Important amendments are expected in the Civil and Tax Codes of the Republic of Armenia, as well as in the laws on Limited Liability Companies and Joint-Stock Companies, introducing the legal concept of a convertible loan.

What is a convertible loan?

It is a loan that an investor may later convert into shares or equity in the company, as agreed in the contract.

What opportunities does this create?

• Enhances investment flexibility

• Clarifies the investor’s legal status

• Promotes early-stage financing for companies

What is planned from a tax perspective?

Regarding tax implications, it is defined that interest payable under the agreement is considered paid at the moment of conversion into equity or shares.

This reform is an important step toward improving Armenia’s business environment and expanding available investment tools.