appropriate state authorities (if such provides free movement of goods The Ministry of Finance adopted requirement is provided by founding within the Eurasian Economic Union, Accounting Standards of the Republic documents or by law) before 15 April thus: of Armenia (ASRA), which was based following the reporting year. —— Customs duties are not applicable on IFRS effective as of the end of All companies that have an annual upon movement of Eurasian 2000, with minor changes. However, turnover and/ all total assets over Economic Union goods between from 2009 the transition to IFRS was AMD 1 billion (USD 2,000,000) should the member states, initiated. Mandatory IFRS reporting for publish their financial statements banks started from January 2009, for —— Eurasian Economic Union goods before 1 July following the reporting other financial institutions including should be shipped between year. credit, insurance and investment Armenia and other member companies started from January 2010, Banks should publish their quarterly states without customs clearance for the remaining organizations with financial statement before the 15th formalities, revenue exceeding AMD 100 million of the month following the reporting —— Economic restrictions are not (approximately equivalent to USD period and their annual audited applicable. 200,000) started from January 2011. financial statements within six months following the reporting year.

Auditors, audit requirements “route taxis” in major cities and also purposes within Armenia total 7,568 and standards a metro in Yerevan. Road and railroad km and there are connections with communication exists between all the all neighboring states with which Audit of the annual financial major regions of Armenia. Armenia has diplomatic relations, including Georgia and Iran. statements carried out by an Two international airports are in independent audit company is operation: Zvartnots International The Armenian telecommunications mandatory for certain companies, Airport in Yerevan and Shirak airport in network is currently operated by three such as open joint-stock companies, Gyumri. The international terminal was mobile operators, ArmenTel (operating banks and financial institutions, built in accordance with the newest under the trade mark Beeline), which stock exchange participants, etc. international standards, with modern is fully owned by Russia’s VimpelCom, Audit companies are licensed by the equipment and with high earthquake K-Telecom (operating under the Ministry of Finance. In order to receive stability and was opened on 26 trademark VivaCell MTS), a subsidiary a license the audit firm should have September 2011. The airport is able to of Russia’s MTS, Ucom – local at least five qualified auditors, who accept any type of aircraft. company. obtain a professional qualification from the Ministry of Finance. Additionally, Several international airlines (such as Main competitors in 3G internet the signatory of audit opinions on the Aeroflot, Air France, Austrian Airlines, services in Armenia are Ucom, financial statements of commercial Siberia Airlines, LOT Polish Airlines, VivaCell MTS and Beeline. Armenia banks and other financial organizations FlyDubai, Qatar Airlines, Ukraine is also the 10th country in the regulated by the CBA is required to International Airlines, Air Arabia, world that launched the 4G Internet satisfy several additional professional Mahan Air (Iranian), Aegean Airways, communication network also requirements (e.g. to possess an Georgian Airways, Iraqi Airways, Al introduced by VivaCell MTS. Currently international known qualification on Naser, Middle East airways ) provide a one of the main DSL highline internet accountants and/or auditors), which number of flights to the largest cities suppliers in Armenia is Beeline. are determined by the decision of the in the CIS, Europe, USA, Asia and Optical fiber network suppliers Board of the Central Bank of the RA. Australia. Scheduled flights operate are Ucom telecom company and to Amsterdam, Athens, Beirut, Dubai, Rostelecom Armenia. Ucom has also Audits are performed in accordance Istanbul, Frankfurt, Kiev, London, built up the first FTTH (Fiber to the with auditing standards of the RA, Moscow, Munich, Paris, Prague, home) Network in Armenia. After approved by the Ministry of Finance, Rome, Tehran, Vienna, and other acquisition of Orange Armenia, Ucom which are based on International major cities in the world. is planning to launch a LTE network Standards on Auditing (ISA). There is across Armenia. The fiber-optic There are 703 km of railways of also a Law on Audit, which regulates cable (FOC) network of Rostelecom general purposes in Armenia. Of this field. Armenia now covers 80% of the the three international railroad territory of RA, spreading for over connections via Georgia, Azerbaijan 3,000km. Ucom and Rostelecom Infrastructure and Turkey, only the connection Armenia provide internet, IPTV through Georgia to the Black Sea and Digital Phone services to both Armenia has a relatively developed ports (mainly Poti and Batumi) is in individuals and corporate clients. public transportation system, which use at present. Highways of general includes buses, taxi services, vans or

