ARMENIA Law and Practice Contributed by: Narine Beglaryan and Anahit Aloyan, Concern Dialog
2. Regulatory Environment 2.1 Restrictions on Technology Transactions or Outsourcing Armenia does not have cross-sector legislation spe - cifically regulating outsourcing. Instead, restrictions arise under sectoral laws in regulated industries (see 2.2 Industry-Specific Restrictions ). Outsourcing arrangements in the public sector may also be pre - scribed by law, particularly where state functions or services are delegated. The principal legal considera - tions relate to data protection and information security requirements (see 2.3 Restrictions on Data Process- ing or Data Security ). 2.2 Industry-Specific Restrictions In Armenia, outsourcing and technology transactions are subject to sector-specific regulation, particularly in the banking, insurance and healthcare sectors. In the banking sector, outsourcing of both core and ancillary operations is permitted, provided that where the outsourced activity requires a licence, the contrac - tor itself holds the relevant authorisation. Outsourc - ing such activities is subject to prior approval from the Central Bank of Armenia (CBA), which may refuse approval if outsourcing threatens financial stability, clients’ interests or effective supervision. Even after approval, banks remain fully liable towards clients, third parties and the CBA for the outsourced opera - tions. The insurance sector is likewise tightly regulated. Insurers may delegate certain functions – including claims handling, actuarial work and asset manage - ment – only with the CBA’s prior authorisation. The outsourcing contract must include mandatory pro - visions, such as confidentiality safeguards, explicit audit and supervision rights for the insurer and the CBA, and liability rules for improper performance. Both the insurer and its contractors fall under the CBA’s supervisory authority, and the CBA may require amendment or termination of outsourcing contracts that pose regulatory or consumer risks. In the healthcare sector, the management of the national electronic healthcare system, which involves sensitive personal health data, is centralised. Techni -
and tailored infrastructure, a trend reinforced by the growth of distributed teams and remote work. • Artificial intelligence and machine learning: sig - nificant investment in education and research has positioned Armenian developers to design advanced AI and machine learning applications. • Electronic design automation and chip design: Armenia’s established expertise underpins projects in IoT and embedded systems. • Cybersecurity: providers are expanding into pene - tration testing, protocol development and managed security services, meeting rising global demand for secure digital operations. • Mobile applications: Armenian firms have deliv - ered successful products across iOS and Android, strengthening the country’s international reputation in app development. 1.4 Outsourced Services In Armenia, the most commonly outsourced services are concentrated in the IT and back-office domains. IT outsourcing remains the leading segment, cover - ing software development, application outsourcing, web hosting and IT consulting/implementation. These services are frequently sought by international clients attracted by Armenia’s strong pool of skilled develop - ers and competitive cost base. Back-office outsourcing is also well established, par - ticularly in finance and accounting functions such as bookkeeping, payroll processing, statutory reporting and tax compliance. Human resources outsourcing, including workforce administration, recruitment sup - port and training management, is gaining traction among both domestic SMEs and local branches of multinational corporations. Customer service outsourcing, often delivered through call centres or multilingual support hubs, is another growth area. Finally, niche areas such as translation, market research, digital marketing and big data ana - lytics are emerging as specialised outsourcing offer - ings.
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