Armenia

  What are the grounds for termination of employment contract in Armenia?   According to the Labor Code of Armenia (hereinafter also referred as “The Code”): The employment contract is terminated: by the agreement of the parties. at the initiative of the employee. at the initiative of the employer.   How is an employment contract terminated by mutual agreement of the parties? When terminating an employment contract by mutual agreement, one party to the employment contract submits a written proposal to the other party to terminate the contract. If the other party agrees to the proposal, they must notify the proposing party of their consent within seven days. If the parties agree to terminate the contract, they conclude a written agreement specifying the date of termination of the contract and other terms (including compensation, etc.). If the party that received the proposal to terminate the contract does not notify its consent to terminate the contract within the seven-day period, the proposal to terminate the employment contract shall be deemed rejected.   Can the employer terminate an open-ended employment contract? The employer has the right to terminate an open-ended employment contract with the employee, as well as a fixed-term employment contract before the expiration of its term, in specific cases established by law.   Are there legitimate reasons for an employer to terminate an employment contract in Armenia? According to the Code: The employer has the right to terminate the employment contract in the following cases։ Liquidation (termination of activity) of the employer, When the number of employees is reduced. Non-compliance of the employee with the position held or the work performed. Reinstatement of the employee to the previous job. Regular non-fulfillment by the employee of the duties assigned to him by the employment contract or internal disciplinary without a valid reason. Loss of trust in the employee. Long-term incapacity of the employee (if the employee has been temporarily incapacitated for more than six months in a row or for more than 180 days during the last twelve months, excluding days of pregnancy and maternity leave). The employee being at the workplace under the influence of alcohol, drugs, or psychoactive substances. Non-appearance of the employee during the entire working day (shift) due to a disreputable reason. An employee's refusal or avoidance of mandatory medical examination. The foreigner's residence status is revoked or invalidated. an employee fails to perform his work duties for more than 10 working days (shifts) in a row or during the last three months for more than 20 working days (shifts) as a result of not being allowed to work in case of non-submission by the employee of the documents that are a necessary condition to attend work during the state of emergency declared due to infectious diseases in the Republic of Armenia or the prescribed quarantine.   What conditions must an employer meet before terminating an employment contract in Armenia? Employers are required to provide advance notice to employees before dismissal in situations outlined within the Labor Code. In the case of termination due to the liquidation (termination of activity) of the employer or when the number of employees is reduced, the employer must provide employees with two months of prior notice. In the cases of non-compliance of the employee with the position held or the work performed, reinstatement of the employee to the previous job or when the number of employees is reduced the employer may terminate the employment contract if, within the scope of available opportunities, they have offered the employee alternative work that matches their professional qualifications, skills, and health condition, and the employee has refused the offered work. If the employer does not have any relevant opportunities, the contract is terminated without offering the employee alternative work. In case of non-observance of the notice period, the employer is obliged to pay the employee damages for each overdue day of notice, which is calculated based on the employee's average daily wage.   Under what circumstances can an employer terminate an employee without prior notice? The employer is entitled to terminate the employment contract without giving notice to the employee in instances specified by the Code. These include the following cases: Reinstatement of the employee to the previous job. Regular non-fulfillment by the employee of the duties assigned to him by the employment contract or internal disciplinary without a valid reason. Loss of trust in the employee. The employee being at the workplace under the influence of alcohol, drugs, or psychoactive substances. Non-appearance of the employee during the entire working day (shift) due to a disreputable reason. An employee's refusal or avoidance of mandatory medical examination.   Are there any notification requirements? According to the Code, In the notice of the termination of the employment contract, the following are mentioned: the basis and reason for dismissal, in the case of offering another job to the employee, the name of the position, the amount of salary or the lack of possibility to offer another job. year, month, date of dismissal.   Are there any mandatory severance payment provisions upon the termination of employment? In accordance with the Code, employees have the right to receive severance payments upon termination in these cases: Liquidation (termination of activity) of the employer. When the number of employees is reduced. Non-compliance of the employee with the position held or the work performed. Reinstatement of the employee to the previous job. Long-term incapacity of the employee (if the employee has been temporarily incapacitated for more than six months in a row or for more than 180 days during the last twelve months, excluding days of pregnancy and maternity leave).   How would you define a labor dispute and how can they be resolved? A labor dispute is a disagreement between an employee or a former employee, who has previously had an employment relationship with a given employer, and the employer, which arises or has arisen during the fulfillment of rights and obligations set by labor legislation, other normative legal acts, internal legal acts, or the individual or collective labor contract. Labor disputes are subject to examination in court. Labor disputes may also be subject to mediation.   May labor disputes be referred to resolution by an arbitral tribunal? Labor disputes may be referred to an arbitral tribunal for resolution if an agreement has been concluded between the employee and the employer, or if a collective agreement provides for the possibility of referring the dispute to arbitration. An arbitration agreement does not limit the employee’s right to refer a dispute arising from the employment contract to a court, except where the arbitration agreement was concluded after the dispute arose and the parties unconditionally agreed to submit the dispute to resolution by an arbitral tribunal.   In what cases and within what time limit does an employee have the right to apply to the court?   If the employee disagrees with the modification of working conditions or the termination of employment relations, the employee has the right to apply to the court within two months from the date of receipt of the individual legal act on the modification of working conditions or dismissal, and, in cases prescribed by law, within two months from the date on which the employment contract is deemed terminated by operation of law.

