1. Armenian Development Agency 2007

2. Core Themes  Macroeconomic Situation  FDI Trends  Export Growth and Structure  Business Environment and Benefits of Investing in Armenia  Priority Sectors of the Armenian Economy  The Role of the ADA in Investment Generation and Export Promotion Armenian Development Agency

3. GDP Growth Rate (%) Armenian Development Agency

4. GDP Structure in 2006 Armenian Development Agency

5. Exchange Rate and Inflation Armenian Development Agency

6. FDI Trends (USD mln): Key FDI Sectors Armenian Development Agency

7. FDI Trends in Armenia by Countries

8. Telecommunication Mining Foods and ProductionComputer and Related Activities FDI Trends (USD mln): Key FDI Sectors

9. Growth of Armenian Exports (%) Annual Growth in Percents Armenian Development Agency

10. Annual Export Growth though the years compared to 2001 Export Growth Rate

11. Main Export Products (%) Armenian Development Agency

12. Main Export Countries (%) Armenian Development Agency

13. ARMENIA - GREECE 2001-2006 FOREIGN TRADE TURNOVER (THOUSANDS $US) Armenian Development Agency Year ExportImportTotal 20012028.913578.115607 20021170.212185.913356.1 20035218.130414.935633 2004828.632074.332902.9 2005814.837952.038766.8 2006645.680620.381265.9 TOTAL10706.2206825.5217531.7

14. ARMENIA – GREECE 2006 FOREIGN TRADE TURNOVER BY KIND OF COMMODITIES (THOUSANDS $US) KIND OF COMMODITIESEXPORTIMPORT Beverages, spirits and vinegar58.610.4 Tobacco and materials instead of tobacco0.05293.3 Electrical machinery and equipment 366.510066.5 Essential oils and resinoids; perfumery, cosmetics0.0397.5 Plastic and articles thereof0.0684.5 Articles of leather, saddlery; harness; trave0.0316.8 Printed books, newspapers, pictures and other products0.51147.6 Old clothing and other textile articles; rags82.335.7 Articles of iron and steel01611.3 Tools, implements, cutlery, spoons, forks of bas metals 7.3199.7 Other articles212713.3 TOTAL (THOUSANDS $US)3041.95161 Armenian Development Agency

15. Market Gateway  Tariff Free Access to CIS: Market of 250 Million Consumers  Cultural and Commercial Partnership with Russia  Access to Middle East Market Armenian Development Agency

16. W W W. H E R I T A G E. O R G / I N D E X Country200120022003200420052006 Armenia684544 4227 Azerbaijan139118104106103123 Georgia1141081139110068 France39454044 Hungary423244423540 Russia127131135114124122 Turkey6310511910611285 USA54610129 Index of Economic Freedom Armenian Development Agency

17. Investment Incentives  Well Located for Access to CIS and Middle East Markets  Cost Effective and Qualified Work Force  Tax Incentives for Investors  Free Repatriation of Profit  No Limitations on Wire Transfers  Favorable Investment Legislation  Liberal Trade Policy  No Restrictions on Foreign Investor Ownership  Armenia is a Member of WTO Armenian Development Agency

18. Labor Force of Armenia  The majority of people in Armenia are between the ages of 17 and 59  More than 60 universities with more than 77,000 students  8 foreign universities operate in Armenia including: American University of Armenia; French University; European University.  More than 96 R&D institutes and research units  Literacy rate is 99% Armenian Development Agency

19. Labor Force of Armenia Armenian Development Agency

20. Taxation in Armenia  Profit Tax Rate is 20 %  Value Added Tax is 20 %  Top Income Tax Rate is also 20% Armenian Development Agency

21. Customs Regulations of Armenia  All exports from Armenia are duty free  The import tariff rates are 0 or 10 percent. The ten percent tariff is levied mainly on consumer and luxury goods.  Armenia is a member of World Trade Organization  Armenia uses the Harmonized Code System for tariff classification.  Import of some products for production is exempt from import duties. Armenian Development Agency

22. Investment Protection  Foreign investments are protected by Law  Grand-fathering Clause for 5 Years  Foreign investments in Armenia cannot be nationalized or confiscated  No limitations on wire transfers  MIGA offers an additional political risk insurance program Armenian Development Agency

23. Priority Sectors  Information Technology  Precision Engineering  Electronics  Fine Chemicals  Pharmaceutical and Biotechnology  Jewelry / Precious and Semi-Precious Stones Processing  Tourism  Food Processing  Textile, Clothing Armenian Development Agency

24. IT Industry in Armenia Software sector share in GDP

25. Labor force of 5,000 experienced graduates 400 graduates per annum with specialized chemistry qualifications Free access to CIS market More than 30 R&D Institutes Chemicals and Pharmaceuticals Armenian Development Agency

