ARMENIA Law and Practice Contributed by: Varoujan Avedikian, Tamara Martirosyan, Sofya Sargsyan and Larisa Gevorgyan, Andersen Legal
tected and must be honoured, a factor that can theo - retically impact post-merger integration plans. 10.2 Employee Compensation In Armenia, employee compensation is built on a foun - dation of direct non-cash payments, as outlined by the Labor Code. The total salary an employee receives may consist of a fixed base salary for fulfilling their core job responsibilities and additional remunera - tion for extra work, overtime work or work performed under special conditions, or as a motivational instru - ment at the discretion of the employer. This secondary component includes variable payments such as per - formance bonuses, supplements or other incentives, which are determined by law, employment agree - ments or internal company policies. Beyond this standard structure, Armenian law allows joint-stock companies to offer equity-based compen - sation (employee stock options). These companies have the option to create employee share ownership programmes, where they can grant the staff company shares or related financial instruments. This provides a powerful tool for aligning employee interests with long-term company success. Employers are also required to make regular contribu - tions to the state social security system, which funds employees’ future retirement pensions. 10.3 Employment Protection Under Armenian law, an acquisition or change of con - trol does not automatically alter existing employment relationships. Employees continue their roles with the same legal entity, and their contractual rights and ben - efits remain unchanged. Consequently, a change in ownership alone does not trigger any statutory right to severance pay or a notice period. However, employment can be impacted if the transac - tion leads to a corporate reorganisation that involves a reduction in staff or positions. In such cases, the employer is legally required to provide employees with at least two months’ written notice and must pay sev - erance equivalent to one month’s average salary upon termination.
While Armenia does not mandate works councils or specific collective bargaining procedures to com - plete an acquisition, existing collective agreements are protected. A single collective agreement remains valid through its term or until a new one is negoti - ated. If a reorganisation merges entities with multiple agreements, those are terminated. A new, consolidat - ed agreement must then be established within two months, ensuring its terms are no less favourable than the previous ones. 11. Intellectual Property and Data Protection 11.1 Intellectual Property Considerations for Approval of FDI While there is no law that makes FDI approval directly dependent on IP considerations, the RA Law on For - eign Investments highlights the importance of pro - tecting intellectual and industrial property for foreign investors. In practice, the Ministry of Economy works with the Intellectual Property Agency (IPA) to determine if a pro - posed investment involves technology transfer, inno - vation or proprietary rights that need to be registered or licensed in Armenia. This is especially important in areas like information technology, creative industries and engineering, where the investment’s value often relies on patent rights or software protection. Armenia’s IP framework is harmonised with interna - tional obligations under the World Trade Organiza - tion’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, World Intellectual Property Organization (WIPO) treaties and the EU–Armenia Comprehensive and Enhanced Partnership Agree - ment (CEPA). IP review does not operate as a “screen - ing filter” in itself, but due diligence is conducted to ensure compliance with competition, data security and export control laws when foreign investment involves high-value intangible assets. 11.2 Intellectual Property Protections Armenia is generally considered to provide strong statutory protection for IP rights. The basic legal framework includes the Civil Code (Chapters 62, 63
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