The Republic of Armenia has established a sophisticated framework of state support mechanisms designed to stimulate entrepreneurship, enhance agricultural productivity, promote industrial competitiveness, and develop capital markets. Through our detailed examination of the legislative and regulatory framework, we have identified and analyzed key programs spanning multiple economic sectors, each with specific eligibility requirements, application procedures, and compensation structures. Key Legal and Regulatory Findings: Agricultural Modernization Programs: Multiple programs offer 50-75% state compensation for livestock breeding development, productivity enhancement, and infrastructure modernization, with preferential terms (0% interest rates) for disabled veterans and economic operators in border settlements Export and Industrial Support: Export insurance programs provide compensation up to 20% of customs value for duties paid in importing countries; subsidized interest rates (2-3%) available for manufacturing and supply chain diversification initiatives Capital Market Development: Comprehensive incentives for bond and share issuance provide up to 80% compensation for issuance, placement, listing expenses, and international rating agency costs Regulatory Framework: Programs incorporate international compliance standards, with specific requirements regarding credit history verification, tax liability clearance, and bank guarantee provisions Temporal Application: Most programs remain active through 2026-2029, providing medium-term certainty for business planning and investment decisions The Government of the Republic of Armenia regularly develops business support programs aimed at assisting entrepreneurs in starting and growing their businesses. The government places particular emphasis on these programs, with a particular focus on the agricultural sector. Below we present some of the state support programs and their eligibility requirements.   AGRICULTURAL SUPPORT Sheep and goat breeding development program for 2024-2028 Sheep farming in the Republic of Armenia is predominantly extensive; therefore, the program's implementation will contribute to increasing sheep and goat production volumes, improving profitability, stimulating investment in the industry, and promoting the use of modern, intensive technologies. Modern sheep farming technologies are effective when applied to animal breeds adapted to intensive technologies. The objective of the Sheep and Goat Breeding Development Program for 2024–2028 is to facilitate the acquisition (import) of high-value breeding sheep and goats with state support, the formation of highly productive herds, the improvement of the breeding and productive qualities of domestic animal breeds, and the creation of favorable conditions for the production of highly productive crossbred animals adapted to local conditions through crossbreeding. Under the program, beneficiaries have the opportunity to purchase highly productive breeding small ruminants with partial cost compensation from the state. The maximum price of one breeding animal is set as follows: Purchased within the Republic of Armenia: 300,000 AMD Imported from abroad: 450,000 AMD Before acquiring (importing) a pedigree small ruminant, the beneficiary must submit to the Ministry of Economy: an electronic application to the address [email protected], indicating the type, breed, quantity of the pedigree animals to be acquired, the place(s) of acquisition (import) and the dates, the certificates (certificates, cards) of the pedigree small ruminant subject to acquisition, and in the case of acquiring animals within the Republic of Armenia, other documents substantiating the pedigree origin for animals bred in the republic (bonitation instruction, bonitation log) 2.Information from ARCA confirming good credit history A reference (statement) regarding tax liabilities a bank guarantee for a period of one year in the amount of the difference between the total cost of the acquired animals and 10.8 million drams, if the beneficiary has imported more than 48 from abroad and has acquired more than 72 pedigree animals within the republic. Productivity increase pilot program The Productivity Increase Pilot Program is a pilot initiative, the goal of which is to improve the gene pool of beef breeds bred in Aragatsotn, Gegharkunik, Shirak, Syunik and Tavush regions during 2025-2026, increase productivity and, with the support of the Government of the Republic of Armenia, compensate for about 70% of the costs of artificial insemination of 21,970 cows. The average cost of artificial insemination of one cow with high-quality semen of bulls of dairy and meat-producing breeds that meet modern selection standards is about 15 thousand AMD. The program provides for the compensation of 10 thousand AMD of the cost of insemination from the state budget, and 5 thousand AMD will be paid by the farmer. Program for the construction or reconstruction of "Smart" livestock buildings and their technological support for 2025-2028 The main goal of the program for the construction or reconstruction of "smart" livestock buildings and their technological support is to improve conditions for keeping animals, as a result of which animal productivity indicators will increase. The program will be implemented in two components: through partial reimbursement of costs and partial subsidization of loan interest rates. Beneficiaries must choose one of the 3 proposed models: Model 1 is designed for 20–25 animals with independent housing (free movement); the construction and technological support costs for this model are set at a maximum of 30 million drams. Model 2 is designed for 40–45 animals with independent housing (free movement); the construction and technological support costs for this model are set at a maximum of 46 million drams. Model 3 is designed for 95–100 animals with independent housing (free movement); the construction and technological support costs for this model are set at a maximum of 114 million drams. Program for the development of cattle breeding in the Republic of Armenia for 2025-2029 The goal of the program is to supply pedigree cattle to entrepreneurs