The client
A solo founder running a B2B SaaS for HR teams — automated onboarding workflows. Two years in, ~$240K ARR with 11 paying customers (mostly EU mid-market). Tech stack runs in AWS Frankfurt. The founder is a Russian citizen who relocated to Cyprus during the war and was operating through a Cyprus IBC.
The problem
The Cyprus structure had three issues:
- Effective tax was ~24% — 12.5% Cypriot corporate tax plus 17% personal dividend tax (with the 80% IP-box dropping it slightly, but most software didn't qualify).
- Cyprus banks were unstable for Russian-passport holders. The founder's existing account was at risk of being closed, and new accounts were nearly impossible to open.
- No residency permit. Cyprus residency requires significant local investment or employment — neither fit a remote SaaS founder.
The recommendation
Armenia's Simplified (Turnover Tax) Regime at 1% on revenue for qualifying IT activity. With $240K ARR, the founder was well within the AMD 115M (~$291K) cap, and SaaS subscriptions clearly qualify as "high-tech" under the Armenian Tax Code's IT certification framework.
Crucial detail: the regime had to be elected within 20 days of company registration. Miss the deadline and the founder would default to 18% corporate income tax + 20% VAT for the entire year. We worked backwards from this constraint.
What we did
- Day 1 — scoping call. Confirmed the SaaS qualified as IT activity. Mapped the migration: dissolve Cyprus IBC after Armenian entity is operational; transfer customer contracts via novation; keep the AWS infrastructure under the new Armenian entity.
- Day 2 — documents prepared. Charter, founder's resolution, registration application, tax-regime election form. All in Armenian + English. Founder signed remotely via apostille.
- Day 3 — state registration. Filed with the State Register of Legal Entities. LLC live the same afternoon. Tax ID issued automatically.
- Day 4 — Simplified Regime elected. Filed the election form well within the 20-day window. IT activity certification confirmed by the State Revenue Committee.
- Day 5 — bank account + first invoice. Founder flew to Yerevan for one day, opened an Ameriabank corporate account in person (we'd done the pre-vetting), and issued the first invoice from the new entity that evening.
- Week 2 — residency application. Filed the business-residency application with the State Migration Service. Permit granted 4 weeks later — 3-year residency tied to the new company.
- Month 4 — Cyprus IBC dissolved. Once all customer contracts had migrated and the final Cypriot tax filing was clean, we wound down the IBC formally.
The outcome
On $240K of annual revenue, the new effective tax burden is roughly $2,400 — vs ~$57,000 under the prior structure when accounting for both Cypriot corporate tax and personal dividend tax. That's $30K+ kept in the business every year, reinvested in product and hiring.
The 3-year residency permit means the founder no longer needs to renew Schengen visas to travel into the EU — Armenia has visa-free entry to most key markets. The Ameriabank corporate account has been stable through 18 months of geopolitical turbulence, with multi-currency support (AMD, USD, EUR, RUB).
What we'd do again
Start from the 20-day deadline and work backwards. Every step in the timeline above was scheduled around making sure the Simplified Regime election landed inside the window. If you don't, you forfeit the entire year of 1% rates — there is no retroactive election.
“I wish I'd done this 18 months earlier. The whole thing took less time than getting a Cypriot bank to confirm a wire transfer.”