Non-resident foreign firms can act as general contractors in Armenia without a construction licence
A non-resident foreign company can now act as general contractor on a construction project in Armenia without an Armenian construction licence, provided it only plans, organises and coordinates the works. The licensed works themselves are carried out by subcontractors holding a valid licence.
The government adopted Decision No. 1617-N on 5 November, and it entered into force the day after publication. The decision extends the list of works that do not require a licence (No. 1615-N of 2023) and amends the procedure for issuing construction permits (No. 596-N of 2015). It was drafted by the Urban Development Committee and presented by the committee’s chairman, Yeghiazar Vardanyan.
Who the exemption covers
Only a non-resident within the meaning of Article 22 of the Tax Code that has no foreign licence or other document on the basis of which it could obtain the right to work in Armenia under Article 7 of the Law on Licensing. If the company has such a document but has simply not applied for its recognition, the exemption does not apply. Armenian companies work under the general rules.
What a general contractor without a licence can do
- Plan, organise and coordinate the works: sequencing, links between work sections and the schedule.
- Sign the contract with the developer and be responsible for the full set of as-built documentation.
What a general contractor without a licence cannot do: carry out licensed works with its own resources. These are performed by subcontractors holding a licence of the required class and an insert for the relevant sub-type of works. The licence must remain valid for the entire duration of the works. If the general contractor later obtains the right to perform such works, it may carry them out itself, but only within the scope of that right.
What changes in the paperwork
- In permit and notification forms, the general contractor’s licence number is replaced with the entry “not required – clause 12.1 of the annex to Decision No. 1615-N”.
- A list of those performing licensed works is attached to the certificate: name, types of works, licence and insert details.
- The general contractor attaches its certificate of registration abroad and a written statement that it holds no foreign licence.
- The general contractor compiles the as-built documentation and hands it over to the developer, while the performers sign their part. If documents are missing, the general contractor is obliged to restore them.
- Both the general contractor and the subcontractors sit on the acceptance commission. The general contractor does not replace the actual performers.
The absence of a licence does not release either the general contractor or the subcontractors from their duties and liability under the law and contracts.
Who it affects
- Foreign engineering and construction companies that manage large projects.
- Developers and clients: they gain a legal “foreign general contractor plus Armenian subcontractors” model.
- Licensed Armenian contractors: they are needed as subcontractors.
What to do
- Developers should check the status of a foreign partner: whether it is a non-resident and whether it holds a foreign licence.
- Compile a list of subcontractors with valid licences and inserts right away.
- Set out in the contract with the general contractor how as-built documentation is compiled and restored.
Sources: Decision No. 1617-N (PDF, e-gov.am) · Decision page · Justification (5 November agenda, item 39)
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