engaged in cattle breeding in the Republic of Armenia on affordable terms, which will allow them to replenish herds with pedigree cattle with valuable production and economic characteristics instead of animals of unknown origin, unsuitable for reproduction, and low productivity, develop pedigree work, improve the productivity of local animals through interbreeding, increase milk and meat production volumes and reduce the cost of milk and meat produced, making it more competitive compared to similar imported products. The program will be implemented in two components: through partial subsidization of loan interest rates and partial compensation for the cost of acquiring animals. The estimated cost of 1 head of pedigree cattle is 1.0 million drams. Loan interest rate: For the acquisition of pedigree cattle raised in the Republic of Armenia – 2% interest rate, For the acquisition of imported cattle – 3% interest rate, A 0% interest rate applies to the founder and individual entrepreneur of a legal entity who has become disabled as a result of combat duty or operations during the performance of military service duties, to economic operators operating in established border settlements, as well as to cooperatives operating in the agricultural sector. Slaughterhouse support program The Slaughterhouse Support Program aims to stimulate livestock slaughter at slaughterhouses, create equal competitive conditions for organizations and individual entrepreneurs (hereinafter referred to as VAT payers) who are value-added tax payers (hereinafter referred to as VAT payers), and provide support in providing the population with high-quality and safe carcasses. Participation in the program is open to any business entity that meets the eligibility criteria defined by the program. Under the program, until December 30, 2027, the business entity will receive support in the amount of 75% of the positive difference between the VAT amount calculated as the taxable base for VAT-taxable transactions on the sale of carcasses obtained from the slaughter of livestock as a result of slaughterhouse activities during the reporting period and the VAT amount deductible on the purchase of livestock. The main goal of the program is to partially compensate farms for the cost of slaughter services purchased by farms in order to stimulate the slaughter of livestock in slaughterhouses. Program for the development of industrial crab farming in the Republic of Armenia for 2024-2026 The main goal of the Program for the Development of Industrial Crab Farming in the Republic of Armenia for 2024-2026 is to contribute to the introduction of modern technologies for industrial crab farming in the republic and the promotion of local production through partial compensation of investment costs. The program proposes to establish 3 types of crab farming complexes. Small - an industrial crab farm with a total area of ​​​​460 square meters of buildings, a capacity of 6 tons, the indicative (maximum) indicator of the complex's investments and production costs is 72,000 AMD. Medium: industrial crab farm with a total area of ​​800 square meters of buildings, 12 tons of capacity, indicative (maximum) indicator of investments and production costs of the complex: 129,900 AMD. Large: industrial crab farm with a total area of ​​1000 square meters of buildings, 18 tons of capacity, indicative (maximum) indicator of investments and production costs of the complex: 183,790 AMD. Within the framework of the program, state support will be implemented in 2024-2026, by partially reimbursing 50% of the costs incurred for investments, but not more than 50% of the value set for each expense item. The program envisages the establishment of 4 small and 1 medium and one large crab farming complex each year. Greenhouse development assistance program in the Republic of Armenia The main goal of the Greenhouse Development Support Program in the Republic of Armenia is to promote the expansion of greenhouse area, production, and export volumes in the country, enhance the competitiveness of products, and increase farmers' incomes in agriculture by providing farmers with affordable, state-supported credit. The program will be implemented from 2023 to 2026 and will cover all regions of the Republic of Armenia. The program's terms and conditions include: a greenhouse construction loan of up to 15.0 billion drams per beneficiary (equivalent to the construction of a greenhouse of approximately 20 hectares), with no maximum area limitation for the greenhouse constructed. The area of ​​each greenhouse constructed by each beneficiary must be 1 hectare or more. The interest rate on the loan is subsidized: For the portion of the loan amount up to and including AMD 3 billion – by 10 percentage points, For the portion of the loan amount over AMD 3 billion and up to and including AMD 9 billion – by 9 percentage points, For the portion of the loan amount over AMD 9 billion and up to and including AMD 15 billion – by 8 percentage points. The interest rate on the loan provided to each beneficiary is subsidized in an amount not exceeding the interest rate on the loan provided by the financial institution. The maximum loan repayment term is 8 years. At the beneficiary's request, the financial institution may establish a grace period for repayment of the principal and interest on the loan, but not more than 12 months. By mutual agreement between the beneficiary and the financial institution, the financial institution may establish grace periods for repayment of principal and interest on the loan for up to 3 months per year. The maximum greenhouse construction period is 1.5 years. Up to the maximum loan amount, each beneficiary must borrow from only one financial institution. Agricultural equipment leasing support program in the Republic of Armenia The main goal of the program is to provide agricultural enterprises with agricultural machinery on affordable terms, in particular through leasing mechanisms, in order to create favorable conditions for the effective use of agricultural land and the organization of commodity production. Within the framework of the program, the following agricultural machinery will be provided to