Armenia’s New Investment Law (HO-285-N): What Changed and How to Verify an Incentive Is Real

Armenia’s Law on Investments HO-285-N (arlis.am act 227811, published 10 July 2026) took effect on 11 August 2026 and repealed the 1994 Law on Foreign Investments outright. Most of the 1994 protections survive in some form. The commercially significant change is the status of incentives: the statute authorises them and grants none, so any tax break, subsidy, or land concession an Armenian counterparty offers you exists only if a separate instrument creates it.

What HO-285-N replaced

The 1994 Law on Foreign Investments (HO-115, adopted 31 July 1994) governed foreign capital in Armenia for thirty-two years. Article 22(2) of the new law repealed it on 11 August 2026. Article 22(6) grandfathers investments made under the old regime, preserving the earlier treatment for up to five years or for the investment’s stated duration.

Three of the 1994 protections carry across. National treatment survives and now extends to qualifying domestic investors. Free repatriation of profits and investment proceeds is restated. Treaty priority appears expressly in Article 2, supplementing Article 5(3) of the Constitution, so the rules of Armenia’s bilateral investment treaties continue to override domestic law where they conflict. Armenia has BITs with 42 countries, and the Ministry of Economy maintains the list.

Expropriation protection changed. Article 8 defines and prohibits indirect expropriation alongside direct taking, which the 1994 law did not address. On compensation it requires fair market value, payable in advance where the applicable law so requires, with a reasonable-time fallback where it does not. Article 60(5) of the Constitution operates independently of the statute and mandates prior and equivalent compensation for takings on overriding public interest grounds. The Constitutional Court read the predecessor provision that way in decision SDO-39 (1997), holding that compensation must precede the taking and cannot be deferred.

Land ownership is untouched by the new law. Article 60(6) of the Constitution still bars foreign citizens, stateless persons, and foreign legal entities from owning land in Armenia except where a law provides otherwise, and agricultural land ownership remains closed to foreign persons entirely. A foreign parent typically holds Armenian land through an Armenian subsidiary or takes a long lease. See our Armenian real estate page for how those structures work in practice.

Who the unified regime covers, and from when

Foreign investment falls under the law immediately. Qualifying domestic investment phases in by size under Article 22(7) and 22(8):

Domestic investment made before 11 August 2026 does not count toward these amounts. The statutory language on the boundary itself is inconsistent: Article 22(7) uses “exceeds” while Article 22(8)(5) treats the threshold as met when the cumulative amount “equals or exceeds” the stated figure. A project landing exactly on AMD 500 million or AMD 200 million should be assessed against the current text and any implementing guidance before the threshold is treated as satisfied.

The scope guard: no incentive is automatic

Article 16(2) sets out the categories of support the state may extend to an investment project. The list reads as six or seven categories depending on whether the two infrastructure formulations are treated as one heading or two, and it closes with a catch-all:

• Fiscal: tax privileges, customs duty exemptions, deferred payment of import VAT and duties.
• Financial: subsidies, co-financing, interest rate rebates, grants.
• Regulatory: stabilisation and grandfather clauses that freeze the applicable rules for a defined period.
• Simplified administration: fast-track permitting and single-window handling.
• Infrastructure: state funding for utility, road, and industrial park connections serving the project.
• Land-related: preferential allocation and lease terms for state or community land.

Articles 16(1) and 17(1) then do the work that catches most readers off guard. They authorise these categories; they confer nothing. An incentive binds the state only once legislation, a government or agency decision, or a signed investment contract creates it and sets its eligibility conditions. A pitch that says “the new investment law gives you a tax holiday” describes something the statute does not do. The tax consequences of an Armenian project still run through the Tax Code and any sector-specific regime, which our taxes in Armenia page covers, and the entity you use to hold the investment is set up under the ordinary rules described on our business registration page.

