Armenia, a country that largely depends on foreign trade, is making significant efforts to attract foreign direct investment. The Government has adopted an “open door” policy, with Most Favored Nation (MFN) and National Treatment regimes in place, and thorough-going legal protection to promote foreign investment.
The law “On Foreign Investments” ensures a highly favorable business environment for foreign investors. It also allows unlimited participation of foreign capital in Armenian enterprises and ensures its protection. Foreign investors are entitled to implement investments through:
- Establishment of a fully foreign-owned company (including representatives, affiliates and branches), or the purchase of an existing company;
- Establishment of a new joint venture company with the participation of Armenian companies or citizens, or the purchase of shares in an existing company;
- Purchase of different types of securities;
- Procurement of permits to use the land, or a concession agreement for the use of Armenian natural resources with participation of Armenian companies or citizens; or
- Procurement of other property rights.
According to the National Statistical Service of Armenia, foreign direct investment in Armenia rocketed from $70 million USD in 2001 to $1 billion USD in 2008. Although a decline in investments was observed immediately subsequent to the international financial crisis in 2009-2010, the inflow of foreign investments in 2011 increased to $816m USD, of which $631m USD represented foreign direct investments.
Major sources of investment in the Armenian economy include the Russian Federation ($3,170 million USD), followed by France ($727 million USD), Greece ($479 million USD), United States ($378 million USD), Lebanon ($365 million USD), Germany ($357 million USD) and Argentina ($334 million USD). Russia, France and the United States were the three biggest investors in Armenia in 2011. The three most important sectors where foreign investments were directed in 2011 included the processing industry ($246 million USD), telecommunications ($231 million USD), and electricity and gas ($101 million USD). The information technology sector has major investment potential as well.
*Acknowledgement – this content is provided from Investment Guide Armenia 2013 upon approval. – Full report here