enterprises: tractors of various brands, combines, combine harvesters, seed drills, plows, mowers, potato planters, potato diggers, cultivators, milling cutters, sprayers, tractor trailers, other agricultural machinery. The terms of the program are: The annual leasing interest rate is 2%, and for entrepreneurs operating in the territories of border settlements receiving social assistance approved by the Resolution of the Government of the Republic of Armenia No. 1444-N of December 18, 2014, and for citizens who have become disabled as a result of combat duty or operations during the performance of military service duties, the leasing interest rate subsidy will be implemented in such an amount that the annual leasing interest rate payable by the lessee is 0%, The advance payment is 20% of the purchase price of the leasing object, The leasing repayment period is: For combines: 7-10 years, For tractors: 5-6 years, For seeders, combine-harvesters: 3-6 years, For other agricultural machinery: 3 years, In addition, tractors and other agricultural machinery can be leased to the same lessee at the same time in this case, the repayment period can be set at 5-6 years. Grace periods may be set for the payment of the lease principal and interest for a period of up to 6 months per year. Program for Subsidizing Interest Rates on Loans Provided to the Sector for the Purpose of Procurement (Purchase) of Agricultural Raw Materials The main goal of the program for subsidizing interest rates on loans provided to the sector for the purpose of procurement (purchase) of agricultural raw materials is to increase the level of accessibility of credit and ensure the payment of the cost of the procured raw materials in a short period of time through subsidizing the interest rates on targeted loans provided to legal entities and individual entrepreneurs operating in the territory of the republic, which procure agricultural raw materials. Within the framework of the program, loans are provided for the following purposes: purchases of fruits and vegetables and the acquisition of glass jars, lids, aseptic bags and their containers used in the production of canned fruits and vegetables, purchases of grapes, purchases of milk, purchases of agricultural animals by slaughterhouses, purchases of chinchillas. Within the framework of the program: The maximum interest rate on loans provided is not set. The part (amount) equivalent to 9 percentage points per annum of the loan interest rate will be subsidized, and for economic operators operating in the territories of border settlements receiving social assistance and procuring and processing agricultural raw materials in the same places, approved by the Resolution of the Government of the Republic of Armenia No. 1444-N of December 18, 2014, the part (amount) equivalent to 12 percentage points will be subsidized. The amount of loans provided to each borrower carrying out cold storage and export activities for the purpose of procurement (purchase) of fruits, vegetables and grapes is calculated based on the agricultural raw material purchase contracts that were signed before October 1 of the given year. The amount of loans provided for the purpose of grape procurement (purchase) is calculated based on the agricultural raw material purchase contracts concluded before August 1 of the given year, and the amount of the loan provided in 2025 is calculated based on the contracts concluded before September 1, 2025. The amount of loans provided for the purpose of fruit and vegetable procurement (purchase) is calculated based on the agricultural raw material purchase contracts concluded before October 1 of the given year. Each borrower carrying out processing activities may be provided with a loan of up to 4.0 billion drams each year for the purpose of grape procurement (purchase). The balance of the principal amount of loans provided to each borrower carrying out processing activities for the purpose of fruit and vegetable procurement (purchase) cannot exceed 3.0 billion drams. The principal balance of loans provided to each borrower engaged in processing activities for the purpose of milk procurement (purchase) may not exceed 1.0 billion drams. The principal balance of loans provided to each borrower engaged in cold storage and export activities for the purpose of fruit and vegetable and grape procurement (purchase) may not exceed 3.0 billion drams. Loans provided to each borrower engaged in slaughterhouse activities for the purpose of agricultural animal procurement are calculated based on the area of ​​the slaughterhouse, not more than 2.0 million drams for an area of ​​15 square meters, and not more than 5.0 million drams for a mobile slaughterhouse. The principal balance of loans provided to each borrower engaged in chinchilla fur export activities for the purpose of chinchilla procurement may not exceed 50.0 million drams. Loans for purchases (procurements) by the same borrower for the above-mentioned purposes are provided on the basis of separate applications, and in the case of loans provided for the above-mentioned purposes, a loan of the maximum amount specified may be provided for one of them at the borrower's choice, and the amounts of loans provided for other purposes shall not exceed 50 percent of the maximum amount of loans specified for the given purpose. The model grape purchase contract provided in Form N 4 of the program is accepted as the basis for concluding contracts for the purpose of grape purchases (procurements) and cold storage and export activities. The model harvest purchase contract provided in Form N 5 of the program is accepted as the basis for concluding contracts for the purpose of fruit and vegetable purchases (procurements) and cold storage and export activities. The model milk purchase contract provided in Form No. 6 of the program is used as the basis for concluding contracts for milk procurement (purchases). Within the framework of the program, loans for the purpose of procurement (purchase) of cattle by slaughterhouses until December 30, 2026 are provided with a repayment period of up to 1.5 years, are subsidized by 9 percentage points, and the grace period for repayment of the principal amount will be calculated no more than 6 months from the moment of granting the loan. The loan amount will be calculated based on the area of ​​the slaughterhouse, not more than 0.2 million drams per 1 sq. m. area, and for a mobile slaughterhouse - not more than 5.0 million drams. The balance of the principal amount of loans provided to each beneficiary cannot exceed 20.0 million drams, and for a mobile slaughterhouse - 5.0 million drams. The loans provided have a maximum: 3 years of repayment and a 12-month grace period for loans provided for the purpose of grape procurement (purchase), 1.5 years of repayment and a 6-month grace period for loans provided for the purpose of agricultural raw materials procurement (purchase) other than grapes.   