The government has announced plans to set up a free economic zone in Gyumri, a move welcomed by the mayor of Armenia’s second largest city.
Under a bill approved by Prime Minister Nikol Pashinian’s cabinet on Thursday, the tax-free zone would occupy more than 300 hectares of land adjacent to Gyumri’s international airport.
“The free economic zone is expected to become an important hub for logistical services provided in electronic commerce,” said Economy Minister Tigran Khachatrian. It is primarily designed to accommodate warehouses used for international e-commerce and foster “export-oriented manufacturing activities,” he added during a cabinet meeting.
Gyumri Mayor Samvel Balasanian has for years lobbied for such a measure. He stressed on Friday the tax haven’s economic significance for a city that has long been suffering from high poverty and unemployment rates.
“We are going to have new jobs and there will be lots of investments,” Balasanian said at a meeting with Armenia’s ambassadors abroad accompanied by Foreign Minister Zohrab Mnatsakanian and Minister for Local Government Suren Papikian.
A government statement on the bill spoke of thousands of jobs to be created in Gyumri in the coming years
Armenia already has two free economic zones where companies meeting certain conditions are exempt from virtually all taxes. One of them was set up near Meghri, a small town on the country’s border with Iran, in late 2017.
The Meghri zone has attracted few Armenian, Iranian or other firms so far. The Armenian government blames this fact on former government officials and their cronies who it says had privatized land plots in and around the zone at disproportionately low prices and are now obstructing economic activity there. In Papikian’s words, the government has asked to courts to declare those privatization deals illegal.