This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 11/2/2017


Unit: Thousand U.S. Dollars





2017 (Estimated)

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Data Sources: National Statistic Service: Yearbook 2016, Social Economic Situation in Armenia 2015-2016 and Central Bank of Armenia

Armenia has maintained its competitive advantage in technology development as a known hub for software development, industrial computing, electronics, and production of semiconductors. The sector has remained significant in the Armenian economy due to a competitive labor force, its share of GDP, constant growth in the number of companies, and total turnover.  According to Armenian National Statistics Service the Information and Communication Technology (ICT) Sector in 2016 grew only by 0.2%. However, the IT industry grew by 38.2% from the previous year and the volume was $12.9 million in 2016.

According to data by the the Enterprise Incubator Foundation (EIF) 2015 report, about 450 ICT companies operate in Armenia, growing at an average annual rate of 10%. The majority, about 88%, of these companies are Yerevan-based. However, the number of companies operating in other regions of Armenia is growing due to the development of educational and scientific infrastructure, particularly in Gyumri and Vandazor, respectively the second and third largest cities. In 2015, 70 new companies were established, creating nearly 400 new jobs. Armenian ICT companies specialize in embedded software development and semiconductor design, customized software and outsourcing, financial software, multimedia, web design, information systems, and system integration. Armenia has made significant gains in semiconductor design, which are registered as Intellectual Property.

Around 162 companies with foreign ownership operate in Armenia, constituting about 36% of the industry total. In 2005, these companies represented only 25% of Armenian ICT companies. U.S. companies constitute the majority of foreign companies (44%) operating in Armenia. European companies, or companies with a European share, make up 35% of companies with foreign ownership.

The workforce is one of the most important competitive advantages of the Armenian ICT sector. The relatively low cost combined with high levels of productivity of Armenian IT specialists make Armenia attractive to foreign investors. In 2015, the share of the workforce employed in the IT sector grew about 10%, reaching 12,685, which is around 2.3% of the total employment in Armenia. The number of technical specialists such as software engineers, analysts, developers, IT project managers, and others reached 10,250. Altogether, including support staff, employment in the sector has reached about 15,000. The ICT sector creates up to 1700 jobs for technical specialists annually. However, Armenian universities graduate 2,000 IT and high-tech specialists each year.

Leading Sub-Sectors

The industry’s domestic turnover volumes have increased significantly during the last five years. The reason is the growing demand for IT sector services in other industries. There is a growing demand for IT services in the domestic market; however, this is a slow process due to a number of factors, including low margins, low wages as well as low demand for productivity enhancement tools, financial constraints, high software piracy rates, and other factors. The majority of software packages sold on the domestic market include accounting and financial software for large enterprises and banks. Other products and services with the largest demand were enterprise resource planning solutions, e-commerce, web development services, tools for the healthcare industry, and distance learning programs.

In 2014, the Armenian government adopted a bill providing tax privileges for new IT companies until 2020. The bill gives newly established IT companies a 10 percent income tax break and exempts them from profit tax. These incentives are offered to new companies with fewer than 15 employees and for a period of three years or less. Individual entrepreneur startups are fully exempt from income tax. A five-member certifying commission determines eligibility for the tax privileges.

Several large-scale projects have been carried out with multinational IT companies to promote innovative ideas in the ICT field, increase access to venture funding and investment, and improve training for technical personnel.  The projects involved collaboration between the government, educational institutions, international donors, and multinationals companies such as “Microsoft”, “D-Link”, “National Instruments”, “Synopsys”, “Mentor Graphics”, “Nokia”, “Intel”, “Cisco”, “IBM”, “GFI”, ORACLE, VMWare and others.

In November 2014, Cisco Systems acquired Memoir Systems Armenian Company and are planning to open an office in Armenia. The acquisition will enable the company to increase manufacturing of affordable and high-speed memory for existing ASIC-Cisco switches and circuits.

On June 20, 2014, U.S. based multinational computer technology company Oracle announced that it signed an agreement to acquire LiveLOOK to strengthen Oracle Service Cloud with leading co-browse functionality to improve customer experiences through connected real-time engagements. Following the acquisition, Oracle announced it planned to keep the LiveLOOK office in Yerevan and grow it into a 200-300 person R&D center.

The PicsArt mobile photo editing application, developed in Armenia, was included in Forbes Magazine's 2015 Hottest Startup list, ranking fifth in the standings. The estimated valuation of the startup is 250 million USD. At the same time, Google Play recognized the application as one of 2015's best applications. PicsArt is an American brand, designed by Silicon Valley-based company Open Soft Consult, but the programming and marketing are carried out in Yerevan.

Shadowmatic, an iOS application developed by Yerevan-based Triada Studio, won the prestigious Apple Design Award during Apple’s World Wide Developers Conference in San Francisco in June 2015. Triada Studio is a computer graphics and animation studio with over 20 years of industry experience. Shadowmatic is the company’s first project that bridges its vast computer graphics experience with an experimental in-house 3D engine.


There is an increased demand for IT services in the domestic market, however the small size of the domestic market, low wages, low demand for productivity enhancement tools, financial constraints, high software piracy rates, and other factors make growth in this sector a slow process. Relatively small domestic demand creates insufficient inducement for companies to develop software packages or offer new and quality services domestically.  However there are opportunities for selling standard software packages in the domestic market including accounting and financial software for large enterprises and banks. Other products and services with the largest demand are enterprise resource planning solutions, e-commerce, web development services and tools for the healthcare industry.

Armenia is a favorable country for foreign direct investments in ICT. It offers the following competitive advantages relative to other countries of the region:

  • World-class R&D capabilities in engineering, computer science, physics, and mathematics;

  • Well-educated and talented workforce with technical skills and English language proficiency;

  • Strong university programs with specializations in IT and related sciences;

  • Highly competitive cost of labor and low operating costs;

  • Solid government support to the sector and commitment to improve the investment climate;

  • Sustainable and continuous growth of the IT sector;

  • Extensive experience with large multinational companies;

The Armenian government has actively supported Armenia's growing IT industry. With the support of the World Bank, the Ministry of Economy established the Enterprise Incubator Foundation (EIF) to improve the competitiveness of Armenian IT firms in the global marketplace and to assist Armenian firms in attracting investors. 

Web Resources

Enterprise Incubator Foundation
Armenian ICT Sector 2015 Report
Guide to Armenian Information Technology Companies
Ministry of Economic Development and Investments of the Republic of Armenia
Gyumri Technological Center Establishment Program
Vanadzor Technological Center Establishment Program
Armenian-Indian Center for Excellence in ICT
Microsoft Innovation Center
Armenian National Engineering Laboratories (ANEL)
IBM Innovative Solutions and Technologies Center
Digitec Expo

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Armenia Information and Communication Technology Trade Development and Promotion