PROGRAM FOR PROVIDING ASSISTANCE FOR THE PURPOSE OF EXPORT PROMOTION On January 23, 2025, the RA Government adopted Resolution No. 98-N “On Approving the Program for Providing Assistance for the Promotion of Exports,” according to which resident organizations of the Republic of Armenia and individual entrepreneurs registered in the Republic of Armenia are provided with assistance in the amount equivalent to the amount calculated at the customs duty rate established for that product in accordance with the legislation of the importing country in event of expert goods originating in the Republic of Armenia to a member state of the European Union, the United Kingdom of Great Britain and Northern Ireland, and Canada. Mandatory requirements: The export must be to a member state of the European Union, the United Kingdom of Great Britain and Northern Ireland, or Canada. The exported product must be a product (good) of the manufacturing industry (classifier of the type of economic activity: C) (except for: TGDTD C 12, TGDTD C 19, TGDTD C 24, TGDTD C 32.1), the country of origin of which is the Republic of Armenia. For the purposes of the program, products of aluminum foil production from C 24.2, C 24.42.0 and products of aluminum laminated foil production from aluminum foil as the main component, the country of origin of which is the Republic of Armenia, are also considered goods. Export from the Republic of Armenia must be carried out under the "Export" or "Re-export" customs procedure. The exporter must not have been subject to a tax authority’s decision to levy tax liabilities of one million drams or more on income controlled by the tax authority within 365 days prior to the date of submission of the application, and the exporter must not have overdue liabilities on income controlled by the tax authority as of the date preceding the date of submission of the application. An application must be submitted to the Ministry of Economy of the Republic of Armenia within six months after the end of the export process of the goods (the date the goods crossed the state border of the Republic of Armenia). Documents to be submitted: In order to receive compensation, the applicant submits an application to the Ministry of Economy of the Republic of Armenia, attaching the following documents: export customs declaration (in the case of goods of Armenian origin imported under the "processing in the customs territory" procedure and subsequently exported under the "re-export" procedure, documents certifying the cost of the processing service for the purpose of obtaining these goods (invoice, document certifying the supply of goods to a non-resident (invoice), contract, etc.), copies of the invoice, export contract concluded between the importing and exporting parties and other documents certifying the export, copies of import declarations, confirming that the copies correspond to the original. copy of the document certifying the origin of the Republic of Armenia of the exported goods, confirming that it corresponds to the original. copy of the certificate certifying the state registration in the State Register of Legal Entities Agency of the Ministry of Justice of the Republic of Armenia. bank account number. statement. other information at the request of the applicant. In case of compliance of the documents, a contract is signed with the beneficiary. The amount of compensation provided to the beneficiaries within the framework of the program: The amount of assistance provided is the amount calculated in accordance with the customs duty rate established for that product by the legislation of the importing country after the export of the product, if the zero-customs duty rate is not established for the product in the importing country. Moreover, if the customs duty rate established for any product in the importing country is more than 20%, then the 20% rate is the basis for calculating the amount of assistance. The basis for calculating the amount of assistance provided is the customs value of the goods declaration of the exporting country (in the case of goods of Armenian origin imported under the "processing in the customs territory" procedure and subsequently exported under the "re-export" procedure, the cost of the processing service for the purpose of obtaining these goods) and the amount calculated at the rate of customs duty actually applied in the country of import. Moreover, if the amount calculated at the customs value of the goods declared in the exporting country and the amount calculated at the rate of customs duty actually applied in the country of import is greater than the amount calculated at the customs value of the goods declared in the importing country and the amount calculated at the rate of customs duty actually applied in the country of import, then the compensation shall be granted in the amount of the minimum of them. The program is valid for exports made until December 31, 2026 inclusive. STATE SUPPORT MEASURE FOR SUPPLY CHAINS DIVERSIFICATION FOR TEXTILE SECTOR ORGANIZATIONS The purpose of the measure is to promote the diversification of raw material imports for textile sector organizations. Support is provided to economic operators for the import of raw materials from China, India, Italy, Uzbekistan, South Korea, Bangladesh, Turkmenistan, Tajikistan and the Islamic Republic of Iran. in the form of interest rate subsidies on loans received from banks or credit organizations