THE WORLD BANK World Bank Group Multilateral Investment Guarantee Agency 1 Investment Policy, Legal Framework, & Promotion Investment Facilitation Sector

THE WORLD BANKWorld Bank Group Multilateral Investment Guarantee Agency

1

Investment Policy, Legal Framework, & Promotion

Investment Facilitation

Sector targeting and

promotion

Investor Aftercare &Policy Reform Communications

CLIENT SOLUTIONS

for:

Impacts• Investments• Jobs• Reforms

Benchmarking FDI Competitiveness

FDI Strategy & Action plan

Investment Law and Policy


Legal Framework For Investment

Legal Framework is more than the Investment Law:

Constitution (property rights, economic system)

Core economic laws: Competition, Banking, Intellectual Property Rights

Sectoral Laws (e.g., Mining, Utilities, Infrastructure)

Bilateral and Multilateral International Agreements, e.g., WTO, BITs, TTs

State/Provincial Local Laws [as applicable]

And of course, the Investment Law


3

Principles of Good Investment Policy

Clear, transparent and predictable legal framework

Equal treatment of investors

Ease of entry: registration instead of screening

Respect for property rights

No performance requirements and few sectoral restrictions

Free repatriation of profit


4

Principles of Good Investment Policy

Good dispute resolution practices

Permissibility of expatriate labour

Avoidance of distortive and discretionary tax incentives

Avoidance of double taxation

Fostering benefits of FDI to the domestic economy.


5

Structure of Modern Investment Laws

Comprehensive Definitions SectionKey institutions, FDI etc

Clear Entry RequirementsRegistration instead of licensing (which requires screening), negative lists etc

Investor GuaranteesNational treatment of foreign investors

Property rights protected; prompt, adequate and effective compensation in the event of expropriation

Un-restricted repatriation (transfer) of capital and profit

Access to alternative dispute resolution mechanisms (ADR)

Transitional Provisions Details on how the Investment Law complements, amends or repeals previous laws and regulations.


6

The Role of Investment Law

Law as an implementation and promotional tool

The Investment Law can serve as a signal to indicate that the country is “open for business”, welcomes FDI

The Investment Law serves to implement the investment policy

Good Investment laws provide greater certainty to both:

Investors

Government

By:

Clarifying roles and responsibilities of investors and the Government

Binding them to their respective rights and obligations

Reducing the scope for discretionary decision-making and increasing transparency in administrative processes

Providing a basis for dispute resolution


Link to the Investment Law Handbook

https://www.wbginvestmentclimate.org/uploads/Investment-Law-Reform-Handbook.pdf




8

DISCUSSION

Documents

THE WORLD BANK World Bank Group Multilateral Investment Guarantee Agency 1 Investment Policy, Legal Framework, & Promotion Investment Facilitation Sector