Since 1 January 2006 the CBA has been acting as regulator and supervisor of the Armenian Financial Market, in addition to the banking sector. As of 30 June 2016, there were 20 commercial banks, which comprised about 90% of the financial sector. There are also credit organizations, insurance companies, insurance brokers, investment companies, investment and pension fund managers, NASDAQ OMX Armenia and the Armenian Central depositary, exchange offices and pawnshops etc. The CBA is actually located in 2 locations: in Yerevan and in Dilijan city (about 110 km from Yerevan). Based on the Government plans, Dilijan would become a financial center of Armenia.

Banking Sector Nagorno Karabakh, from which 232 figure makes the Armenian banking were located in Yerevan. The total system the biggest part of the number of employees in the Armenian Armenian financial market. The banking system remains the commercial banks was about 11,516. biggest part of the Armenian financial The total equity amounted to AMD market. As of 30 June 2016, there Total assets of the Armenian banking 587 billion and total liabilities were were 20 commercial banks operating system were about AMD 3,496 billion about AMD 2,908 billion including in the Republic of Armenia. They as at 30 June 2015 including total loan AMD 1,914 billion of total deposits. had 526 branches in Armenia and in portfolio of AMD 2,194 billion. This

Top Ten Banks of the Armenian Banking Sector as of 30 June 2016 (in million AMD)

550,000 14,000 500,000 12,000 450,000 400,000 10,000 350,000 300,000 8,000

250,000 6,000 200,000 4,000

150,000 tal Income (right axis)

100,000 To 2,000 50,000 0 0 Ameria ASHIBVTB ABBHSBCACBAInecoConverseUnibank Ararat

Assets Loans Deposits Equity Total Income (right axis) Net Proﬁt (right axis)

Source: Published interim financial reports of commercial banks for nd2 quarter (unaudited)

The shareholder structure of the are mainly from Russia, Switzerland, Due to the above changes there has Armenian banks is very different. Iran, Lebanon, Liechtenstein, been several developments in the There are both resident and non- France, United Kingdom, USA sector. For more details on banking resident shareholders. Meanwhile, and Kazakhstan. There are several sector you can refer to “Armenian almost in all the Armenian banks international organizations that have Banking Sector Overview” non-resident shareholders are shares in several Armenian banks (e.g. (www.kpmg.am). presented. Non-resident participants, IFC, DEG, EBRD, and OPEC fund for both legal entities and individuals, International development).

Capital market of the NASDAQ OMX Group, Inc. complying with the Central Bank and is the 100% owner of “Central of Armenia and NASDAQ OMX Depository of Armenia” OJSC. Armenia requirements. Currently all Currently the only stock exchange the commercial banks, 5 investment Membership in NASDAQ OMX operating in Armenia is “NASDAQ companies and the Central Bank of Armenia is open to all companies, OMX Armenia” open joint stock Armenia participate in the exchange company (NOA). The company is part providing investment services and trading.

In January 22, 2016 Fitch Ratings has affirmed Armenia’s long-term foreign and local currency Issuer Default Ratings at ‘B+’ with a Stable Outlook. As at 15 January 2015 Armenia’s government bond rating according to Moody’s rating agency is Ba3 (negative outlook).

Based on the Doing Business 2016 prepared by IFC (the WB Group) Armenia was ranked 35 out of 189 economies improving its position by 3 places compared with 2015 ranking3.