operating and licensed in the territory of the Republic of Armenia. Scope of beneficiaries: In the context of the “Targeted measure of state support aimed at ensuring diversification of supply chains for textile sector organizations” (hereinafter referred to as the measure), a beneficiary is a commercial and non-commercial organization or individual entrepreneur registered in the Republic of Armenia, at least 80% of whose turnover, calculated for each reporting period during the 365 days preceding the date of submission of the application, is derived, from the types of economic activity defined by the classifiers C(SI)13 “Manufacturing of textile products” and C(SI)14 “Manufacturing of clothing” of the Classifiers of Types of Economic Activity C(SI) “Manufacturing INDUSTRY” section, approved by the Order of the Minister of Economy of the Republic of Armenia No. 874-N of September 19, 2013. The economic operator has exported from the Republic of Armenia, under the “Export” customs procedure, goods originating in the Republic of Armenia from the types of economic activity defined in the C(SI)13 and C(SI)14 classifiers of the C(SI) section during the 365 days preceding the date of submission of the application, and must not have a tax authority decision on tax liabilities of one million drams or more on income controlled by the tax authority during the 365 days preceding the date of submission of the application, and must not have overdue liabilities on income controlled by the tax authority as of the day preceding the date of submission of the application. The beneficiary of the measure may receive support under this measure only once. For the purposes of the event, raw materials are considered to be “Resources” defined by Order No. 235-N of the Minister of Finance and Economy of the Republic of Armenia dated March 11, 2010. Applications to become a beneficiary of the measure can be submitted until November 16, 2026. The measure will run until December 30, 2026. STATE SUPPORT PROGRAM FOR ISSUANCE AND RATING The State Support Program for Issuance and Rating is aimed at injecting new impetus into the capital market of the Republic of Armenia and increasing financing flows to the real sector of the economy. Scope of Beneficiaries Within the framework of the instrument for support for the issuance, placement and listing of bonds on the stock exchange, a beneficiary is considered a commercial organization registered and actually operating in the territory of the Republic of Armenia, which, after the entry into force of this program, has listed the bonds issued by it on the stock exchange operating in the Republic of Armenia, if these bonds are denominated in drams, have been issued with a circulation period of at least 36 months, have been placed through a public offering, and these bonds have a market maker after listing. Within the framework of the instrument for assistance in the issuance, placement and listing of shares, a beneficiary is considered a commercial organization registered and actually operating in the territory of the Republic of Armenia, which, after the entry into force of this program, has issued, placed and listed the shares issued by it on a stock exchange operating in the Republic of Armenia, if the given issue of shares was placed through a public offering. The program proposes to implement the following measures: Support for the placement and circulation of bonds issued in drams, with a maturity of at least 36 months at the time of issuance and listed on the stock exchange after the measure enters into force, in the following amounts: for the issuance, placement and listing of bonds - in the amount of 2 percent of the nominal volume of the placement, but not more than 30 million drams, for the circulation of bonds - in the amount of three percent of the nominal volume of the placement for the first three years, but not more than 45 million drams for each 12 months of circulation, For the issuance of shares - expenses for external audit, banking and stock exchange services related to the issuance, placement and listing on the stock exchange. Moreover, assistance for placement and listing on the stock exchange is provided to each beneficiary only once in the amount of 80% of the expenses incurred and substantiated by relevant documents. Subsidy of 50% of the first year's expenses for obtaining and maintaining a rating from international rating agencies; however, in the case of listing on a stock exchange operating in the Republic of Armenia, a subsidy of up to 80% of the first year's expenses (30% in addition to the previous 50%), if the requirements stipulated in paragraph 2 of the appendix to the draft regarding bonds are met. Within the framework of the instrument for reimbursement of the costs of obtaining and maintaining a rating from international rating agencies for the first 12 months, a beneficiary is a commercial organization registered and actually operating in the territory of the Republic of Armenia, which, after the entry into force of this program, has received an international rating from any of the international rating agencies "Fitch", "Moody's", "Standard & Poor's" or "Scope Ratings" that is no less than two notches lower than the sovereign rating of the state. Financial organizations licensed by the Central Bank of the Republic of Armenia, persons carrying out regulated activities in the field of public services within the meaning of the Law of the Republic of Armenia "On the Public Services Regulatory Body", as well as subsoil users within the meaning of the Law of the Republic of Armenia "On the Subsoil Code of the Republic of Armenia", cannot be beneficiaries under this program, nor can beneficiaries of the program for assistance in the issuance, placement and listing of shares on the stock exchange be financial organizations licensed by the Central Bank of the Republic of Armenia. In order to receive assistance, the beneficiary must submit a written application electronically to the Ministry of Economy of the Republic of Armenia, attaching documents confirming the information contained in the application, as well as documents substantiating the actual expenses incurred.  

