Domestic Legal Frameworks for Investment Protection
A sound legal framework for investment, underpinned by clear and consistent rules, can mitigate uncertainty and non-commercial risks for investors. In particular, private investment in key infrastructure sectors (where long payback periods are expected) require particularly strong and stable legal protection guarantees.
There are great differences between ASEAN member countries in terms of both level of sophistication of the regulatory environment and legal security provided to investors. While some, such as Singapore and Brunei Darussalam, possess very robust legal frameworks for the protection of investment, others are still developing their frameworks and business environments.
Nonetheless, reform efforts are currently being undertaken by these countries (to varying degrees) which are gradually paving the way for a harmonised legal landscape in Southeast Asia. Looking to achieving the ASEAN Economic Community, individual countries have been progressively bringing their domestic legislation in line with common protection standards, on the basis of the ASEAN Comprehensive Investment Agreement (ACIA).
Domestic legal frameworks to protect long-term investment in ASEAN member states include:
- Core investment protection provisions
- The principle of non-discrimination
- The protection of property rights