France

1. What is the status of the ECT in France?

France was a party to the ECT until 8 December 2023. France notified its withdrawal to Portugal, the depositary of the treaty, on 1 December 2022. Portugal confirmed receipt on 7 December 2022. France’s withdrawal therefore become effective on 8 December 2023, no less than one year after notification to the depositary.

France ratified the ECT on 1 September 1999 and the Treaty entered into force on 27 December 1999. France did not formulate any declaration under Article 40 of the ECT, which was therefore binding in all its territories.

On 21 October 2022, French President Emmanuel Macron announced France’s decision to withdraw from the ECT, on the ground of environmental concerns. According to the French President, such exit is coherent with the state’s climate strategy (i.e., aiming to foster investments in renewable energies) and the Paris Agreement on Climate Change. 

2. How are foreign investments in France or made by French investors protected under other bilateral and multilateral investment treaties? 

France is a Contracting State of the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (1965, Washington), known as the ICSID or Washington Convention, in force since 20 September 1967.

France has signed approximately 190 treaties containing investment-related provisions, amongst which around 115 bilateral investment treaties ("BITs") were signed since 1963. Over 80 of these BITs remain in force today and are entered into with non-EU member States. 

BITs to which France is a party usually contain typical substantive protection provisions such as fair and equitable treatment, full protection and security, most-favoured nation treatment and protection against expropriation. French BITs also often include the following key procedural features: a six-month cooling-off period between notice of a dispute and commencement of proceedings, and a clause providing for Investor State Dispute Settlement (“ISDS”) via arbitration of investor claims for violation of rights protected under the BIT. For instance, the France-Colombia BIT, the latest BIT to have been signed by France in 2014, allows for arbitration pursuant to the ICSID Rules or on in ad hoc proceedings, where a dispute between an investor of a contracting state and the host contracting state is not amicably settled at the expiration of a six-month period from the notification of the dispute.

As an EU member state, France is also bound by investment treaties concluded by the EU on behalf of its member states, such as the Comprehensive Economic and Trade Agreement (CETA) with Canada and the EU-Viet Nam Investment Protection Agreement.

BITs between France and other EU Member States ("intra-EU BITs") are no longer in place: following the Court of Justice of the European Union ("CJEU")’s Achmea decision, France signed the multilateral Agreement for the Termination of Bilateral Investment Treaties Between the Member States of the European Union, which entered into force in France on 28 August 2021. Consequently, all intra-EU BITs formerly in force between France and other EU member states have been terminated.

3. Does France have domestic legislation dedicated to protection of foreign investments? 

France does not have domestic legislation specifically dedicated to the protection of foreign investments. 

France’s foreign investment policy is based on the principle that financial dealings between France and foreign countries are unrestricted (see Article L.151-1 of the French Monetary and Financial Code), and as such, foreign direct investments can freely be made in France. 

However, France has established a screening regime for the entry and establishment of foreign direct investments (FDIs) which relate to sensitive activities (e.g., investments which may have an impact on public order, national security or on the national defence sector; investments in activities essential to guarantee the supply of water, energy, gas and electricity, in the transportation network, in media and press activities, AI, robotics, food safety, etc). Foreign investors who want to invest in such activities must obtain prior authorisation from the Minister of Economy and Finance. This screening regime is detailed in the French Monetary and Financial Code (see Articles L.151-1 to L.153-1). On 8 September 2022, France issued a set of guidelines seeking to clarify and enhance the transparency of its screening process. 

4. Does France enter into investment agreements with foreign investors offering specific protections? 

It is not publicly known whether France has entered into tailor-made agreements extending de-facto investment protections to foreign investors. However, specific investment agreements are not unknown to France, which has shown a willingness to conclude administrative contracts with foreign actors and to even go so far as to adapt its domestic legal framework to welcome specific foreign operations. For instance, in the context of the conclusion of the agreement between French authorities and the Walt Disney Productions company for the development and exploitation of the EuroDisneyland theme park in Paris, the French parliament adopted a law  specifically allowing the State, local authorities and public establishments to enter into arbitration clauses with foreign companies, for the realization of operations of national interest.  This allowed for the inclusion of an ICC arbitration clause in the agreement.  

