By Harut Sassounian
The Acting Prime Minister of Armenia Nikol Pashinyan has made attracting overseas investors the priority of his new government.
So far, it is too early to determine if foreign investors are interested in doing business in Armenia. The common explanation for the lack of new investors is that they are waiting for the results of Parliamentary elections scheduled for December 9, 2018. It is expected that the Acting Prime Minister’s political party will win the majority of the Parliamentary seats. Government officials believe that this will encourage foreigners to start investing in Armenia.
However, there is an additional way that Armenia can attract new foreign investors relatively quickly by offering them citizenship. Many countries around the world have offered such citizenship opportunities to foreigners, including the United States, Europe and third world countries.
Earlier this year, the hetq.am investigative website published an article on Arton Capital, a company that specializes in “citizenship by investment” programs around the world. A delegation from the company visited Armenia last year at the invitation of the International Center for Migration Policy Development. Anton Capital’s website stated after the visit: “the concept of citizenship by investment was embraced by [Armenia’s] high level officials at the Ministry of Economic Development and Investments, the Ministry of Foreign Affairs, the Presidential Administration, the Central Bank, the Police, the State Migration Service and the Center for Strategic Initiatives.”
Armand Arton, a Bulgarian-Armenian, is the President of Arton Capital, and Emil Shahmooradian is the company’s Vice President of Business Development. Arton Capital has offices in a dozen countries. On his company’s website, Armand Arton stated: “as a proud Armenian, I am honored to offer my years of professional experience and acute know-how to help the country meet its foreign direct investment goals. In support of its philanthropic commitment, Arton Capital has pledged to donate the consulting fees awarded by the contract to help refugees in Armenia. More than 20,000 Syrians, many of whom are ethnically Armenian, have found refuge in Armenia since the Syrian war began in 2011.”
Countries offering such a program require from foreigners different levels of investment to qualify for citizenship. Arton Capital recommends that Armenia require the small amount of $50,000 as a minimum investment for a foreigner to become a citizen. Other countries demand much more from foreign investors with the most attractive countries asking as much as $10 million of investment for citizenship. The Company estimates that Armenia would receive $138 million of additional revenue in the next six years, if it implements the suggested investment for the citizenship program.
According to hetq.am, Arton Capital recommended that “Armenia offer potential investors two options: a $50,000 direct contribution to a state-owned fund or a $100,000 investment in a fund run by an asset management company chosen by the government, which would offer the possibility of some return. It further suggests that Armenia sets two types of fees. The first would be a non-refundable processing fee of up to $10,000; the second fee, the amount of which is not specified, would cover background checks into applicants’ records and sources of income.”
Arton Capital’s trip report on Armenia “highlights the country’s positives, such as its strong ties to global economic hubs and its geographic and cultural proximity to strategic markets. Armenia offers investors access to Russia and almost all the post-Soviet states, which means around 250 million potential consumers, including in Central Asia – plus almost 82 million more in neighboring Iran, with which the country has friendly relations. And if the country achieves visa-free access to the Schengen zone, which it might in five to seven years, it could justly claim to have recreated its historic role as a stop on the Silk Road linking east and west. As a whole, investors looking for long-term value can be sold on the advantages of Armenia. With [visa-free access] to 60+ countries and its special relationship with Russia together with its geographical proximity with Iran, obtaining an Armenian citizenship will be seen not only as a means to secure one’s future and security, but also as a strategic move for one’s business development and positioning.”
Significantly, hetq.am cautioned in its article that some foreigners interested in investing in other countries for the sake of acquiring citizenship can bring with them all sorts of illegal activities, such as tax evasion, money laundering, corruption and organized crime.
Armenian government officials have to balance the benefits of the investment for citizenship program with its drawbacks. Foreign applicants have to be thoroughly vetted before being granted Armenian citizenship in return for their investments.
Update on Armenian-American Candidates in US Elections
In addition to the list of Armenian-American candidates in the U.S. midterm elections that I reported in an earlier article, we should add:
— Dick Harpootlian (Democrat) was elected to the South Carolina State Senate on November 6, 2018. He won 52.3% of the votes against his Republican rival Benjamin Dunn’s 47.6%.
— Anthony Brindisi (Democrat) was elected a Member of Congress from upstate New York on Nov. 6, 2018, according to the final count of the vote. Brindisi’s great grandparents were born in Mardin, southeastern Turkey and fled during the Armenian Genocide to Aleppo, Syria, where his grandfather was born. As of January 2019, there will be three Armenian-Americans in the U.S. House of Representatives: Brindisi, Eshoo, and Speier.