ARMENIA Trends and Developments Contributed by: Mesrop Manukyan, Anahit Sargsyan, Maria Petrosyan and Ani Avetikyan, MB Legal
Furthermore, the reforms address systemic corporate governance failures that previously left minority inves - tors with little recourse. A buyback right is now trig - gered if a company fails to convene an annual general meeting or approve essential financial reports and div - idend distributions for at least three out of the last five years. Protection is also extended to cases where a shareholder is simply not notified of the annual meet - ing. Investment liquidity for minority holders is further secured through new rules regarding dividend distri - butions. If a company fails to distribute dividends for at least five out of the last ten years, or if the distrib - uted amounts are considered insignificant compared to the market yield based on net asset value, minority shareholders may exit the company via a mandatory buyback. This ensures that capital is not trapped in unproductive or unfairly managed entities. Significantly, it removes the traditional fiscal barrier to these specific protections. While standard share buybacks are typically capped at 10% of a company’s net assets, this limit does not apply when the buyback is triggered by these new minority protection grounds. To ensure fairness in the exit process, the law man - dates that the share price must be determined by a qualified evaluator meeting strict government criteria, providing an objective basis for the transaction. Strengthening the Regulatory Oversight: The Competition and Consumer Protection Commission An important shift in Armenia’s regulatory environment occurred in 2025 with the significant expansion of the mandate of the autonomous regulatory body, now renamed the Competition and Consumer Protection Commission. This reform establishes the Commission as the jurisdiction’s central authority for the protec - tion of consumer interests, moving beyond its tradi - tional focus on market competition. It now possesses explicit powers to prevent and eliminate practices that harm either consumer groups or an indefinite range of consumers. A core component of this reform is the introduction of a dedicated legal framework for addressing offences against consumer interests. This includes the regula -
tion of unfair commercial practices, misleading adver - tising, and systemic violations of mandatory trade and service rules. The Commission is now empowered to evaluate these practices against international princi - ples of integrity, honesty, and fair dealing to ensure a balanced marketplace. To increase administrative efficiency, the updates introduced simplified proceedings for specific retail violations. For example, if a business fails to comply with mandatory price display rules, the Commission’s General Secretary can issue a formal notification. This procedure allows the business to rectify the issue and pay a nominal fixed penalty, thereby avoiding a full- scale administrative inquiry while ensuring rapid com - pliance. Furthermore, the Commission’s enforcement toolkit has been enhanced with the ability to impose signifi - cant financial penalties for more serious infractions. Fines for unfair competition or consumer-related offences can now be calculated as a percentage of the entity’s annual turnover, reaching up to 5% or 10% depending on the nature of the violation. This ensures that sanctions remain proportional and act as a genu - ine deterrent for large market participants. The reforms also prioritise international co-operation in the field of consumer protection. The Commis - sion is now explicitly authorised to collaborate with international organisations and foreign state bodies to exchange information and implement global best practices. For international businesses, this means that Armenia’s consumer protection standards are increasingly converging with those of its European and regional partners. European Union Accession On 26 March 2025, Armenia’s National Assem - bly adopted the Law on Launching the Process of Armenia’s Accession to the European Union. For for - eign investors, this carries three immediate practical implications regarding the stability and future of the Armenian legal framework. The direction of Armenian regulatory reform is now predictable in a way it has never previously been. Businesses familiar with EU- standard frameworks in corporate governance, data protection, competition law, and procurement can
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