France has established a regime for urban tax-free zones ("ZFUs") in sensitive and disadvantaged geographical areas. To foster the economic development of these zones, companies, including foreign companies, wishing to establish themselves in these zones benefit from a tax exemption scheme for a period of 5 years. 

There are also two free port zones, where goods are regarded, insofar as import duties and taxes are concerned, as being outside the customs territory of France: the freeport of Verdon and the regional free zone of Guyana.

5. Does France have any sector-specific foreign investment incentive laws that offer additional protections? 

France has no sector-specific foreign investment incentive laws that offer additional protections.

However, France has engaged in support schemes to encourage investments in specific sectors, such as renewable energy.

6. What kind of protections foreign investments can benefit from under the general principles of law?

Investors may rely on a range of protections not specific to foreign direct investments, but generally available under domestic French law. The following general principles of French law are likely to offer protection to foreign investments: 

• The right to property is enshrined in the French Déclaration des droits de l’Homme et du citoyen (1789) which forms part of the French constitutional framework. Article 545 of the French Civil Code also grants protection against expropriation, in that it provides that no one shall be compelled by the State to surrender his or her property, except in the public interest and in return for fair and prior compensation. 
• French domestic law protects investors from discrimination.
• Foreign investors might also find protection under the general principles of French law applicable to contracts and particularly Article 1134 of the French Civil Code, under which legally formed agreements are binding on those who made them and should be performed in good faith. 

As an EU Member State and member of the Council of Europe, the protections available within the EU framework and under the ECHR, both described above, are available in France. For instance, investors will be protected under the principle of non-discrimination found in Article 14 of the ECHR. In France, investors can expect a fair trial and effective remedy in accordance with Article 6 and Article 13 of the ECHR.

State actions can be challenged before domestic administrative courts. The Conseil d’Etat acts as the Supreme Court in the administrative judicial system. 

Constitutional review is ultimately provided by the French Conseil constitutionnel. Any person who is a party to a trial before domestic courts can claim that a law promulgated by the French Parliament is unconstitutional by triggering a Question Prioritaire de Constitutionnalité ("QPC").

7. Are foreign investors and foreign investments subject to different treatment before national courts?

Foreign investors and foreign investments are not subject to being treated differently from local investors and their investments before French courts. 

8. Is international arbitration a recognised form of dispute resolution between the foreign investor and a State in France? 

France recognises international arbitration as a form of dispute resolution between the foreign investor and the host State, as can be seen from the fact that it is a party to the ICSID Convention and from its agreement to ISDS in the BITs in force. 

France is also party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958, New York). Foreign arbitral awards may be recognised and enforced in France provided that their existence is established by the party seeking recognition and such recognition is not patently contrary to international public policy (see Article 1514 of the French Code of Civil Procedure). Furthermore, international awards rendered by arbitral tribunals seated in France are only subject to the five limited annulment grounds listed under Article 1520 of the French Code of Civil Procedure. 

It should be noted that France is generally known to be an arbitration-friendly jurisdiction. Indeed, despite its intensified control of foreign awards’ conformity with international public policy in cases involving corruption and money laundering issues, the Paris Court of Appeal - whose International Chamber now reviews all setting aside proceedings against international awards - has generally adopted a pro-arbitration stance.

Germany

1. What is the status of the ECT in Germany?

As of now, Germany remains a party to the ECT (at the time these questions were answered), having ratified the treaty on 14 March 1997. However, in November 2022, Robert Habeck, German Minister for Economic Affairs, announced that the German cabinet had decided that Germany would withdraw from the ECT. The German Federal Ministry for Economic Affairs and Climate Action has stated that withdrawal from the treaty will be communicated to Portugal, the depositary of the treaty, before the end of 2022.

2. How are foreign investments in Germany protected under other bilateral and multilateral investment treaties?

Germany is a Contracting State of the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (1965, Washington), known as the ICSID or Washington Convention, in force since 18 May 1969.

