Since July 1, 2025, Armenia has introduced a system of electronic employment contracts operated through the State Revenue Committee. Initially, the transition to a fully digital format was expected to become mandatory for all employers.
 

However, the mandatory implementation has been postponed – the new deadline is now set for July 1, 2027
 

This decision does not отменяет the reform but rather provides the market with time to adapt to existing infrastructure limitations.
 

What Has Changed: Key Points of the Transition Period
 

During 2026–2027, a flexible approach is in place:

• both electronic and paper-based contracts are allowed
• no penalties apply for not using the electronic format
• the system remains operational, but its use is voluntary

In practice, this gives businesses time to adjust without regulatory risk.
 

Why Mandatory Digitalization Was Postponed
 

The electronic contract system itself is functional. The issue lies not in the platform, but in the surrounding infrastructure, which is not yet fully synchronized.
 

Three key components are involved:

• electronic identification (ID cards)
• digital signature mechanisms
• migration procedures for non residents

For Armenian citizens, these elements work as an integrated system. For non residents, there are gaps between them – and this mismatch is the main reason behind the postponement.
 

How to Formalize an Employment Contract Today: Two Options
 

Until 2027, employers can choose the format that best fits their situation.
 

Electronic Contract
 

The process is straightforward:

1. The employer creates the contract in the SRC system
2. Signs it using a digital signature
3. The employee signs it as well
4. The system automatically registers the employee

The contract becomes legally valid once both parties have signed it.
 

Paper-Based Contract
 

During the transition period, it is allowed to:

• conclude contracts in paper form
• register employees without a digital signature

Important: no penalties apply for using paper contracts, even for agreements signed after January 2026.
 

Why Non Residents Encounter Difficulties
 

The postponement does not eliminate the core issue – it simply provides an alternative.
 

If a company opts for a fully digital format, challenges remain.
 

1. Digital Signature
 

Armenian citizens typically use:

• ID cards with built-in digital signatures
• mobile-based identification solutions

 Non residents do not have access to this infrastructure by default.
 

If a compatible digital signature cannot be obtained, signing an electronic contract becomes impossible.
 

2. The "Circular Dependency" of Migration Status
 

To obtain a digital signature, a foreign national must confirm legal residency.
 

However, in many cases, obtaining legal status requires an existing employment contract.
 

This creates a circular dependency:

• no legal status – no digital signature
• no digital signature – no ability to sign the contract

This is why paper contracts remain a practical solution.
 

3. Requirement for Physical Presence
 

In some cases, obtaining a digital signature requires the foreign employee to be physically present in Armenia.
 

This can lead to:

• delays in onboarding
• additional costs
• the need for travel

This is particularly critical for remote hires.
 

Resident vs Non-Resident: Key Differences
 

It is important to note that employment rights are equal. Differences arise only in administrative procedures.
 

Practical Steps for Employers
 

To avoid delays, follow a simple approach:

1. Determine the employee's status
   Citizen or non residents? Are documents in place?
2. Check digital signature availability
   Without it, a digital contract is not feasible
3. Choose the format deliberately
   Paper contracts are a fully legal alternative
4. Plan for timing
   Processes for foreign employees may take significantly longer

Actual Processing Timelines

• Armenian citizens: typically 1 business day
• Non residents: 1–2 weeks or longer, depending on status

Timelines depend on document readiness and migration procedures.
 

Root Cause of the Issue
 

The main barrier is not the employment contract itself, but identity verification via digital signature.
 

The system depends on:

• ID cards
• biometric documents
• identification infrastructure

Until these elements are fully aligned, complete digitalization is not achievable.
 

Link to the ID and Passport Reform
 

The rollout of new ID cards and biometric passports has been postponed to autumn 2026
 

Planned improvements include:

• upgraded service centers
• online appointment systems
• gradual transition to new documents

Until this reform is completed, digital signatures will remain a limiting factor – especially for non residents.
 

FAQ – Key Questions Answered
 

Are electronic contracts mandatory now?
No. Paper contracts can be used until July 1, 2027.
 

Are there penalties for using paper contracts?
No. No liability applies during the transition period.
 

Can a non resident be hired without a digital signature?
Yes, through a paper-based contract.
 

Is the electronic system operational?
Yes, but its use is optional.
 

Conclusion
 

The postponement is not a rollback of the reform, but a technical pause.
 

Until 2027 electronic contracts remain available, paper contracts are fully legal, no penalties apply. For businesses, the key is not choosing "digital vs paper," but ensuring a smooth hiring process.
 

If the employee is an Armenian citizen with a valid ID and digital signature, the electronic format is fast and efficient.
 

If the employee is non resident, it is essential to first verify:

• migration status
• tax number
• availability of a digital signature
• realistic timelines

A practical approach in 2026–2027 is to select the contract format based on actual readiness – not on the intention to go digital.
 

How AFM Can Help
 

If you are hiring in Armenia or planning market entry, it is important to consider not only legal requirements but also real-world processes and timelines.
 

With AFM, you can:

• understand current regulatory requirements
• compare financial and banking solutions for your business
• access practical guides on documentation and processes

This helps you avoid costly delays and structure your hiring processes more efficiently. Explore financial tools with AFM and optimize your operational workflows. 
 

Prepared by AFM