Introduction to the Business Environment
This study guide provides an introduction to international investment law and focuses on the case-law on the treatment of foreign investment.
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Added on 2020-01-28
Introduction to the Business Environment
This study guide provides an introduction to international investment law and focuses on the case-law on the treatment of foreign investment.
Added on 2020-01-28
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INTRODUCTIONBusiness is considered as most advisable and most practicable activity. This is a kind ofactivity which is being regulated all over the world. Some of the business organisations havemade an interest to create and develop their business at international level that is makingbusiness relation with the other countries(Moosa, 2016.). There are many other businessorganisation who are looking forward to set their business at international level by investing intoother countries. Such investment is called international investing which is a kind of strategy ofselecting investment which are globally based and considered as the part of an investmentPortfolio. The following question which describe all the important laws and treaties which areconnected to international investment. The following discussion will also include various kind oflaw and regulation which has been set up to describe international investment law in context totreaty shopping which is prevailing globally all over the world.PART IIInternational investment is considered as strategy used by various kind of organisation toselect what kind of investment instrument are present globally. It is very important for all thebusiness organisation who have been carrying out their business globally to understand what arethe policies and schemes for investing in the international market. Such action is taken by al,l thebusiness organisation in order to incurred profits in the company. In order to safeguard suchinternational investment for all the business organisation government and the body who isgoverning law has made several attempt for protection by implementing various kinds ofinternational investment law(Moran,2012.). When an international investment is being taken byall the organisation present globally, there are many kinds of risks present for an example, therewill change in the market value, there shall be low liquidity sometimes, at times situation comeswhen all the important information are not easy accessible, there might be fluctuation in currencyexchange rates which is why there are laws which is being implemented by the government inorder to ensure that all the rights and the interest are being protected by the government(Lall,Narula, 2013.). International investment law is one of the aspect which is enacted by theinternational government body to take care of the rights and duties of the business organisationwhich are being settled globally. International investment law is the very important and emerginglaw which will cover the field if international law. These law shall addresses the regulations
related to the behaviour of sovereign(Wu, Ma, Zhuo, 2016.). In international investment lawthere are many bilateral and unilateral treaties of which at present there are 3000 are in force.Another element which is connected with the international investment law is the arbitrationprocess which is established in the situation when the organisation settled their business globallyencounter any kind of breach in contract or there shall be any kind of infringement in the rightsand duties of the parties then arbitration is the body which will resolve all the problems related tobusiness activity present globally or related to any kind of treaty which is being signed betweenthe parties(Mathur, Singh, 2013.). Another provision which is included in the international is ofmaking treating with the international countries that is when the organisation are interested inmaking the contract or the agreement with the companies then there are several treaties to bemade. A treaty can be defined as the agreement which is made by the party or the companies oftwo different countries to set a totally new venture in a different countries. Such treaties aremade under the international law namely sovereign states and international organisation. whichbinds the parties into an agreement(Fajgelbaum, Grossman, Helpman, 2014.). A treaty can alsobe refereed as an agreement or the protocol. Treaties can also considered as contract whichmeans willing of parties to bind into a contract and assuming legal obligations on themselves. Alegal obligation to a contract means, when there are rights and duties of the person or the partyarising out of contract. There are many kinds of contract which is being signed between theparties and raise certain obligation of the party as well as for the market also. Such obligationsare also mentioned in the treaties which are made between the parties(Allan, 2012.). For anexample in the case of Darcy v Allein [1603] 77 Eng. Rep. 1260. established a fact that it isimproper as well as illegal for any kind of individual to establish or to allow monopoly over atrade under any treaty made in international law(Büthe, Milner, 2014.). It was considered as theearly landmark case in English law which have established the provision of monopoly in themarket. Monopoly can be explained as the situation in the market where all the market activitieswhether it is profit or losses are governed or taken by just one individual and making an adverseeffect on the market. The facts of the cases states that plaintiff, Edward Darcy received a letter oflicense to import and sell playing cards and to be marketed in England. All the trade related tocards and arrangements was apparently secured in the party by the queen's concern controllingtrade by one person had became a problem(Cavusgil, Knight, et.al, 2014.). This was giving anadverse effect on the market practice as well. When the defendant tried to sell his own playing
cards, Darcy sued to prevent this competition(Javorcik, 2016.). The case has been taken by thehouse of lords, in the judgement, the bench of queen determined that a monopoly which is beinggranted by the queen was invalid because these kind of monopoly promote idleness and alsoprevent or restrict the person who wants to raise their skill in trade practice etc. it was furtherstated in the judgement of the case that a monopoly damage tradesman as well as it violate theinterest of those market operators who wants to raise themselves in the upcoming market when amonopoly is being established in the market. Another case which is being noticed in regard totreaties on international level is Furniss v Dawson(Farole, Winkler, 2014.). It is considered asone of the important case of house of lords in the context to UK text.As it has been seen in various context that there are many treaties which is being signed oragreed by different kind of parties who are interested in making a contractual relation or formingany kind of agreement with the company of another country to establish a totally differentcompany. One of the treaty is treaty in shopping(García, Jin, Salomon, 2013.). It is a kind oftreaty in which parties from different country form a contract or the agreement to establish acompany in different country to avail the benefits of tax occurring in the jurisdiction of thatcompany. It has been seen that not every country has the favourable kind of tax treaty. Afavourable treaty can be refereed to any kind of protocol which is established for the bettermentand in context to tax(Olney, 2013.). Generally it has been appeared as a fact that some of thecountries are lacking in any kind of tax policies or does not possess any tax treaties in that casethey look for the country where any kind of tax treaty is prevailing and the treaty is beneficial forthe company or the business organisation who is planning to establish a new kind of business inthe other company. Sometime there are situations arise where a company of a particular countrywas not able to enjoy all the tax benefit as there were not treaties present in the company as wellas there were no treaties preset internationally by which a situation arise in which the company isnot able to enjoy those tax benefits(Marinova, Child, Marinov, 2015.). In these kinds ofsituations the business organisation set or make an agreement with company residing in anothercountry to avail all the tax benefits. Such practice of treaty shopping is being done and structuredfor multinational business to attain all the favourable and advantage of tax treaties available incertain jurisdiction. It is very important for the business organisation as well as for the employeeof the company to generate some income from the business they have been doping so far. Whenthe income is not being generated in the company in their home country then it became
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