In the first half of 2025, Armenia has shown signs of revived investment activity. According to the World Bank, the net inflow of foreign direct investment — primarily in the mining and aviation sectors — has risen to 0.6% of annual GDP. This marks significant progress compared to the historic low of 2024, when the figure was just 0.3%. The stability of the Armenian dram against the U.S. dollar, strengthening by 1.2% compared to August–September of last year, along with an increase in international reserves to $4.2 billion (covering four months of imports), has created a favorable backdrop for investors. However, the dram’s depreciation against the euro (4.4%) and the Russian ruble (9%), as well as a 2.2% drop in the real effective exchange rate, point to ongoing challenges.
Regulatory Framework: The Foundation of Investor Confidence
Mark Chenyan, an international investment banking expert who has worked closely with Silicon Valley companies and leading U.S. firms, believes that Armenia has no fundamental weaknesses, but it lacks a strategy. One of the main issues, he argues, is the absence of a strong regulatory authority similar to the U.S. Securities and Exchange Commission (SEC). This gap creates uncertainty that deters large-scale capital.
According to Chenyan, Armenia already has more than 60 qualified professionals in financial regulation — a solid foundation that remains underutilized. “When such a body exists, it instills great confidence in foreign investors,” he explains. Without a reliable regulator, risks appear too high, and capital tends to bypass the country.
To remedy this, Chenyan proposes a concrete plan: send a group of 8–10 specialists to the United States to study SEC best practices. Upon their return, they could establish an independent regulatory body ensuring transparency and investment protection. This, he says, would be the first step toward attracting equity capital focused on long-term growth. The expert’s approach would not only boost investor confidence but also integrate Armenia into global financial standards, making it part of an international ecosystem where investors feel secure.
Tax and Commercial Law: The Path to Transparency
Turning to the legal framework, Chenyan highlights imperfections in Armenia’s tax and commercial legislation as another major obstacle. Investors carefully evaluate risks and profit expectations — and here, Armenia lags behind global standards. “Tax systems must be clear and aligned with international norms,” the expert stresses.
He cites conversations with business leaders: the current model, where 20% tax is levied on smaller incomes, can be effective if it ensures stability — as opposed to lower rates on large sums with no guarantees. “Today’s 20% is an investment in tomorrow’s 100%,” Chenyan emphasizes, warning that negative perceptions can drive away global markets.
In his view, Armenia must, within the next 3–5 years, carry out reforms to synchronize its laws with international frameworks. This would allow the government to focus on economic growth as the primary driver. “Economic growth is the only thing that lifts nations out of poverty; everything else is secondary,” he asserts.
Market Size and Production: From Engineering to Global Competitiveness
Armenia’s domestic market is too small to attract major investments on its own, Chenyan notes, and the key lies in integration into regional and global value chains. “The Armenian market is attractive to investors only in the context of broader connections,” he explains.
The country excels in education and engineering but remains weak in the production phase — engineers create value that often flows abroad due to a lack of capital. “We need substantial capital for manufacturing if we want to compete globally,” the expert says.
The solution, he argues, lies in attracting equity investment to establish high-quality production. “Why can’t we compete if we have the potential?” Chenyan asks rhetorically.