June 13, 2025

Armenia’s Competition Protection Law: Essential Compliance Guide for Foreign Companies

Armenia's Competition Protection Law: Essential Compliance Guide for Foreign Companies

Navigate Armenia's competitive landscape with confidence through comprehensive legal compliance strategies

Why This Guide Matters

Foreign companies entering Armenia's market must navigate complex competition protection laws. Non-compliance can result in significant penalties, transaction invalidation, and regulatory scrutiny that could derail business objectives.

Armenia's economic landscape has evolved significantly, with the Law on Protection of Economic Competition serving as the cornerstone of the country's antitrust framework. For foreign companies seeking to establish operations, acquire assets, or engage in strategic partnerships in Armenia, understanding these regulations is not merely advisable—it's essential for successful market entry and sustainable growth.

The Commission for the Protection of Competition (CPC) actively monitors market concentration and has demonstrated increasing enforcement vigor. Recent cases show fines reaching up to 10% of annual revenue for prohibited concentrations, making compliance a critical business imperative.

Critical Compliance Alert

Recent enforcement actions have resulted in penalties exceeding 1 billion AMD for anti-competitive practices. Foreign companies must ensure proper notification and clearance procedures are followed before executing transactions.

Legal Framework and Regulatory Architecture

Primary Legislation

  • Law on Protection of Economic Competition
  • CPC Decision on Concentration Thresholds
  • Code of Administrative Offenses
  • Methodology for Calculating Fines

Regulatory Authority

The Commission for the Protection of Competition serves as the primary enforcement body with comprehensive powers including:

  • Merger control assessment
  • Market dominance evaluation
  • Penalty imposition
  • Transaction prohibition authority

Extraterritorial Application

Armenian competition law applies to foreign entities when their actions may:

Prevent, limit, or prohibit economic competition in Armenia

Harm consumer interests within Armenian markets

Impact competitive conditions in any Armenian commodity market

Merger Control and Concentration Requirements

Notification Thresholds

Combined Assets/Revenue Test

Total assets or revenue of all parties:

AMD 4 Billion+

Individual Party Test

Assets or revenue of at least one party:

AMD 3 Billion+

Market Dominance Alternative

Notification required regardless of financial thresholds if any party holds a dominant position in any Armenian commodity market

Transactions Requiring Declaration

Structural Transactions

  • Mergers between economic entities
  • Consolidation of economic entities
  • Acquisition of 20%+ assets or shares
  • Joint venture establishment

Control-Based Transactions

  • Intellectual property rights acquisition
  • Decision-making influence acquisition
  • Competitiveness impact transactions
  • Market influence activities

Critical Timeline Requirements

Pre-Closing

Declaration must be filed before transaction execution

1-3 Months

Standard review period (extendable to 6 months)

1 Month

Accelerated procedure for qualifying transactions

Market Dominance and Monopoly Regulations

Dominance Thresholds and Presumptions

Single Entity Dominance

≥ 33% market share

Presumed dominant position

Entity has no significant competition or can decisively influence market conditions

Collective Dominance

2 largest entities ≥ 50%

Joint market control

3 largest entities ≥ 67%

Oligopolistic structure

Qualitative Dominance Assessment

Beyond market share thresholds, the CPC evaluates:

Market Power Indicators

  • Financial standing and resources
  • Barriers to market entry
  • Vertical integration capabilities
  • Brand recognition and customer loyalty

Competitive Constraints

  • Competitor behavior and responses
  • Customer bargaining power
  • Potential market entry threats
  • Substitutable products/services

Penalties, Enforcement, and Compliance Consequences

Failure to Notify Penalties

Economic Entities

Up to AMD 5 Million

For undeclared concentrations

Accelerated Proceedings

Up to AMD 2.5 Million

50% reduction for cooperation

Prohibited Concentration Penalties

Corporate Entities

Up to 10%

Of previous year's revenue

Individual Officials

AMD 3-5 Million

Personal liability exposure

Structural Remedies for Prohibited Concentrations

Unwinding Measures

  • Separation of merged entities
  • Division of consolidated entities
  • Dissolution of new legal entities
  • Contract termination orders

Restoration Requirements

  • Asset return to original parties
  • Competitive condition restoration
  • Market structure rehabilitation
  • Consumer interest protection

Aggravating vs. Mitigating Factors

Aggravating Circumstances

  • • Intentional violations with knowledge
  • • Repeat offenses (recidivism)
  • • Deliberate concealment of facts
  • • Non-cooperation with authorities

Mitigating Circumstances

  • • Voluntary disclosure beyond requirements
  • • Full cooperation with CPC
  • • Prompt remedial measures
  • • First-time violations

Practical Compliance Scenarios

Disclaimer: The following examples are theoretical scenarios created for illustrative purposes and do not represent actual cases or legal advice.

