Investment risks across all industries ranging from adverse and discriminatory changes in legislation, regulation and taxation to outright expropriation are growing both in emerging markets and the developed world and particularly in the European Union.
The planned cancellation of intra-EU Bilateral Investment Treaties (BIT) and the replacement of BITs by weak investment protection provisions in TTIP (USA-EU) and CETA (Canada-EU) leave corporate and financial investors exposed to growing risks and ineffective defence options.
With marginal benefits of structuring for tax efficiency falling, investment protection considerations are rapidly gaining importance in international corporate structuring.
Growing investment flows into emerging markets increase the need for sophisticated risk management based on strong investment protection, only afforded by effective access to Investor-State Dispute Settlements (ISDS) thanks to investor-friendly BITs.
Well-defined investment protection strategies, the ongoing monitoring of the fast-changing BIT landscape and the timely recalibration of corporate structures will maintain adequate investment protection in a volatile world.
Thorough correct corporate structuring, a realistic funding strategy and the insightful selection of legal counsel and arbitrators maximize investors’ chances for success in the opaque discipline of ISDS.
Why many existing treaties and institutions do not help.