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In this page: FDI in Figures | Why You Should Choose to Invest in Armenia | Procedures Relative to Foreign Investment | Investment Opportunities


FDI in Figures

In a context where global foreign investment increased by 10.9% in 2013, in particular in Europe (+25.2%) and in Latin America (+17.5%), FDI flows to developing economies reached a new high of US$759 billion. However macroeconomic fragility and policy uncertainties are driving investors to caution.

Since the Soviet Union broke up in 1991, Armenia has made a great progress towards the liberalization of its economy.  According to the World Bank, Armenia is ranked first amongst CIS (Commonwealth Independent States) countries in terms of FDI appeal. In effect, the government recently established conditions and laws which are favorable to foreign investments, and because of its economic dynamism, the country has earned the nickname of "The Caucasian Tiger". However, due to the crisis, FDI has dropped 30%, going from USD 1.1 billion in 2008 to USD 700 million in 2009. This decrease has continued since then, to reach 489 millions USD in 2013. The country remains strongly dependent on the economic health of the Russian economy and of the EU.

Russia, France and the Netherlands are the three major investors in Armenia. The three sectors covered by these investments are energy, telecommunications, metallurgy, hotel services and air transportation. Significant investments were also made by the Armenian communities living outside the country (nearly 6 million people).

The crisis affected the foreign investment flow, but the support of international organizations has allowed investors to maintain their confidence towards the country.

Information on the 2013 FDI influx in this region can be accessed in the Global Investment Trade Monitor published in January 2014 by the United Nations Conference on Trade and Development (UNCTAD).


Country Comparison For the Protection of Investors

  Armenia Eastern Europe & Central Asia United States Germany
Index of Transaction Transparency* 6.0 7.0 7.0 5.0
Index of Manager’s Responsibility** 6.0 5.0 9.0 5.0
Index of Shareholders’ Power*** 6.0 9.0 5.0
Index of Investor Protection**** 6.7 5.9 8.3 5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

Foreign Direct Investment 201120122013
FDI Inward Flow (million USD) 515489370
FDI Stock (million USD) 5,1035,1345,448
Performance Index*, Ranking on 181 Economies 74--
Potential Index**, Ranking on 177 Economies 136--
Number of Greenfield Investments*** 211922
FDI Inwards (in % of GFCF****) 19.520.814.8
FDI Stock (in % of GDP) 50.351.651.7

Source: UNCTAD - Last Available Data.

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

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Why You Should Choose to Invest in Armenia

Strong Points
The country's attractiveness is linked to its high economic growth over the last ten years and a series of reforms. We can also name the following factors: 
- Its geographic location, which gives it access to the former Soviet republics;
- A well trained active population, which is relatively cheap to employ;
- A developing economy with sectors requiring foreign investments (e.g. telecommunications);
- A desire to normalize relations with Turkey, pointing to a possible opening of the border.
Weak Points
Armenia has a small domestic market and high transport costs (all goods must transit through Georgia due to the embargo imposed by Turkey and Azerbaijan), a fact which hinders the country's economic development.
Corruption, nepotism and interference by state authorities are also problematic issues. Political instability can also be a negative factor, as well as the risk linked to natural catastrophes (earthquakes).
The country's poverty is also a negative factor, especially during times of crisis, as the social climate and domestic consumption could be jeopardized.
Government Measures to Motivate or Restrict FDI
The Armenian government is conscious of the need to create a more inviting business environment and targeted efforts have been made to encourage foreign investment, required for the development the growing economy. The law on the reduction of poverty and corruption, as well as other reforms specifically linked to the business environment came into force. In particular, we can name:
- equal treatment for foreigners;
- No limitation on foreign ownership;
- Freedom to repatriate profits;
- Limited State intervention and deregulation.

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Procedures Relative to Foreign Investment

Freedom of Establishment
Freedom of establishment is guaranteed.
Acquisition of Holdings
As part of the privatization programme initiated by the government of Armenia, a foreign investor can acquire an interest in a domestic company (both public and private) through purchase of shares or its assets. The properties and companies owned by the State need to be privatized before being acquired by a foreign investor. Privatization process in the country is regulated by the 'Law on Privatization of State Property'.
Obligation to Declare
Foreign investors can make investments in Armenia only through the establishment of fully foreign-owned companies (including representations, affiliates and branches) or the purchase of existing companies and securities or the establishment of joint-ventures. There are no limitations on the volume and type of foreign ownership, the number of foreign employees' and access to financial sources.
In addition, a foreign investor is bound to bear the responsibility for any violation of legislation of the Republic of Armenia, as defined by legislation of the Republic of Armenia. Property of a foreign investor, including working capital and property rights may be used by that investor to guarantee any type of obligations.
Competent Organization For the Declaration
Ministry of Finance
Requests For Specific Authorizations
There are no limitations in foreign ownership.

However, foreigners can only lease land and need permission to lease land on a long-term basis.

Learn more about Foreign Investment in Armenia on, the Directory for International Trade Service Providers.

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Investment Opportunities

Investment Aid Agency
Armenian Development Agency
Armenian Development Agency
Tenders, Projects and Public Procurement
Tenders Info, Tenders in Armenia
Globaltenders, Tenders & Projects from Armenia
DgMarket, Tenders Worldwide

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Learn more about Investing in Armenia on, the Directory for International Trade Service Providers.

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Last Updates: October 2014