Relocants have tasted Armenia – Kommersant FM
[ad_1]
Russians transferred more than $2 billion to Armenia. Such data for eight months of 2023 is provided by the S&P rating agency. Although the country most often acts as a transit point for this money, it still supports local banks, analysts concluded. Russian entrepreneurs began to actively relocate businesses or open new companies in Armenia in 2022. According to the consultants with whom Kommersant FM spoke, the majority were able to gain a foothold in the country, mainly in the IT sector. What strategy does the company follow? And what difficulties did they face? Elena Ivanova found out.
In 2022, foreign direct investment in Armenia reached $1 billion, which authorities called a historic level. At the same time, the country’s GDP grew by 12% instead of the expected 7%. Analysts mainly attributed this to the influx of capital from Russia. Some moved their business on emotions and returned home literally a few months later. More than 70% of entrepreneurs have settled in the IT sector, relocation consultants told Kommersant FM. Although only a few staff were transported to the country, noted the founder of the Khachen company, Armen Minasyan:
“The majority, after all, when opening a business, hired a local director and accountant, and the bulk of the employees moved on to other countries. I provide external operational management and accounting services, and since clients contact me, it means that they are more comfortable that those tasks that can be outsourced are performed in this way.”
The main problem that almost all entrepreneurs face is the modest size of the market. This is especially true for those who were going to provide services to local companies and citizens. The population of Armenia is four times smaller than the population of Moscow. The event agency Creative Structure hoped to work in Armenia with Western businesses that had left Russia. However, there were difficulties with this. As a result, by the end of 2023, the business had practically left the country and was looking for other markets. And an Armenian legal entity can help in this case, noted Creative Structure founder Arkady Sergeev:
“Because the population density is low, marketing budgets are much lower than they were in Russia. Through Armenia, we considered entering other markets, including the USA and European countries.”
The founder of the ODD Fashioned bar in Yerevan, Vyacheslav Lankin, says that it is mainly the locals who succeed in attracting interest, but attracting the local public is quite difficult: “You always need to understand the local mentality. The tracing papers that we simply transfer from Russia do not work very well. We hoped for one thing, we did it, then we worked for six months, and we had to change our point of view and style of conducting it. In principle, now, as in the beginning, we work more for relocants than for the local population. Here everyone knows each other and goes to their friends, but it takes time to become one of your own.”
According to businessmen, the easiest thing was to open a legal entity and a bank account, as well as obtain the necessary documents. Local credit institutions have tightened their compliance procedures mainly for individuals. The companies managed to avoid any special difficulties, and questions arise only for those who have not had any movement on their accounts for a long time. But finding the premises or contractors needed for a business is not always easy, continues Vyacheslav Lankin: “There are a lot of empty premises, but finding them is quite difficult.
The real estate market is still in a slightly deplorable state. Locals simply don’t understand what kind of premises you need – for a bar, a disco or a cafe.
They offer everything. The situation is better in residential areas, but there are still problems with commercial real estate. We have been looking for premises for six months to launch our second project.”
As S&P predicts, the Armenian economy will grow by 7.5% by the end of 2023. In 2024, the trend will continue, and the increase in GDP will be 4.5%. Unless, of course, geopolitics intervenes in the situation.
Everything is clear with us – Telegram channel “Kommersant FM”.
[ad_2]
Source link
