The Armenian government inaugurated on Friday a free economic zone on Armenia’s border with Iran, saying that it will attract more foreign investment in the domestic economy and expand commercial ties with the Islamic Republic.
Businesses operating in the zone close to the southeastern Armenian town of Meghri will be exempt from virtually all types of taxes. They will be allowed to engage in not only manufacturing but also trade, cargo transport and even tourism.
Speaking at the opening ceremony, Prime Minister Karen Karapetian indicated that his government expects the tax haven to attract Iranian companies seeking to capitalize on Armenia’s tariff-access to Russia’s market and privileged trade regime with the European Union. It will also allow other foreign investors to do business with Iran, he said.
“I am sure that the free economic zone has very good prospects,” Karapetian told reporters. “But this is just the beginning. We must now work hard every day,” he added.
Minister for Economic Development Suren Karayan, who also attended the ceremony, said the government anticipates that between 50 and 70 firms will set up shop in the tax haven in the coming years. He said their combined output should increase Armenia’s exports by around $250 million annually.
Vahe Hakobian, the governor of the Syunik province encompassing the border area, estimated that this should translate into 2,000 new jobs. “That will definitely be an addition boost for the socioeconomic development of our region,” he said.
Hakobian also told journalists that businesspeople from Georgia, Ukraine and Belarus have already expressed readiness to invest in the Meghri zone. And a large delegation of Iranian government officials and entrepreneurs will arrive in the provincial capital Kapan on Wednesday, he added.
A separate statement released by Karapetian’s press office said that the business zone will be expanded by 70 hectares in the next few years.
The Armenian premier discussed the upcoming launch of the zone with Iranian officials during an official visit to Tehran in October. He called on Iranian firms to set up branches there.
Economic issues were also high on the agenda of Iranian Foreign Minister Mohammad Javad Zarif’s November 28 trip to Yerevan. Zarif arrived with a large group of Iranian businessmen who held a one-day conference with fellow entrepreneurs from Armenia.
“There are quite good opportunities for expanding economic relations between the two countries,” Zarif said after talks with his Armenian counterpart Edward Nalbandian.
According to official Armenian statistics, Armenian-Iranian trade stood at a relatively modest $211 million in the first ten months of this year. Iran accounted for less than 5 percent of Armenia’s overall foreign trade.