In the conditions of global crisis, encouraging investments in Armenia has become a great issue. Taking into account the importance of this issue, Panorama.am had an interview with Sedrak Asatryan, director of Concern-Dialog Law firm.

Panorama.am – your company provides legal services to trading companies, including companies with foreign investments. In your opinion, is the Armenian legislative field convenient for the foreign investors?

 S.A.: If we estimate the legislative field in RA from the point of view of performing foreign investments, in general the conditions are not so bad. There is a law on “Foreign investments” which gives the investor some guarantees, that’s, according to the 7^th article of the law regulating the foreign investments in case of amendments in the legislation; the investor can use the legislation acting at that period while making investment.  Another issue is the problem of application of laws and here we have certain problems.

 Panorama.am – can you give an example where the law is not used or is not used properly?

 S.A: unfortunately the list of such laws is large, but I will try to give examples of the application of laws connected mainly with investors’ sphere. The law on “State Registration of Legal Entities” was amended in 2008 and a term came into force on the first of September of that year, that’s, the whole information about General State Register Book, as well as the charters of the legal entities should be placed in the web-site. But the law does not indicate in which web-site this information should be placed. May be one of the main reasons is this factor, that the information is not provided by internet yet. There are more serious problems in this law as well, which do not appear in the list of so called amendments. For example, in the 21 article, if the founder is a legal entity, he must provide the state registration the decision of the authorized body of the legal entity together with the list of necessary documents for state registration.

The problem is that the name of the authorized body is not mentioned in the charters of legal entities of all foreign countries, so, if the founder is a foreign legal entity, in this case a serious problem occurs concerning the state registration of the legal entity which contains real corruption risks.

I would also like to speak about the usage of the RA law on “Electronic documents and electronic signature” which came into force in January 2005, but does not act, or acts partially in the state bodies. And though all the sub-legislative acts determined by the decree of the Government of RA are accepted for the usage of the law, they are incomplete; especially the procedures of creating certification centers are not regulated by them. This is the main reason that such certification centers have not been created yet.

Another issue is the RA law on “Special delivery of documents” which came into force in May 2007, but it does not act yet. We periodically ask for information the national operator of postal service why documents are not delivered by postal offices according to the procedures of this law. This law can solve serious problems connected with the notifications and content of other documents by presenting thorough evidence and lessening the risk of good delivery of important documents by post.

The next issue is the RA law on “Foreigners”, which came into force in February 2007, but since now the authorized body who gives permission to the foreigners to work in Armenia, is not appointed by the government yet. Moreover, while providing living status to the foreigners, the department of visas of the Police is guided by the old list of the necessary documents, instead of the new one, etc.

Panorama.am – You spoke about legal usage of the laws. In your opinion are there any laws in that field, which are used  but do not allow the investors ability to act more flexible in business?

S.A.: Yes, there are a lot. I will try to mention the most important ones. The non-flexibility of the above mentioned laws is one of the main reasons why they are not used properly. But I would like to speak about the absence of the Tax legislation which makes a real mess in the legislative field.

The foreign investor or generally any entity should have a compact legislation with the help of which will regulate the whole tax correlations but not laws, orders, instructions, clarifications of hundreds of pages, etc.

The next field that I would like to mention is the field of regulation of labour relations. This field is regulated by the labour code, more or less it solves the problems of this field but is nor flexible as well. Mainly, the employers are not able to regulate the problems of providing their employees with good and effective training courses in abroad, and then keep them working in their companies for a certain period.

One of the problems in Armenia is the non-flexibility of real estate rental institute. It does not allow formulating the renting in a way to perform many business plans.  The institute of Commercial Lease is not separated and notary validation and state registration is required even for real estate lease agreements of 10 days.

Taking into account our experience of cooperation with foreign investors of the last years, these problems can be listed but they are highly specialized.

Panorama.am – In your opinion, if flexibility is provided to the listed laws mentioned above, will the mentioned problems be able to be solved?

S.A. – I think it’s not enough. The proposed changes are only the first steps for rectifying the situation. The experience proves that we can have good law but some people from State offices and local self-government bodies who apply the law, have not read the law or have read it but continue to use the laws in a way they want.

Non-official translation