ARMENIA Trends and Developments Contributed by: Mesrop Manukyan, Anahit Sargsyan, Maria Petrosyan and Ani Avetikyan, MB Legal
Furthermore, the amendments clarify the corporate approval processes required for issuing such instru - ments. Boards and shareholder meetings now have clear guidelines on how to authorise convertible loans and manage subsequent equity increases. This added transparency meaningfully reduces the risk of legal challenges to financing rounds and cap table management – a risk that, in our experience, was a genuine deterrent for foreign venture investors prior to this reform. For foreign investors, this reform brings Armenian corporate law significantly closer to inter - national best practices, and we expect it to be a key reference point as Armenia continues to position itself as a venture-friendly jurisdiction in the region. Comprehensive Gambling Sector Reform The Armenian gambling landscape underwent a fun - damental transformation with the enactment of the Law on Regulation of Gambling Activities in 2024, set to enter into force by the end of 2026. This reform is designed to move the sector away from legal ambigui - ty and into a highly controlled, electronic management framework. Central to this shift is the appointment of a “Gambling Sector Regulation Operator” tasked with implementing a centralised monitoring system. This system provides real-time oversight of bets, pay - outs, and player activities, significantly enhancing the state’s ability to combat money laundering and ensure fair play. In our view, this centralised oversight model signals a clear policy intent: Armenia is positioning itself to retain gambling as a legitimate revenue- generating sector while closing off the compliance and reputational risks that have historically made the industry difficult for institutional investors and banks to engage with. The new regulatory regime places a significant empha - sis on “Responsible Gaming” to mitigate the social risks associated with gambling. It introduces man - datory player identification in a “designated” lobby before entry into any physical gambling hall is permit - ted. The legislation also establishes strict age thresh - olds, requiring participants to be at least 21 years of age for casino and internet games, and 18 years for lotteries. Furthermore, the law enables citizens to vol - untarily restrict their own participation or allows family members to seek a court-ordered restriction for those in financial distress. For operators, we expect these
requirements to translate into a material compliance build-out – identification systems, age-verification infrastructure, and self-exclusion registries will need to be operational well before the 2026 deadline, and businesses should begin budgeting for this now rather than treating it as a late-stage implementation step. Territorial restrictions continue to be a primary tool for regulating physical gambling locations, confining casi - nos to specific zones such as Jermuk, Tsaghkadzor, and Sevan. An innovative exception exists for large- scale investment projects approved by the govern - ment that exceed AMD40,000,000,000. Such projects may be permitted to operate gambling facilities in oth - er locations, provided they meet rigorous criteria. In our assessment, this carve-out is a deliberate lever to attract major resort-scale capital – it effectively trades geographic flexibility for significant committed invest - ment, which should be of particular interest to large international gaming and hospitality groups evaluat - ing entry into the Armenian market. This balanced approach aims to leverage the sector for economic growth while maintaining strict social safeguards and geographic control. Enhanced Protections for Minority Shareholders A landmark development in Armenian corporate law introduces new safeguards for minority sharehold - ers within the Law on Joint-Stock Companies. This legislation significantly expands the rights of non- controlling shareholders to demand that a company purchase their shares at a fair market price. These “buyback” rights are now triggered by a broader range of circumstances designed to prevent the marginalisa - tion of small investors by dominant interests. The amendments provide critical protection against the “controlling shareholder”, defined as an individual or group acting in concert that holds 50% or more of the voting shares. Shareholders can now demand a buyback if the actions or inactions of the company or a controlling shareholder result in obvious disad - vantageous consequences for them. This specifically includes instances where a controlling shareholder receives a disproportionate advantage at the expense of non-controlling participants.
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