Germany has signed 155 bilateral investment treaties (“BITs”) between 1959 and 2010, with 114 treaties between Germany and non-EU Member States currently in force.

BITs between Germany and other EU Member States (“intra-EU BITs”) are no longer in place: Following the Court of Justice of the European Union (“CJEU”)’s Achmea-judgment, Germany signed the multilateral Agreement for the Termination of Bilateral Investment Treaties Between the Member States of the European Union, which entered into force on 29 August 2020. Consequently all intra-EU BITs formerly in force between Germany and other EU Member States have been terminated.

As an EU Member State, Germany is also bound by investment treaties concluded by the EU on behalf of its member states, such as the Comprehensive Economic and Trade Agreement (CETA) with Canada. The German legislature ratified the CETA in December 2022.

3. Does Germany have domestic legislation dedicated to protection of foreign investments?

Germany does not have domestic legislation specifically dedicated to the protection of foreign investments. Foreign investment is subject to screening under the Foreign Trade and Payments Act and the Foreign Trade and Payments Ordinance.

4. Does Germany enter into investment agreements with foreign investors offering specific protections? 

It is not publicly known whether Germany has entered into tailor-made agreements extending de-facto investment protections to foreign investors.

However, administrative contracts are frequently utilised to regulate rights and obligations between the public and private sector. For example, in 2021 Germany entered into an administrative contract with the operators of coal-fired powerplants to regulate the phase-out of coal as a source of energy in Germany. That contract contains detailed provisions on compensation.

Germany has no special economic zones. However, there remain two free zones, where goods are regarded, insofar as import duties and taxes are concerned, as being outside the customs territory of Germany – the Freeport of Bremerhaven and the Freeport of Cuxhaven. 

5. Does Germany have any sector-specific foreign investment incentive laws that offer additional protections?

No, Germany has no sector-specific foreign investment incentive laws that offer additional protections. 

6. What kind of protections foreign investments can benefit from under the general principles of law?

Investors may rely on a range of protections not specific to foreign direct investments, but generally available under domestic German law.

This includes Article 14(3) of the German Basic Law – the German constitution – and the corresponding jurisprudence, affording protections in case of expropriation or actions tantamount to expropriation. Such actions must be in the public interest, must be proportionate and there must be appropriate compensation. These protections also apply to non-German legal entities.

Remedy may also be available under domestic law on governmental liability. State action can be challenged in administrative proceedings and administrative courts. Constitutional review is ultimately provided by the Federal Constitutional Court. 

As an EU Member State and member of the Council of Europe, the protections available within the EU framework and under the ECHR, both described above, are available in Germany.

7. Are foreign investors and foreign investments subject to different treatment before the national courts?

A foreign investor can expect to be given treatment no different than the one afforded to local investors before national courts. Foreign investments are subject to investment screening (see above).

8. Is international arbitration a recognised form of dispute resolution between the foreign investor and a host State? 

Germany recognises international arbitration as a form of dispute resolution between non-EU foreign investors and a State, as can be seen from the large number of BITs in force. Germany is also party to Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958, New York) and the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (1965, Washington), known as the ICSID or Washington Convention. 

Italy

1. What is the status of the ECT in Italy?

Italy signed the European Energy Charter on 17 December 1991. Following this first initiative, Italy (alongside other members of the European Community), signed the Energy Charter Treaty on 17 December 1994 and ratified it on 5 December 1997. The ECT came into force in Italy on 16 April 1998.

On 30 December 2014, Italy notified to the Treaty’s Depository (Portugal) its decision to withdraw from the ECT. Pursuant to article 47(2) of the ECT, Italy’s withdrawal took effect upon the expiry of one year after the date of notification, i.e. on 1st January 2016. The provisions of the ECT will continue to apply to investments made in Italy before such date for a further 20-year period.

2. How are foreign investments in Italy or made by Italian investors protected under other bilateral and multilateral investment treaties?

Italy is a Contracting State of the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (1965, Washington), known as the ICSID or Washington Convention, in force since 28 April 1971.

