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Key Principles

Investment Policy Central believes the following key principles underpin an open investment climate for both inward and outward investment:

Freedom to Own and Control One's Investment

Ownership and control of one’s investment are central to an open and attractive investment climate.   Governments can certainly review the national security implications of foreign investments to address genuine national security risks.  But, too often, governments employ various restrictions on ownership and control of investments for purposes other than addressing genuine national security risks, to the detriment of open investment flows.  Restrictions of this nature can have damaging and wide-ranging effects.  Common violations of this basic principle include:  

  • Complete bans on ownership of businesses or foreign business in certain sectors
  • Limiting foreign ownership to less than 50%
  • Limitation on the total number of licenses granted by a government
  • Forced joint venture partnerships intended to facilitate transfer of intellectual property
  • Misuse and abuse of investment approvals and screening mechanisms
  • Conditions placed on investment regarding local employment and local content use
  • Prohibition or limits on global movement of profits within the company

Assurance of Fair and Non-Discriminatory Treatment 

Private investors, both domestic and foreign, deserve fair and equal treatment by host governments. Government policies that advance the interests of domestic investors over foreign ones damage the free flow of investment across borders and limit the significant benefits it can bring to both the investor and the recipient. It is important for an investor to be assured that:

  • Government policies and regulations are developed in a transparent manner that welcomes both domestic and foreign stakeholder engagement
  • Laws and regulations are equally enforced
  • There is access to government procurement markets
  • Access to government networks will be open for all commercial actors
  • A level-playing field governing competition will exist between domestic, foreign, and state-owned commercial actors
  • There is prompt, adequate, and effective compensation for direct and indirect expropriation

Adherence to the Rule of Law 

Truly open investment flows require the guarantee of the rule of law and adherence to binding dispute settlement. An investor must know that the country where it seeks to invest:

  • Has a strong and enforceable legal structure which respects fundamentals including contract, property, and intellectual property law
  • Enforces domestic laws and international commitments regarding bribery and corruption
  • Upholds and values an independent judiciary
  • Adheres to and actively enforces its international trade and investment commitments, including support for an investor-state dispute mechanism
  • Accepts and lives up to determinations made by international arbitrators to resolve disputes

Other Group's Key Principles & Declarations

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