What is a bilateral investment agreement?

Bilateral investment agreement is an agreement between two countries on rules governing cross -border investments of private companies. It does not directly include governments that carry out foreign investments. The two -sided investment contract usually forms part of a wider package of trade agreements, the concept of a bilateral investment contract is that both countries agree with the rules that attract companies in one country to invest in another country. This investment can take several forms, such as buying a local company, merging with it or involvement in a jointly funded project. It does not simply include investing in the company by purchasing some of its shares.

The exact conditions of a bilateral investment contract may vary significantly. However, there are some measures in most contracts. This includes a guarantee that the country will treat fairly and that the government will not entertain the assets of society, for example by nationalizing its resources.

One of the most important elements of the contract is that it allows a company that believes that the foreign government has treated it to take the complaint to an independent international body. The most famous of these is the International Center for the settlement of investment disputes. Without this element in the contract, the company would have to take legal action against the foreign government with the courts of this country. In addition to being a costly offer, there will often be suspicions - justified or otherwise - that it would not be a fair hearing. However, the independent system does not always work; Some countries, such as Argentina that have lost many cases, threatened to leave the system.

Since 2009, the United States had 40 active two -sided investment contracts, while the other seven were waiting for the official confirmation of the government of one or the country. The United States has a standard model contract that creates its initial base for negotiating new contracts. Some of the specific measures that are looking for,They include the right of society to move money to and from countries freely to market exchange courses, a block in countries that force foreign companies to appoint local people in higher positions, and a limit for countries imposing restrictions on foreign companies.