26. About Fine Chemicals Market The finechemicalsmarket.com portal is a sales point for fine chemicals manufactured by major Armenian chemical enterprises and laboratories. It offers over 5,000 chemical products. Armenia’s fine chemicals are used in major scientific, biomedical and manufacturing applications. Finechemicalsmarket was established to provide a service to increase the efficiency and ease of trading with Armenian enterprises. The development of the finechemicalsmarket portal is supported by the Armenian Development Agency of the Government of Armenia. Created by admin Last modified 2005-01-25 03:23 AM Amines & Derivatives Amino Acids & Derivatives Peptides Heterocycles Furan, Pyran and its derivatives Esters Bioactive & Natural Compounds Physiological Active Compounds Polyhedric Systems Quinozolines Screening,Synthesis of Biologically Active Compounds Proteins & Ferments Agrochemicals Speciality Chemicals Inorganic & Organic Reagents Electrophoresis Reagents Molecular Biology Reagents Miscellaneous Oils Pharmaceutical Forms Pharmaceutical Substances Fine Chemicals www.finechemicalsmarket.com

27.  Number of companies30  Number of employees1,700, of which 70% are skilled and 26% semi-skilled  At Peak Sector output Number of employees In 1980-90s the sector was supplying almost 30% of the computer-related equipment for the Soviet defense and space industries 14,600  The major specialization of the sectorIndustrial automation  Average monthly labor cost$ 60  Exports73% of total sales  Export markets Mainly Russia, other CIS countries, Iran, Middle East, USA.  Cost efficiencies The average annual savings on the yearly salary bill for a 150 person production or R&D operation in the sector, compared to leading recipients of foreign investment in Central Europe (Hungary, the Czech Republic) will be in excess of $1.5 million. Electronics Sector

28. Crops and Fruits Flourish under Natural Conditions Conditions Clean Ecological Environment Clean Ecological Environment - Premium Quality Products - Premium Quality Products World Class Companies already Capitalizing World Class Companies already Capitalizing on Investment Opportunities on Investment Opportunities More than 80% Exported to CIS Countries More than 80% Exported to CIS Countries Agri-Food Business / Key Benefits Armenian Development Agency

29. Main Agro Product Exports From Armenia 2005 (%) Armenian Development Agency

30. Jewelry and Diamond Processing Sector Long Tradition of Innovation and Creativity Approximately 15% of Armenian Exports are Cut Diamonds Cost Effective Qualified Jewelers Jewelry sector is exempt from export/import duties Armenian Development Agency

31. Construction Materials 1.Very Wide Range of Natural Stones 2.Cost-Effective Price of Natural Stones 3.Experienced Stone Processing Workforce 4.Construction Sector constituted 16% of GDP in 2003 Armenian Development Agency

32. Benefits of Investing in Textile/Clothing Industry of Armenia Tariff Free Access to CIS Availability of Experienced and Cost - Effective Work Force Good Supporting Infrastructure Availability of Free Space Average Wage Rate US$ 70 Armenian Development Agency

33. Energy Sector -5 generation major stations and more than 20 small generation companies -Transmission company (220kv network) -Distributing company (0.4-6/10-35-110 kv network) -Dispatching center (operator of power system) -Settlement center -Construction, installation, repairing companies -Scientific-research and design institutes

34. Tourism Sector of Armenia

35. Full Service Investment Promotion Agency  Providing Quality Information and Servicing Needs of Foreign Investors - preparation of an information according unique needs and distinctive business of foreign investor - preparation of a site selection matrix within Armenia  Site Visit Organization for Foreign Investors - Planning the Site Visit - Managing the Site Visit Brokering Business Partnerships - finding a right partner/partners in Armenia - Acting as a representative of your company in Armenia, etc. All Services of ADA are Free of Charge

36. Full Service Investment Promotion Agency  Providing Follow up and aftercare - Managing the post–visit, - preparation of additional information and required documentation, etc.  Investment Project Implementation - Assisting in the company registration - helping in staff selection (arranging the job announcements, applicators interviews, etc) - providing an office space for start up, etc.  Representing Investors Views to the Government and Ministries - Working closely with investment made companies - finding out what they find non appropriate for smooth profitable business, - preparing an official letter on that issue and representing it to the Government of Armenia All Services of ADA are Free of Charge

37. Investment Promotion Directorate Armenian Development Agency Address: 17 Charentsi, Yerevan, 375025 Armenia. Tel: +3741 0 570410 Fax: +3741 0 570710 E-mail: E-mail: info@ada.aminfo@ada.am THANK YOU Contact Information