Hiring someone in Yerevan does not make a foreign employment template compliant. Armenia labor law governs the relationship when the worker is permanently resident in Armenia, including relationships with a foreign employer, subject to the scope rules in the official Labour Code.
The practical answer is to establish a lawful employer structure before the start date, issue a locally compliant written contract, run Armenian payroll and manage leave, working time and exits under local rules. A foreign company can do that through its Armenian entity or a local employer of record. The commercial choice is separate from the legal duties.
When Armenia labor law applies
Start with the worker, the place of work and the employing party. The Labour Code expressly addresses foreign employers and employees permanently resident in Armenia. It also allows a court to treat a civil contract as employment when the real relationship has the features of employment. Calling a full-time, managed role a consultancy does not settle its legal status.
This matters for remote engineering teams. A developer may report to a manager abroad and work in a global product squad, yet the local employment relationship still needs a lawful basis. The safest operating assumption is that local mandatory protections follow the employee. Obtain Armenian advice for unusual residence, cross-border assignment or dual-employment facts.
The first structural decision is who employs the person. If your company is testing a small team, an EOR can carry the local employer obligations. If Armenia is becoming a permanent operating base, a subsidiary may give you more control. Our comparison of an Armenian entity and an EOR explains that choice; our EOR guide covers the operating model.
Put the employment terms in a local contract
Use a written Armenian employment contract or an individual act of employment that contains the required information. The current Code lists matters such as the workplace, role, start date, salary, working-time regime, annual-leave type and duration, and the means the parties use for employment notices. A translated headquarters template can miss local concepts even when its commercial terms look complete.
Treat an indefinite contract as the normal form. A fixed term needs a lawful reason connected to the nature or conditions of the work, or another basis permitted by law. Do not use rolling fixed terms simply to make dismissal easier. The document should also align with internal policies, payroll records and what managers actually ask the employee to do.
Before work starts, confirm the employing entity, signatory authority, job title, duties, place or remote-work arrangement, salary currency and payment mechanics, schedule, leave, confidentiality, intellectual-property language, notice channel and governing policies. Where two language versions are used, state which version controls and have local counsel review the result.
Probation, working hours and records
Probation must be written into the employment terms. Under the current Labour Code, the usual maximum is three months, with longer periods only where Armenian legislation specifically permits them. If the employee continues after probation expires, the employment continues and an employer must rely on the ordinary statutory grounds for a later termination.
The normal ceiling is forty hours per week and eight working hours per day, subject to the Code's exceptions and special regimes. Global teams should convert that rule into a real schedule. Regular late calls, weekend deployments and informal overtime can create liabilities even when the employee is happy to cooperate.
Keep evidence that matches reality: the signed contract, hiring act where applicable, time records, leave requests and approvals, payroll calculations, policy acknowledgements, performance documentation and employment notices. Armenian law is not satisfied by a good contract paired with inconsistent practice. Managers abroad need a clear approval path for overtime, leave and performance actions.
Annual leave and payroll administration
For a standard five-day week, statutory minimum annual leave is twenty working days; for a six-day week it is twenty-four working days. The Code regulates scheduling, splitting leave and compensation for unused leave on termination. A global unlimited-leave policy should therefore sit on top of, not replace, the local statutory entitlement and records.
Payroll is a compliance process, not a bank transfer. The employer or its local provider must calculate salary and mandatory deductions, file the required reports, preserve supporting records and complete final settlement correctly. The Tax Code also requires tax agents to register a new employee within the prescribed pre-start timeline, subject to stated exceptions.
Set one local owner for payroll inputs. That person should receive approved changes to salary, bonuses, leave, sick absence and termination dates before the payroll cut-off. A second reviewer should reconcile the employment contract, HR system and payslip. This simple control catches many errors before they become employee disputes.
Termination requires a ground, process and evidence
An employment contract should never be ended by copying a notice used in another country. Armenian law distinguishes termination grounds and attaches different notice, evidence and payment requirements to them. Redundancy, performance, misconduct, expiry and mutual agreement are not interchangeable labels.
Before taking action, identify the exact statutory ground, test whether any protected period applies, collect contemporaneous evidence, calculate notice and final payments, and use the correct written instrument. Final settlement should cover salary and any compensation due for unused annual leave. Local review is especially valuable before an employer-led exit because a procedural defect can weaken an otherwise genuine business case.
A useful decision rule is simple: if the company controls the reason and timing of the exit, obtain Armenian legal review before the notice is issued. If the parties genuinely agree an exit, document the agreement without pressure and make the settlement terms unambiguous.
A compliance checklist for foreign employers
- Choose a lawful local employer: your Armenian entity or a qualified EOR.
- Confirm the worker's residence and, for a foreign national, the immigration route. Armenia's official work-permit platform explains the employer-led process and applicable exemptions.
- Prepare locally reviewed employment terms before the employee starts.
- Register the hire, establish payroll and assign owners for time, leave and personnel records.
- Brief the overseas manager on working-time, overtime, leave, performance and termination controls.
- Review the setup whenever the role, reporting line, work location or employing entity changes.
Foreign employers often focus on the contract and underestimate manager behaviour. Give the manager a short local playbook: what needs HR approval, what must be documented and when local advice is mandatory. That is more useful than asking a manager to interpret the Labour Code.
Frequently asked questions
Can a foreign company employ someone in Armenia directly?
The Code addresses employment relationships involving foreign employers, but labour-law scope is only one part of the setup. Tax registration, payroll, corporate presence and enforceability also matter. For an operational hire, use local legal and tax advice to choose between direct employment, an Armenian entity and an EOR.
Can we classify an Armenian team member as an independent contractor?
Only when the relationship is genuinely independent. If a court finds that a civil contract actually regulates employment, labour rules can apply. Control, integration, working pattern and the real allocation of risk matter more than the heading on the agreement.
What is the lowest-friction route for a first engineering hire?
For many foreign companies without an Armenian entity, a properly run EOR is the cleanest starting structure. It keeps local employment and payroll with a registered employer while the client directs day-to-day work. The provider still needs careful due diligence and a clear services agreement.
If you want to recruit and operate a team in Yerevan without building the local employment stack alone, ArgusRecruit's Engineering Studio combines hiring with employer-of-record support. Use this guide as an operating checklist, then have Armenian counsel confirm the facts of each hire.