New Law on SAFE Financing Instruments in Armenia

The Republic of Armenia has adopted a new law regulating SAFE (Simple Agreement for Future Equity) agreements, providing a new mechanism for startup financing. Effective from May 30, 2024, the law allows investors to inject capital into a company’s equity in exchange for future shares.

Main Provisions of the SAFE Agreement (Article 38.2 of Law on Joint Stock Companies)

  1. The investor commits to investing the specified amount, and the company commits to issuing shares upon fulfillment of conditions.
  2. The investor transfers the funds, and shares are issued upon condition fulfillment.
  3. The company must issue shares within 60 days upon condition fulfillment.
  4. Preemptive rights of shareholders do not apply.
  5. Investment relations are regulated by the Central Bank’s laws.
  6. SAFE agreements may include terms for fund return and interest payments.
  7. SAFE agreements are considered securities.

This law enhances the investment environment and provides new opportunities for startup financing in Armenia.

For more details, visit ARLIS.

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