1. Legal Framework The regulatory framework governing construction activities in the Republic of Armenia is structured on a hierarchical basis, with legislation and sub-legislative acts forming the foundational layers. At the statutory level, the Law on Urban Development provides the substantive foundations for spatial planning, design, construction. This law is supplemented by the Civil Code, the Land Code, as well as a number of Government decisions and secondary regulations. Of particular importance is Government Decision No. 596-N dated 19 March 2015, titled “On Establishing the Procedure for Issuance of Permits and Other Documents for Construction in the Republic of Armenia, and on Annulment of Certain Government Decisions.” This Decision prescribes the procedural rules for architectural-planning assignments, construction permits, extensions, completion acts, and occupancy permits, and it is supplemented by Annexes that define document forms, expertise procedures and the categorisation of construction objects. Technical norms and standards are issued by the Urban Development Committee (UDC), which ensures that projects meet seismic, fire-safety, and other technical requirements. 2. Institutional Responsibilities 2.1 Municipal Authorities Municipalities (community heads and mayors) are the primary permitting authorities. Acting under the Law on Urban Development and Decision No. 596-N, they are empowered to: issue architectural-planning assignments; grant construction permits; extend existing permits; issue completion certificates; and provide occupancy permits. 2.2 Urban Development Committee (UDC) The UDC develops policy, issues technical regulations, and maintains registers of licensed specialists. It also plays a methodological role in ensuring consistent application of Decision No. 596-N and related rules. 2.3 Inspectorate for Urban Development, Technical and Fire Safety This Inspectorate monitors compliance with safety and technical norms on construction sites. It has authority to suspend works for serious violations and — following recent amendments — may conduct intensified inspections for certain state-funded or higher-risk projects. 3. Digitalisation of Permitting Since 1 January 2025, all applications regulated under Decision No. 596-N (architectural-planning assignments, construction permits, completion certificates, occupancy permits, etc.) must be submitted exclusively online through the government platform [urban.e-gov.am]. The electronic system standardises submission, integrates checks against national registers, and issues electronic permits bearing official digital signatures. 4. Permitting Procedure under Decision No. 596-N The procedure consolidated in Decision No. 596-N follows a structured sequence: Verification of land rights and zoning — the applicant must demonstrate title or other legal basis for use of the land and compliance with planning designations. Architectural-Planning Assignment (APA) — prior to issuing the design permit, the municipality secures technical conditions from relevant utility providers (water, electricity, gas, telecommunications) and issues the APA, which defines principal design parameters (height, density, siting, permitted uses). Preparation of design documentation — on the basis of the APA, the developer engages licensed professionals to prepare the design; certain projects require mandatory state technical, seismic or fire-safety expertise and/or environmental expertise. Construction permit — submitted electronically with the required attachments; the municipality reviews and issues the permit (or refuses it) within the timeframes prescribed by Decision No. 596-N. Construction stage — works are implemented under licensed supervision and are subject to inspection by the Inspectorate. Completion and commissioning — upon completion the municipality issues a completion certificate and subsequently an occupancy permit; use of the building without these documents is not lawful. 5. Required Documentation Decision No. 596-N and its Annexes prescribe the documentation generally required, which typically includes: title or lease documents, the architectural-planning assignment, approved project documentation, any required expert opinions, construction site safety plans, and proof of payment of applicable fees. The exact checklist differs according to project category and location. 6. Classification of Construction Objects and Its Implications (a) Statutory basis and Annex structure. Decision No. 596-N organises construction objects by risk categories and delegates to its Annexes the concrete lists and procedural consequences. Annex N4 to Decision No. 596-N sets out the categorisation of objects by risk; Annex N2 regulates the forms and types of expert examination; Annex N3 governs electronic permitting. (b) The five-category system (I–V): Pursuant to Annex N4 and the implementing guidance, construction objects are classified into five categories according to scale, complexity, function, and potential risk to persons and environment: Category I — Low risk. Includes small-scale works such as current repairs, interior finishing, landscaping and similar works that, by their nature, do not require a design permit or full design documentation. Certain Category-I activities