Foreign investment in Armenia is regulated by the RA Law "On Foreign Investments" (1994). The law was adopted to attract foreign capital into the country, grants investors a set of guarantees, and defines the types and forms in which investment in the Armenian economy may be made.
Guarantees for foreign investors in Armenia:
- protection against nationalization - expropriation is possible only by a court decision, with full compensation for the value of the investment;
- protection from damage caused by unlawful or inappropriate actions of state authorities;
- the right to freely repatriate invested funds and profits out of Armenia;
- a "grandfather clause": if the legislation on foreign investments changes to the investor's disadvantage after the investment is made, the investor is entitled to continue operating under the previous, more favourable conditions for five years.
Types of investment allowed in Armenia:
- foreign or national currency and other currency valuables;
- movable and immovable property (buildings, structures, equipment and other material assets) and related proprietary rights;
- shares, bonds and other securities provided for by RA legislation;
- monetary claims and rights of claim under contractual obligations;
- intellectual property rights;
- the right to carry out economic activity provided for by law or by contract, including the right to explore, extract, process and use natural resources;
- paid services;
- any other type of investment not prohibited by RA legislation.
Forms in which foreign investment can be made:
- establishing an enterprise wholly owned by the foreign investor, or opening a branch, representative office or subdivision of a foreign legal entity;
- acquiring shares or a stake in an existing Armenian enterprise, including jointly with RA citizens or legal entities;
- acquiring shares, bonds and other securities within the framework of RA legislation;
- acquiring land-use rights and concessions to use natural resources on the territory of Armenia;
- acquiring other proprietary rights;
- other means not prohibited by law, in particular under agreements with RA legal entities and individuals.
The prohibition or restriction of foreign investments of the established types and forms may be carried out only in the manner provided for by RA legislation - meaning an investor's rights cannot be restricted arbitrarily.
Frequently asked:
Does a foreign investor need a local partner in Armenia? No, a foreign investor can wholly own an Armenian enterprise without the participation of RA citizens or companies.
What happens if the law on foreign investments changes after the investment is made? The law entitles the investor to operate under the conditions in force at the time of investment for five years if the new rules are less favourable.
How do our lawyers support foreign investors? We assist with structuring the transaction, registering the enterprise or acquiring a stake, legal due diligence on the target asset, drafting agreements, and protecting the investor's interests in disputes with state authorities or partners.
If you are planning to invest in Armenia and want to assess the risks and how your rights are protected, contact us. For more detailed information write to info@jurist.am.