Foreign Investment Law: Asian Investment and the Growth of Regional Investment Agreements

Abstract

Foreign direct investment (FDI) plays an increasingly important part in the economies of the Asian region. The legal and regulatory approaches taken to FDI across the Asian region reflect the diversity in the legal systems of the many countries of the region, which come from a variety of legal traditions. In addition, the degree to which Asian nations are open to and encourage FDI varies considerably. Notwithstanding this, the overall regional trend in both domestic legislation and regional initiatives has been towards the promotion of FDI, through investment encouragement measures such as incentives and relaxation of restrictions on investment. Moves towards unilateral reform of FDI regulation by individual states have been supported and encouraged both by regional initiatives providing a framework for the reform and gradual liberalisation of investment regulation, and by the negotiation by Asian states of a range of bilateral and multilateral treaties dealing with investment, including regional free trade agreements (FTAs) aimed at liberalising and encouraging intra-regional trade and investment.

This chapter provides an overview of regulatory developments affecting FDI, both national and international, and the important issue of investment dispute settlement. It looks at a number of different systems of national regulation, at APEC’s efforts to encourage unilateral liberalisation of FDI regulation, at bilateral and multilateral initiatives, as well as their effect on the standardisation and liberalisation of FDI regulation, and at the issue of investment disputes and their resolution in the region.

Further analysis is available at: Bath, Vivienne and Nottage, Luke R., "International Investment Agreements and Investor-State Arbitration in Asia" (February 26, 2020). Sydney Law School Research Paper No. 20/08. DOI: 10.2139/ssrn.3544458

Keywords: investment, foreign direct investment, FDI, investment law, investment regulation, ASEAN, APEC, regional initiatives, Asia, Asian legal systems, TPP, Trans-Pacific Partnership, Regional Comprehensive Economic Partnership, RCEP

JEL Classification: K10, K30