Ever since its independence in 1991, when it emerged as a pre-eminent reformer among the former Soviet republics, Armenia has been characterised by forward-thinking economic policies. Today, the Caucasian nation is picking up the pace, and investors from the Middle East are taking note.

“We have no choice but to rush to be competitive, which entails improving the business environment in terms of cleaning market entrance barriers, improving taxation, trading across borders and other issues,” says Armenian Finance Minister Vardan Aramyan.

Among recent improvements have been an up to three-year grace period for VAT on goods and equipment imports and tax breaks on profits for projects that create jobs.

Due to its lack of red tape and streamlined procedures, the 2018 World Bank Doing Business Report ranked Armenia as the 15th best country in the world for starting a business and the 13th best for registering a property. Additionally, the country guarantees no changes to legislation on investments for a five-year period – a promise of stability that is hard to find elsewhere in the region.

In 2011, Armenia also passed ground-breaking Free Economic Zone (FEZ) legislation, which offers investors in determined areas further financial benefits including income tax, VAT, and revenue tax exemptions. Three are already operational, including a recently-opened FEZ on the Iranian border in Meghri. In February, the country’s deputy minister of economic development announced in Parliament that two more FEZs– focusing on technology and logistics – are also in the works.

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Armenian President Serzh Sargsyan notes that Armenia emerged from the global financial crisis with a restructured economy. “We wanted to give impetus to export-oriented sectors of the economy,” he explains. To this end, the country has developed a vast web of trade deals, providing access to 800 million consumers across Europe, the Middle East and Asia.

In recent months, Armenia has become something of a safe bet for Gulf-based investors, as demonstrated by the success of the Armenia-UAE Investment Forum held last year, which brought together around three hundred participants. Indeed, investors eyeing the country are almost spoilt for choice, with projects ranging from retail to agriculture, healthcare, tourism and energy. It is in the latter that Gulf-based investors have made their biggest mark yet, with the signing last year of a $100 million memorandum of understanding by UAE-based Ocean Holding LLC for the construction of what will be the country’s largest solar power plants.