- Foreign Direct Investment — Investment ‘in accordance with host state law’ — Sovereignty — Law of treaties
This chapter assesses investment promotion, facilitation, admission, and establishment. International law recognizes that by virtue of its sovereignty a state has the right to control the entry and exit of persons and things into and from its territory and also to regulate the activities of nationals or foreign persons and companies within that territory. A corollary of that principle is that a state is not required to allow foreign nationals or companies to establish or acquire an enterprise or investment within its territory. With respect to foreign investment, states have complete legislative jurisdiction to determine to what extent foreign nationals and companies may undertake investments, which sectors and industries they may or may not enter, and whether or not they must fulfil additional conditions in order to undertake and operate an investment within state territory. Numerous factors have shaped individual countries' attitudes towards foreign investment and investment treaty negotiations. One of the traditional aims of the investment treaty movement has been to reduce these internal barriers to foreign investment, particularly through treaty provisions on investment promotion, admission, and establishment. The second decade of the twenty-first century witnessed a growing emphasis in both international discussions and a few treaties on a new concept: foreign investment facilitation.
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