III Investor

Abstract

This chapter investigates how international investment law is designed to promote and protect the activities of private foreign investors. Investors are either individuals (natural persons) or companies (juridical persons). The investor’s nationality determines the foreignness of the investment and from which treaties it may benefit. Corporate nationality is considerably more complex than that of individuals. The most commonly used criteria for corporate nationality are incorporation or the main seat of the business. The Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) contains a specific provision to address the phenomenon of foreign investments made through corporations that are registered in the host State. The chapter then looks at the practice of nationality planning. States have devised methods to counteract strategies of investors that seek the protection of particular treaties by acquiring favourable nationalities. One such method is to require a bond of economic substance between the corporation and the State. Another method is the insertion of a so-called denial of benefits clause into the treaty that provides consent to jurisdiction.