Regulation of Foreign Investment in Armenia

Foreign investors are foreign citizens, stateless persons, foreign legal entities, citizens of Armenia residing out of the territory of the RA and international organizations which engage in investment in the Republic of Armenia. Foreign investment means any type of property, including financial resources and intellectual values, which is directly invested in commercial and other activities implemented in the Republic of Armenia to gain profit or achieve any other beneficial result. Investments may be made by means of currency (particularly the national currency of Armenia - Dram), currency values, movable property and real estate, stocks, bonds, other securities, monetary claims, rights to claim performance of contractual obligations, intellectual property and so on.

The Republic of Armenia with the aim of encouragement and increase of the level of foreign investment establishes and guarantees that legal regime of foreign investment and investor’s property rights cannot be less favorable than the legal regime acting with respect of Armenian nationals, Armenian legal entities and organizations. However with the aim of providing protection of the national security of the Republic of Armenia, the Government may determine the territories where investment activity is prohibited or restricted.

Guarantees

Armenian legislature has also established the guarantee for investors in case of amendments and changes to legislation on foreign investment. If such amendments took place, the activity of foreign investor, upon his request, will be regulated by the legislation which was effective at the moment of implementation of investments within 5 years from that moment. Government bodies also cannot confiscate foreign investment. Confiscation may be allowed only as an extreme means in case of emergency and it may be applied only upon the judgement of a court of law and with full compensation. Foreign investors are entitled to protection of their rights and interests from violations and abuse of the state bodies and their officials through a court order. Compensation shall be made at current market prices or prices determined by independent auditors, and compensation is to be paid either in the currency invested, or in any other currency mutually agreed upon by the parties.

The investor has the right to use and dispose his profit (revenues) at his discretion, export legally purchased monetary assets or property from Armenia without any barriers. He also has the right to open bank accounts and keep his assets there. Alongside with that he has the obligation to pay taxes, duties and other obligatory fees in the territory of Armenia. In Armenia foreign investment may be implemented in various forms. Investors may carry out investments through the enterprises which belong to them as well as its division, branches and representative offices or through purchase of acting enterprises. They have a possibility to implement investments by registering Armenian legal entities, enterprises which don’t have the status of legal entity, foundation of new enterprises with participation of Armenian nationals or the purchase of the property right for the share of acting enterprises. They may also implement investments by purchasing stocks, bonds and other securities, other property rights as well as by virtue of contracts with the citizens of the RA, Armenian legal entities or enterprises which don’t have the status of legal entity. Foreign investors may carry out any type of legal commercial activity. For performing some types of commercial activity the obtainment of a license is obligatory. 

Privileges

The import of the goods included in the list established by the Government of RA, which is directed at supplementing the charter capital by the enterprises with foreign investment, is exempted from custom duties. In case of sale of the goods in the period of 3 years, after using the mentioned privilege, the custom duty, including the collection of calculated penalties for its payment delay is carried out in accordance with the rules and procedures set by the customs legislation.

Privileges established by this law shall apply to those enterprises with foreign investment where such investment is no less than 30 (thirty) percent at the moment of foundation. In Armenia enterprises with foreign investment can acquire rights and obligations by virtue of lease contracts, contracts of concession with the Government of the RA and so on. Intellectual rights of foreign investors are provided and guaranteed by the legislation of Armenia. Insurance of property or risks is carried out at the discretion of the investor.

Order of disputes resolution

If there is a legal dispute between the investor and the Republic of Armenia, it must be resolved in accordance with Armenian legislation by Armenian courts. Those disputes to which the Republic of Armenia is not a party, shall be considered by the courts of the Republic of Armenia or by other bodies for economic dispute settlement, in accordance with legislation of the Republic of Armenia. Such disputes shall be considered by a mediation court, should be parties have so agreed unless, otherwise established by international treaties or by the preliminary agreement (founding documents, economic contracts, and so on) of the parties. Foreign investors are liable for violation of Armenian legislation in established order. In that case the investor may use his property to guarantee any type of its/his/her obligations (pledge and so on).