The Government of Armenia has declared and is implementing an “open door” policy, applying almost no restriction to investment activities. Armenia has one of the most open investment regimes among emerging market countries.
Among many advantages, Armenia’s legal framework provides 100% ownership of resident legal entities, equal treatment, as foreign companies are entitled by law to the same treatment as Armenian companies, almost no restrictions towards any sector and geographic location within the country as well as land ownership opportunity. Moreover, there are no limitations on the exchange of foreign currencies and the repatriation of profits, no restrictions on remittances or staff recruitment.
Armenia’s legal regime for investment is open. The Constitution of Armenia protects all forms of property and states that everyone shall have the right to own, use and dispose, at its discretion, legally acquired property. The Law on Foreign Investments defines the conditions under which foreign investment is permitted. According to its provisions, enterprises with foreign investment may conduct any economic activity which complies with the goals and objectives stated in the law, is not limited or prohibited by the legislation of Armenia, or due to national security requirements.
The Law on Foreign Investments of the Republic of Armenia spells out the main principles of the country’s regulation of FDI and provides general provisions governing it, including entry rules and establishment procedures, guarantees on investment treatment and protection as well as access to incentives, in particular:
- The legislation grants high standards of protection and guarantees to investors. The Law on Foreign Investments grants national treatment of foreign investors by stipulating that “the legal regime related to foreign investments and the methods of their implementation cannot be less favorable than the regime governing the property, property rights and investment activities of citizens, legal entities and unincorporated enterprises of Armenia”.
- Expropriation of foreign investments is prohibited, except under exceptional circumstances. Foreign investments are protected from nationalization and Government bodies cannot arbitrarily expropriate foreign investments. Ensures full compensation in exceptional cases of nationalization or expropriation by the Government.
- With regards to Investor-State dispute settlement (ISDS), national and international arbitration is available to investors. The Law on Foreign Investments provides investors with access to ISDS through the filing of claims at domestic courts. International arbitration is also possible in cases where investments are protected by international investment agreements (IIA).
- Armenia is a party to the International Centre for Settlement of Investment Disputes (ICSID) Convention and has ratified the United Nations Commission on International Trade Law (UNCITRAL) Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention).
Armenia has concluded 43 bilateral investment treaties (BITs).
In addition, Armenia is a party to seven treaties with investment provisions (TIPs) and two regional TIPs – the Treaty on Eurasian Economic Union and the Commonwealth of Independent States Convention on Protection of Investor Rights. While the former contains substantive investor protections and ISDS, the latter includes investment protections tied to domestic law and non-binding commitments to arbitration. Armenia is also a party to the Energy Charter Treaty, which provides detailed investor protection and access to ISDS.
The main features of Armenia’s IIAs include:
- A broad asset-based definition of investment,
- Post-establishment national treatment (NT) and MFN clauses,
- A fair and equitable treatment (FET) provision, unqualified in most treaties,
- Unqualified clauses on direct and indirect expropriation.
- Umbrella” clauses in more than half of the BITs. So-called umbrella clauses bring contractual and other obligations under the umbrella of the investment treaty by requiring a host State to respect any obligation assumed by it with regards to a specific investment (for example, in a concession contract), making them potentially enforceable through ISDS.
- Free transfer of any investment-related funds with no exception
Visit https://www.mineconomy.am/en/page/1704 for the list of BITs signed:
Visit https://armenia.eregulations.org/ for detailed information on multiple investment and business-related procedures in Armenia.