ArmInfo. In Armenia, the maximum number of participants (shareholders) in non-public funds will be increased from 49 to 99. At its June 18 session, the National Assembly of the Republic of Armenia will discuss in the first reading amendments to the Law "On Investment Funds," proposed by the Armenian government.
According to Lilia Sirakanyan, Deputy Minister of Economy of the Republic of Armenia, statistics from recent years show that non-public investment funds have demonstrated active growth both in the number of registered companies and in key activity indicators. Thus, between 2020 and 2024, the number of the latter increased from 36 to 112. Despite stable growth trends, certain legislative obstacles exist that limit the normal development of non-public investment funds and require them to be brought into compliance with generally accepted international standards. According to the Law "On Investment Funds," a non-public fund cannot have more than 49 participants. If the number of participants exceeds 49, the non-public fund is obligated to re-register as a public fund within 90 calendar days in accordance with the general procedure established by this law or reduce the number of participants accordingly. Otherwise, it is subject to liquidation by court order. Moreover, the provisions of this provision are organically linked to a number of other provisions of RA legislation. In particular, according to the law, a non-public fund is one whose charter stipulates that the securities it issues cannot be placed through a public offering, including an offer addressed exclusively to an unspecified number of qualified investors. A public offering of securities is defined as an offer of securities to more than 100 persons who are not qualified investors, or to an unspecified number of persons.
From the above, it is clear that the sole and key criterion for distinguishing non-public investment funds is the prohibition on public offerings of their issued securities. This approach reflects generally accepted international approaches to establishing regulatory requirements for public and non-public funds, as public offerings involve a much greater public interest, and their protection requires much more stringent and detailed requirements. However, the statutory threshold of 49 participants is inconsistent with this logic, since from a public offering perspective, an offer made to even 100 non-qualified investors does not constitute a public offering. For this reason, it is proposed to increase the number of shareholders to 99, which could lead to the attraction of new investments.