3 http://www.doingbusiness.org/data/ exploreeconomies/armenia

Armenia is a member of many international organizations including: ——IMF ——ESCAP ——World Bank, IDA, ——WCO ——EBRD ——ICAO ——BSEC ——IFAD ——WTO ——ILO ——UN, UNCTAD, UNESCO, UNIDO, ——INTELSAT UNECE, UNICEF ——IOC ——CIS ——ITU ——WIPO ——ISO ——INTERPOL ——MIGA ——IAEA ——OSCE ——CCC ——Council of Europe ——OECD ——EurAsEC ——TRACECA ——ADB ——CSTO ——EEU (EURASIAN ECONOMIC UNION ——WHO ——EC

ADB Asian Development Bank AMD Armenian Dram ASRA Accounting standards of the Republic of Armenia BSEC Black Sea Economic Cooperation CBA The Central Bank of Armenia CCC Customs Cooperation Council CIS Commonwealth of Independent States CSTO Collective Security Treaty Organization DEG German Investment and Development Corporation DSL Digital subscriber line EBRD European Bank for Reconstruction and Development EC European Commission EEU Eurasian Economic Union ESCAP Economic and Social Commission for Asia and the Pacific EurAsEC Eurasian Economic Community FDI Foreign Direct Investment FEZ Free Economic Zone FTTH Fiber to the home GDP Gross Domestic Product GSP+ Generalized System of Preference GTC Gyumri Technological Center IAEA International Atomic Energy Agency ICAO International Civil Aviation Organization ICT Information and Communication Technologies IDA International Development Association IFAD International Fund for Agricultural Development

IFC International Financial Cooperation IFRS International Financial Reporting Standards ILO International Labour Organization IMF International Monetary Fund INTELSAT International Telecommunications Satellite Organization INTERPOL International Criminal Police Organization IOC International Olympic Committee ADB Asian Development Bank IPTV Internet Protocol television AMD Armenian Dram ISA International Standards on Auditing ASRA Accounting standards of the Republic of Armenia ISO International Organization for Standardization BSEC Black Sea Economic Cooperation IT Information Technology CBA The Central Bank of Armenia ITU International Telecommunications Union CCC Customs Cooperation Council MIGA Multilateral Investments Guarantee Agency CIS Commonwealth of Independent States NSS RA National Statistics Service CSTO Collective Security Treaty Organization OECD Organisation for Economic Co-operation and Development DEG German Investment and Development Corporation OSCE Organization for Security and Co-operation in Europe DSL Digital subscriber line RA Republic of Armenia EBRD European Bank for Reconstruction and Development R&D Research and development EC European Commission TRACECA Transport Corridor Europe-Caucasus-Asia EEU Eurasian Economic Union UAE United Arab Emirates ESCAP Economic and Social Commission for Asia and the Pacific UNECE United Nations Economic Commission for Europe EurAsEC Eurasian Economic Community UNESCO United Nations Educational, Scientific and Cultural Organization FDI Foreign Direct Investment UNCTAD United Nations Conference on Trade and Development FEZ Free Economic Zone UNIDO United Nations Industrial Development Organization FTTH Fiber to the home USA United States of America GDP Gross Domestic Product USD United States Dollar GSP+ Generalized System of Preference VAT Value Added Tax GTC Gyumri Technological Center WB World Bank IAEA International Atomic Energy Agency WCO World Customs Organization ICAO International Civil Aviation Organization WHO World Health Organization ICT Information and Communication Technologies WIPO World Intellectual Property Organization IDA International Development Association WTO World Trade OrganAization IFAD International Fund for Agricultural Development The Government The Government of the Republic of Armenia

Tigran Gasparyan Vahagn Lalayan Bagrat Yengibaryan Managing Partner Head of Investment Policy Director E: [email protected] Department E: [email protected] E: [email protected] Zaruhi Furunjyan Enterprise Incubator Foundation Senior Manager Ministry of Economic 123 Hovsep Emin Str. Yerevan E: [email protected] Development and Investments 0051, Armenia Republic of Armenia T: +(374 10) 219-797 KPMG in Armenia 5 M. Mkrtchian, Yerevan 8th floor, Erebuni Plaza Business 0010, Armenia www.eif.am Center, 26/1 Vazgen Sargsyan T: +374 (11) 597 125 Street, Yerevan, 0010, Armenia www.mineconomy.am Т.: +374(10) 566 762 E: [email protected]

www.kpmg.am

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2016 KPMG Armenia cjsc, a company incorporated under the Laws of the Republic of Armenia, a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Armenia. The KPMG name and logo are registered trademarks or trademarks of KPMG International.