BY ANUSH HOVSEPYAN
As a Diaspora Armenian living outside Armenia, how well do we know what is actually happening in the Armenia? At a distance, we shy away from the unknown, often missing opportunities in our native land.
What is happening now, when our independent state of Armenia has turned 21? Now we hear success stories of the most dynamically growing local companies such as Ameria, SAS, in additon to foreign telecomunications companies, such as Orange and VivaCell, making the most of Armenia’s emerging markets. Ameria Group of Companies, co-founded by Diaspora Armenians, started with only $100,000 initial captial investment and now has grown to more than $600 million in assets. All that is great, but what if you are just a private investor and you are mostly concerned with simple yet important questions, such as: “How are business disputes resolved between a foreign investor and an Armenian citizen? Do the contracts in Armenia have an international arbitration clause? If so, how are they enforced?”
David Sargsyan, Director of Ameria Legal Practice and a Partner at Ameria Group of Companies, in this interview, addresses these very issues that every Armenian at least should be clear about.
ANUSH HOVSEPYAN: How favorable is the foreign investment law in Armenia? Are there guarantees that foreign investments won’t be seized by government entities?
DAVID SARGSYAN: I can say for certain that laws in Armenia are of proper quality and do provide property protection to investors. In fact, we have one of the oldest laws among former Soviet Union countries, adopted at the beginning of the independent Armenian State, aimed at protecting foreign investments in Armenia. There is a clause that protects foreign investments from negative changes in the law. The Law on Foreign Investment adopted in 1994 provides guarantees against nationalization and seizure of invested resources. It specifically states: “The legal regime governing foreign investments and the methods of their implementation in the Republic of Armenia cannot be less favorable than the regime governing the property, property rights and investment activities of citizens, legal entities and unincorporated enterprises of the Republic of Armenia. Aiming to encourage foreign investments in the essential social and economic spheres of the Republic of Armenia, the Armenian legislation may define supplementary privileges for foreign investors. Foreign investments in Armenia may not be subject to Nationalization”
A.H.: How can I structure my business to be protected under English Law?
D.S.: It is essential to understand that with the help of professionals you can structure the business under a relevant partnership arrangement that does provide protection under English law and through arbitration. Armenia is a party to the New York convention and many bilateral treaties. The arbitration awards are recognized and implemented in Armenia. Therefore, Ameria structures all of its investment related agreements in a way that we either have ad-hoc arbitration or we go to prominent arbitration forums outside Armenia that are implementing relevant arbitration awards in Armenia.
A.H.: The laws may be great, but what about the rule of law and corruption?
D.S.: I am not saying that there is no corruption or nepotism in Armenian daily life. In my opinion, all that is decreasing though, maybe not at the desirable speed, but there is a change. We, as advisors, provide a range of services from green field establishment of the company all the way to ongoing legal and management advisory services to the companies. In doing so, we see a change and progress toward proper business environment in Armenia. If you go through World Bank’s rankings on the ease of doing business, you will see Armenia is ranked quite high when it comes to starting or registering a business in Armenia. Investors just need to use professionals that know the market and have a proven track record, to mitigate the risks just like in any other country.
A.H.: How efficient is the partnership between the Diaspora and Armenia based on your practice?
D.S.: Ameria Group of Companies serves as an investment bridge for investors in Armenia who would like to venture outside Armenia and for investors in the Diaspora that would like to take advantage of investment opportunities that exist in Armenia’s emerging markets. Ameria has a representation in Los Angeles, CA, connecting investors to the best professionals in Armenia be it for management advisory services, audit, accounting or legal services.
Attorney at Law David Sargsyan has more than 13 years of experience in legal practice, specialized corporate, securities, banking and civil law in Armenia. Ameria Legal with its 15 lawyers under David Sargsyan’s leadership provides comprehensive legal support needed for successfully establishing, structuring and managing a business overseas through the highest quality of representation, mitigating the risks of running a business in Armenia and securing high return on investments. Sargsyan has a Master of Arts in Political Science and International Relations from AUA & LL.M. (Cum Laude) Master of Laws International Law from Notre Dame Law School.