may be performed without formal permitting or only by notification, in accordance with the lists in Annex N4. Category II — Medium risk. It consists of relatively simple building projects that remain limited in scope and complexity (Annex N4 contains specific quantitative limits and types). For many Category-II objects, the statutory regime permits the replacement of a full expert review with a written assurance in place of expertise․ Category III — Medium-high risk. Covers objects of greater complexity where a simple expert examination is required (as prescribed in Annex N2). Category IV — High risk. Includes technically complex or larger-scale objects that demand comprehensive expert examination and intensified technical and supervisory control. Category V — Highest risk. Includes projects of exceptional danger, technical complexity, or strategic/state importance. For Category-V objects the Government determines the procedural specifics (including the technical brief and timelines), and such projects are subject to the strictest expertise and supervisory regime under the decision. (c) Practical implications by category. Expert examination: The type and scope of required expertise are category dependent. Category II projects may rely in part on contractor warranties; Category III normally requires simple expert review; Category IV requires comprehensive (complex) expertise; Category V design documents are subject to special comprehensive expert examination, and for which the conditions and timeframes for issuing construction permits shall be determined, in each individual case, by a decision of the Government of the Republic of Armenia.  

Introduction: The startup ecosystem thrives on innovative financing mechanisms that balance the needs of investors and entrepreneurs. One such instrument that has gained significant traction is the Simple Agreement for Future Equity (SAFE). Originating in the United States, SAFEs have revolutionized early-stage financing by offering a streamlined and flexible alternative to traditional equity investments and convertible notes. This article examines the introduction of SAFE agreements in Armenian legislation, comparing it with the established practices in the United States. Understanding SAFE Agreements: A SAFE is an agreement between an investor and a company that provides rights to the investor for future equity in the company, similar to a warrant. The key feature of a SAFE is that it converts into equity upon the occurrence of a specific event, usually a future financing round. Unlike convertible notes, SAFEs do not accrue interest or have a maturity date, making them simpler and more entrepreneur-friendly. Current situation The Armenian startup ecosystem has been growing steadily, with increasing interest from both local and international investors. However, Armenian start-ups are frequently forced to relocate their business ideas to other legislations, which provide more flexible and investor friendly environment. The investors are regularly interested in making investment in start-ups using SAFE, which introduces three major features: Conversion Trigger: SAFEs convert into equity upon the occurrence of a specific event, typically a subsequent priced equity financing round; Valuation Cap and Discount: These terms provide a mechanism to set the price at which the SAFE converts into equity, protecting the investor from excessive dilution; No Interest or Maturity Date: Unlike convertible notes, SAFEs do not accrue interest or have a maturity date, reducing the financial burden on the startup. Introduction of SAFEs in Armenia: In June 2024 SAFEs were introduced in the legislation of the Republic of Armenia, more specifically in the law on Joint Stock Companies. A major point of the regulation is that SAFE agreements are considered as securities as per legislation of the Republic of Armenia, which consequently shall result in the unified custody of SAFEs. Account operators of the companies shall be deemed to make the record of SAFEs which will ensure that the investors may receive participation in the companies as the result of occurrence of certain events. In addition pre-emptive rights of shareholders do not apply to SAFEs. The advantage of this option will ensure that new investors shall be required the waiver of pre-emptive rights prior to subscription of the newly issued shares of the companies, where they have invested. Moreover, SAFEs provide additional attractiveness for the companies, as in general SAFEs are subscribed as interest-free, which does not incur additional expenses in the way of payment of interest for companies, which may be crucial for startups and newly developed companies. Author: Aleksandr Egibyan (Mr.) Junior Partner, Legelata Legal And Tax DISCLAIMER: This material is produced for Legelata LLC. The information contained in this piece is provided for general informational purposes only and does not contain a comprehensive analysis of each item described. Prior to undertaking (or not to undertaking) any actions, the reader is advised to seek professional advice tailored to their specific situation. Legelata or the author accepts and holds no liability for acts or omissions taken in reliance upon the contents of the contained information in this material.