Yerevan/Mediamax/. In Armenia, overt statutory ownership restrictions on foreign capital exist in a number of key sectors of the economy, “Investing Across Borders 2010” (IAB) report of the World Bank reads.

Mediamax informs that the report is composed for the first time and analyses the laws and normative acts in 87 countries, which have effect on direct foreign investments. The analysis was carried out basing on four components: investing in various sectors of economy, establishment of foreign business, access to industrial land and solution of arbitrary disputes.

The report notes that foreign ownership of air transportation companies is limited to a maximum of 49%. In addition to these restrictions, Armenian laws also limit foreign ownership in the airport operation and railway transportation sectors to 40%. Foreign capital participation in the oil and gas sector is limited to a maximum of 49%.

“These industries, as well as the electricity transmission sector, are, furthermore, characterized by monopolistic market structures, further impeding foreign investment”, the report notes.

Restrictions in Armenia also exist in selected primary sectors such as the forestry industry, which is closed to foreign investment.

It takes 8 procedures and 18 days to establish a foreign-owned limited liability company (LLC) in Armenia (Yerevan), a process in line with the regional average for IAB countries in Eastern Europe and Central Asia”, the report reads. As a shortcoming, absence of electronic services for company registration is noted.

According to the report, the process of leasing private land is streamlined and extremely fast compared to the regional or global average.

“Land can be leased for up to 99 years and the lessee has the right to subdivide, sublease, or mortgage the leased land. There are no restrictions on the amount of land that may be leased. Yerevan, Armenia’s capital, has both a land registry and a cadastre located in the same agency, and they are linked and coordinated to share data. There is, however, no land information system (LIS) or geographic information system (GIS) in place that centralizes relevant information at a single point of access”.

In the section, devoted to formation of the institute of commercial arbitration, authors of the report note that the institute of arbitration is a novelty in Armenia and does not possess significant practice. “All commercial disputes are arbitrable, however, this does not cover intra-company and patent or trademark disputes. It takes less than 30 days to obtain an arbitration award in the Arbitration Court of the Armenian Chamber of Commerce. The arbitration award must be confirmed by an Armenian court. On average, it takes around 58 weeks to enforce an arbitration award rendered in Armenia (assuming there is no appeal)”, the report reads.

For comparison, let’s note that Georgia, according to the report, leaves Armenia behind as to all key components. The authors of the report note that Georgia is one of the most open countries for foreign capital and all researched sectors of economy are fully open for foreign investments. “There are no monopolistic or oligopolistic structures in the country, and there are no difficulties in receiving any necessary licence”, the report reads.