How to verify that an incentive is real

Article 18(2) requires the authorised body to maintain a public register of available incentives. Article 20(1)(7) makes the Government responsible for approving the register’s format and maintenance rules, and Article 20(1)(8) requires it to designate the investment promotion body that runs it. As of mid-August 2026 neither decision had been published on arlis.am, no administering body had been formally designated, and no register was reachable online. The nine-month implementing window runs to 12 May 2027, so the register may appear at any point before then.

Until the register is live, verification runs through the underlying instrument. Five checks cover most of the risk:

1. Get the instrument named and numbered. Ask which law article, which Government Decision number, or which executed investment contract creates the benefit. An offer that cannot be traced to one of those three has no legal basis.
2. Pull the text yourself on arlis.am and confirm the instrument is in force in its current wording. Armenian act numbering resets periodically, so match the act ID and the effective date, and treat a bare “HO-” label as insufficient identification.
3. Match eligibility line by line against your project: sector, region or community, investment amount, employment commitments, and the date by which the qualifying spend must occur.
4. Establish who decides and on what timetable. Some incentives follow automatically once the criteria are met; others require a discretionary decision by a ministry or commission, which is a different risk to underwrite before capital goes in.
5. Ask what happens if the law changes. Only a regulatory or stabilisation clause inside a signed investment contract binds the state to the rules as they stood. A benefit resting on a Government Decision can be withdrawn by a later Government Decision.

A live example: the GD N 1343-N infrastructure programme

Government Decision N 1343-N, adopted 24 August 2022, is what a properly grounded infrastructure incentive looks like. It operates nationwide. The state funds infrastructure serving a qualifying investment project: access roads, water supply and sewage, electricity, gas, telecommunications, and irrigation, together with the associated design, construction supervision, and land acquisition costs.

Two limits apply at the same time. State assistance may not exceed 70% of the infrastructure cost. Measured against total investment, the cap is 10% for projects below the AMD 500 million boundary and 20% for projects at or above it, under points 9(1) and 9(2). Projects located in communities on the border settlement list under GD N 30-N reach 40%. That list spans several regions, including Ararat, Vayots Dzor, Gegharkunik, and Tavush, so the programme is frequently described as a Tavush scheme when it is considerably wider.

The boundary case is genuinely ambiguous in the text. Point 9(1) covers projects “up to” AMD 500 million and point 9(2) covers projects of “500 million and more”, so an investment sitting exactly on that figure falls within both descriptions. Where a project is priced at or near AMD 500 million (about USD 1.27 million), the applicable cap should be settled with the administering body in writing before the budget assumes either percentage.

The new negotiation step before you can sue the state

Article 14(3) inserts a pre-litigation stage into disputes between an investor and the Armenian state or a community body. The investor serves written notice. Negotiations must commence within 30 days of that notice and ordinarily conclude within 90 days unless the parties agree to extend. If the state does not respond within the 30-day window, or if negotiations fail, the investor may proceed to the available judicial or arbitral remedy immediately. The obligation is a mandatory attempt, not a fixed 90-day standstill.

Article 14(2) carries the harder constraint. International arbitration against Armenia requires the Republic’s explicit written consent. A dispute resolution clause drafted on the assumption that ICSID or UNCITRAL arbitration is available by default may leave an investor in the Armenian courts when a claim actually arises. Consent is secured in the investment contract itself, or it comes from an applicable bilateral investment treaty, which is one reason the treaty position deserves checking at structuring stage, well ahead of any dispute.

Frequently asked questions

Before you commit capital against an incentive

1. Obtain the instrument reference in writing from whoever is offering the benefit, and confirm the act ID and effective date on arlis.am.
2. Model the project both with and without the incentive. Where the benefit depends on a discretionary decision or on regulations still to be adopted before 12 May 2027, the downside case is the one to finance.
3. Fix the applicable percentage or threshold in writing with the administering body where your project sits at a statutory boundary such as AMD 500 million.
4. Put the stabilisation clause in the investment contract if the economics depend on the rules staying as they are.
5. Draft the dispute resolution clause with Article 14(2) in mind, securing written consent to arbitration at signature or confirming that a bilateral investment treaty supplies it.

Last updated: 17 August 2026