ARMENIA Trends and Developments Contributed by: Hayk Hovhannisyan and Tachat Voskanyan, HAP
ward with offers to provide such services. M&A support usually includes a wide range of ser - vices: providing advice on mergers and acqui - sitions, organizing and supporting mergers and acquisitions, preparing Share Transfer Agree - ments, obtaining Mergers and Acquisitions per - mits, comprehensive legal, due diligence, back - ground checks, registration of rights to acquired shares/assets, and more. Another trend worth mentioning is foreign invest - ments. Foreign investors are significantly inter - ested in this field, and it is no coincidence that Armenian companies are increasingly cooperat - ing with foreign investors, attracting new tech - nologies and capital. In this regard, the Gov - ernment’s efforts are also substantial, aimed at improving the investment environment, very often creating a more favourable environment for foreign investments. Despite all this, Armenia continues to face sev - eral challenges in this field that may limit invest - ment activity and hinder the implementation of major transactions. One challenge is the under - developed corporate culture, which can hinder effective management systems, disrupt market operations, and lower international investor con - fidence. Additionally, Armenia’s small market creates cer - tain limitations, making it difficult to implement large business transactions. Investors often pre - fer countries with larger economies, where mar - ket volumes allow sustainable business growth. Political and economic uncertainties also con - tinue to impact the investment environment. External political tensions, regional conflicts, and economic instability can discourage for - eign investors or slow down the decision-making process. Under such conditions, investors often
wait for the situation to stabilize before making major investment decisions. Bureaucratic issues still exist, often making busi - ness transactions harder. Lengthy permits, regu - latory restrictions, and unclear laws can delay or block mergers and acquisitions. In 2025, Armenia’s M&A market is expected to grow, especially in key sectors. The most active sectors will likely be: Information Technology (IT) and Artificial Intelligence (AI) Considering the experience of previous years in this sector, technology startups, software devel - opment, and artificial intelligence applications will continue to be the main targets for invest - ment. Armenia’s IT sector has grown steadily in recent years, attracting more international com - panies and investors due to its skilled special - ists, affordable workforce, and government tax incentives. Foreign investors are expected to show more interest in Armenian IT companies, driven by the sector’s growth, expanding startup ecosystem, and successful partnerships with international companies. Innovative solutions, like AI in healthcare, finance, and industry, are expected to make the sector more attractive to investors. Considering all these factors, the IT and technol - ogy sector will remain one of the fastest-growing and investment-attractive branches in Armenia, where M&A activity will significantly increase in 2025. Energy, including renewable energy Armenia’s energy sector, especially solar and wind projects, is expected to attract major invest - ments, driven by global green energy trends and the Government’s support for renewable energy.
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