Scenario 1: Successful Foreign Acquisition

Case Facts

  • • German manufacturing company
  • • Acquiring 60% stake in Armenian distributor
  • • Combined revenue: AMD 6 billion
  • • No market dominance concerns

Compliance Actions

  • • Pre-notification consultation with CPC
  • • Timely declaration filing
  • • Comprehensive market analysis provided
  • • Approval received within 2 months

Outcome: Transaction approved without conditions due to proactive compliance approach

Scenario 2: Conditional Approval Case

Case Facts

  • • UK telecommunications company
  • • Merging with Armenian competitor
  • • Combined market share: 45%
  • • Vertical integration concerns

CPC Conditions

  • • Divest overlapping retail operations
  • • Maintain competitor access to infrastructure
  • • Annual reporting requirements
  • • Price monitoring commitments

Outcome: Approval granted with behavioral and structural remedies to preserve competition

Scenario 3: Prohibited Transaction

Case Facts

  • • US technology company
  • • Attempted acquisition of dominant Armenian software provider
  • • Target held 78% market share
  • • No significant efficiency gains demonstrated

Compliance Failures

  • • Inadequate market analysis
  • • Failed to propose meaningful remedies
  • • Insufficient consumer benefit justification
  • • Late filing of required documents

Outcome: Transaction prohibited due to excessive market concentration without offsetting benefits

Strategic Compliance Recommendations

Pre-Transaction Due Diligence

  • Conduct comprehensive market share analysis
  • Assess target's competitive position
  • Evaluate threshold calculations early
  • Identify potential competition concerns
  • Prepare efficiency justifications

Regulatory Engagement Strategy

  • Engage in pre-notification discussions
  • Maintain transparent communication
  • Provide comprehensive documentation
  • Respond promptly to information requests
  • Demonstrate commitment to compliance

Risk Mitigation Framework

Early Detection

Implement systems to identify when thresholds may be triggered during business planning phases

Expert Consultation

Engage specialized competition law counsel familiar with Armenian regulatory practices

Timeline Management

Build adequate review periods into transaction timelines and closing conditions

Expert Strategic Advisory Services

Successfully navigating Armenia's competition law requires specialized expertise and strategic planning. Our comprehensive advisory services help foreign companies achieve compliance while maximizing transaction success.

Frequently Asked Questions

What are the current notification thresholds for foreign companies?

Foreign companies must notify the CPC when combined assets or revenue exceed AMD 4 billion, or when at least one party exceeds AMD 3 billion. Additionally, any party with a dominant position in Armenian markets must notify regardless of financial thresholds.

How long does the CPC review process typically take?

Standard review takes 1-3 months, extendable to 6 months for complex cases. Mixed concentrations and intra-group transactions may qualify for accelerated 1-month review. Pre-notification consultations can help estimate likely timelines.

What happens if we complete a transaction without proper notification?

Undeclared concentrations face fines up to AMD 5 million, while prohibited concentrations incur penalties up to 10% of annual revenue. The CPC may also order structural remedies including transaction unwinding and asset separation.

Do foreign-to-foreign transactions require Armenian approval?

Yes, if the transaction may impact Armenian markets or meet notification thresholds. Armenian competition law has extraterritorial reach when foreign activities affect competition or consumer interests within Armenia.

Can transactions be approved with conditions?

Yes, the CPC may approve concentrations with behavioral or structural conditions to address competition concerns. These may include divestitures, access commitments, pricing restrictions, or ongoing monitoring requirements.

Are there special rules for joint ventures?

Joint ventures are treated as concentrations under Armenian law. Full-function joint ventures that operate independently are subject to the same notification requirements and review processes as other concentrations, with no special exemptions.

Navigate Armenian Competition Law with Confidence

Armenia's competition protection framework presents both opportunities and challenges for foreign companies. Success requires strategic planning, comprehensive compliance programs, and expert legal guidance.

Protect Your Investment

Avoid costly penalties and transaction delays through proper compliance

Maximize Success

Strategic planning increases approval probability and reduces conditions

Expert Partnership

Specialized counsel ensures comprehensive compliance and regulatory success

Ready to ensure your Armenian market entry meets all competition law requirements?

Get Comprehensive Competition Law Advisory

Specialized strategic advisory for international businesses in regulated markets

Disclaimer: The content on this page is for general informational purposes only and should not be relied upon as legal, financial, or professional advice. While we strive to ensure accuracy, the information may be incomplete, outdated, or subject to change without notice. Readers should consult a qualified professional before making any decisions based on the content provided. We do not accept any responsibility for errors, omissions, or outcomes related to the use of this information.

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