Armenia: An Overview

Armenia is a landlocked country in the South Caucasus. The country serves as a bridge between Europe and Asia, offering a strategic location for trade and investment. Despite geopolitical challenges, Armenia maintains strong economic ties with key partners such as the EU, Russia, and the Middle East. Recent developments also show increased co-operation with Asia-Pacific countries, including India, Japan, and South Korea, reflecting a diversification of trade partnerships. The country has made significant strides towards improving its business climate, with a growing tech sector, investment-friendly policies, and a skilled workforce driving economic modernisation. The tech and start-up ecosystem continues to expand, with a focus on AI, fintech, and green technologies.

The official language of Armenia is Armenian, and the official currency is the Armenian dram. As of 1 January 2026, the estimated permanent population of Armenia is 2,960,000, reflecting a slight decrease due to emigration trends.

Armenia adopts an “open-door” approach to foreign investments, offering one of the most liberal investment environments among Commonwealth of Independent States countries. The country’s legal framework facilitates the easy establishment and operation of businesses, with mechanisms in place to protect investments through both domestic and international agreements.

Armenia has entered into more than 50 bilateral investment treaties and double taxation treaties with countries such as the United States, Canada, Switzerland, and China. The country is also a party to key multilateral agreements, including the ICSID Convention and the Energy Charter Treaty, which promote and safeguard investments. These agreements offer investors legal protection, tax benefits, and greater predictability, strengthening Armenia’s business climate.

Key Trade Sectors

Armenia’s economy thrives on a diverse mix of industries, with agriculture, mining, renewable energy, telecommunications, IT, jewellery, finance, and tourism playing central roles. Emerging sectors such as electric vehicle components, clean energy solutions, and biotechnology are receiving government support and incentives.

Legal System

Armenia is a parliamentary, unitary republic with a civil law system. However, Armenian legal practice also has some common law elements. Since 2007, the decisions of the Armenian Court of Cassation (including interpretations of law), the Constitutional Court, and the European Court of Human Rights (ECtHR) have been binding on all courts.

Armenia’s judicial system operates on three levels:

• first-instance courts, including both general jurisdiction and specialised courts;
• courts of appeal, which review lower court decisions; and
• the Court of Cassation, serving as the highest judicial authority.

Additionally, the Constitutional Court oversees the constitutionality of laws, settles disputes between state institutions regarding their constitutional authority, and adjudicates election-related cases.

Armenia is a party to several international treaties governing the recognition of foreign judicial decisions. Since 2018, in the absence of a relevant treaty, Armenia has also been acknowledging foreign court rulings based on the principle of reciprocity, covering both final judgments and interim measures.

Alternative Dispute Resolution and Arbitration

Armenia has adopted modern arbitration and mediation laws aligned with the UNCITRAL Model Law and has ratified key international agreements, including:

• the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards; and
• the 2018 Singapore Convention on International Settlement Agreements Resulting from Mediation.

Arbitration is becoming increasingly common in Armenia, with disputes being referred to both ad hoc and institutional arbitration. The country has a supportive legal framework for arbitration, and in certain cases, arbitral awards can be submitted directly for enforcement without requiring court enforcement.

Key Considerations for Foreign Investors

Key considerations for foreign investors looking to set up a business in Armenia include the following:

• Armenia imposes no local ownership requirements, allowing foreign investors to own 100% of companies across most sectors, with only limited exceptions in specific sectors (eg, media-related sectors).
• Foreign nationals can serve as directors, board members, and employees without the need to reside in Armenia, although employment and residence permit requirements may apply.
• Limited liability companies can be registered quickly – within an hour – if the founders and director are present in Armenia.
• The standard registration process for limited liability companies (LLCs) and closed joint-stock companies (CJSCs) typically takes between one and two days, with a few exceptions for CJSCs.
• There is no minimum charter capital requirement for most companies, with a few sector-specific exceptions (primarily in the financial sector).

Armenian law ensures national treatment and non-discrimination for foreign investors, guaranteeing that foreign investment laws are no less favourable than those for local entities. No pre-approval or state body authorisation is required to make foreign investments. The primary restriction concerns land ownership; foreign citizens are prohibited from owning agricultural land or forests, though they can lease land long-term or obtain rights for development. Foreign-owned companies incorporated in Armenia, however, can own land through SPVs without these limitations.

Tax System

The following are the general types of taxes that are paid in Armenia:

• value-added tax (20%);
• profit tax (18%);
• income tax for dividends (5% – applicable only to individuals);
• property tax (0.05–1.5% of the market value of the property);
• income tax (20% – certain exceptions are applicable depending on the nature of income);
• excise taxes; and
• turnover tax (1.5–10% of turnover for businesses that are not VAT payers – a beneficial tax regime for small businesses).

Armenia has treaties excluding double taxation and preventing fiscal evasion with 51 countries. Membership in the Eurasian Economic Union (EAEU) continues to impact customs, trade regulation, and cross-border tax policies.

Recent Developments

The legal landscape in Armenia is evolving rapidly, with several significant reforms underway. The key changes include the following:

• Introduction of Mandatory Medical Insurance: As of January 1, mandatory medical insurance has come into force in Armenia. Under the new system, the previously available state-funded free medical care – limited to specific cases – has been replaced by an insurance model that is partially financed through employee salary contributions. This marks a significant shift in the healthcare system and employer obligations.
• Adoption of a New Cybersecurity Law: Armenia has adopted a new Law on Cybersecurity, establishing a comprehensive regulatory framework for cybersecurity governance, risk management, and digital resilience in the country. This law lays the foundation for structured oversight of cyber threats and related compliance requirements.
• Major Amendments to the Law on Compulsory Enforcement: The legislation governing compulsory enforcement has been substantially revised. Among other changes, the reforms expand the jurisdiction and powers of the enforcement service while reducing the level of court involvement in enforcement procedures, thereby aiming to streamline and accelerate the enforcement process.
• Comprehensive Reform of Migration Legislation: Armenia is currently in the process of overhauling its migration framework. Although the new legislation has not yet been adopted, the proposed reforms are expected to bring fundamental changes. In particular, the concept of a work permit is likely to be eliminated, the grounds for obtaining residence permits will be revised, and a quota system for permits related to employment in Armenia is anticipated to be introduced. While the draft law is still under development, these changes are expected to materially impact the legal and regulatory climate for foreign workers and investors.
• Digital Transformation of the Judicial System: Armenia is transitioning its judiciary to fully electronic platforms as part of broader e-justice reforms. Civil cases were moved to digital systems in mid-last year, administrative courts have recently completed their transition to fully digital filings, and bankruptcy cases are expected to follow suit in the near future.
• Mandatory Digital Employment Agreements: Since January, it has become mandatory to conclude employment agreements through a digital platform. While this system is already in operation, it remains in a developmental stage and is likely to undergo further modifications as it becomes more established.