Italy has signed a total of 179 treaties containing investment related provisions, amongst which 102 bilateral investment treaties ("BITs"). Out of these 102 BITs, 54 are currently in force and entered into with non-EU Member States including China, the United Arab Emirates and Russia. The last BITs concluded by Italy were with Turkmenistan (25 November 2009) and Panama (6 February 2009).

BITs to which Italy is a party contain typical substantive protection provisions such as fair and equitable treatment (even though in some BITs reference is made to “just and fair treatment” or to “equitable” and “reasonable” treatment), most-favoured nation treatment and protection against expropriation. Only a limited number of such BITs contain a protection and security guarantee. Italian BITs also often show the following key procedural features: a six-month cooling-off period and an arbitration clause.

Italy has recently published a new version of its Model BIT (denominated “MODEL BIT Italy – August 2022”). The Model BIT aims at harmonising Italian and EU policies on foreign investments, also in light of the provisions of Regulation (EU) No 1219/2012 establishing transitional arrangements for BITs between EU Member States and third countries. In doing so, the new Model BIT seeks to establish a better balance between investor rights and public prerogatives of the State and incorporates significant novelties in terms of investors’ corporate social responsibility, as well as a code of conduct for arbitrators.

As an EU Member State, Italy is also bound by investment treaties concluded by the EU on behalf of its member states, such as the Comprehensive Economic and Trade Agreement (CETA) with Canada and the EU-Viet Nam Investment Protection Agreement.

3. Does Italy have domestic legislation dedicated to protection of foreign investments?

Italy does not have domestic legislation specifically dedicated to the protection of foreign investments. However, Italy’s foreign investment policy is based on the general principle that financial dealings between Italy and foreign countries are unrestricted, and as such, foreign direct investments (FDIs) can freely be made in Italy.

Still, the entry and establishment of FDIs which relate to certain sensitive activities (e.g., strategic investments in the defence, national security, telecommunications, energy, transport, high-tech and 5G sectors) is subject to prior notification and/or authorisation requirements, and/or to the State’s veto power. In such respect, a particular screening regime (commonly known as “Golden Power” regime) was established by Law Decree No 21/2012 (converted into law by Law No 56/2012 and subsequently amended, as supplemented by various implementing regulations enacted by the government). One of the peculiar features of this regime is that investments by non-EU investors, in addition to being subject to the abovementioned investment review, are also subject to a reciprocity principle. This principle does not apply to citizens or entities of non-EU or non-European Economic Area (EEA) Member States, with which Italy has special bilateral conventions in place for the mutual protection and promotion of investments (e.g., BITs).

4. Does Italy enter into investment agreements with foreign investors offering specific protections?

It is not publicly known whether Italy has entered into tailor-made agreements extending de-facto investment protections to foreign investors. However, administrative contracts are frequently utilised to regulate rights and obligations between the public and private sector.  

By Law Decree No 91/2017, Italy established a regime for special economic zones ("SEZs"), to be created in its Southern regions in order to attract investments from national and international investors in these less economically developed areas of the country. In these Italian SEZs (eight at the date hereof) investors may, inter alia, benefit from simplified bureaucracy and administrative procedures, a favourable tax regime and export tax exemptions.

In addition, there are six free zones (in Trieste, Venice, Portovesme, Taranto, North Brindisi and Brindisi - Capobianco), where goods are regarded, insofar as import duties and taxes are concerned, as being outside the customs territory of Italy.

5. Does Italy have any sector-specific foreign investment incentive laws that offer additional protections?

Italy does not have any sector-specific foreign investment incentive laws which offer additional protections to investors.

6. What kind of protections foreign investments can benefit from under the general principles of law?

Various general principles of Italian law are likely to offer protection to foreign investments.

The right to property is enshrined in Article 42 of the Italian Constitution which, together with Article 834 of the Italian Civil Code, grants protection against expropriation, in that it provides that no one shall be compelled to surrender his or her property, except in the public interest and in return for a fair indemnification.

In addition, the Italian Constitution stipulates, among others, that private economic initiative is free and can be subjected to restrictions only if in contrast with social utility or prejudicial to health, environment, security, liberty and/or human dignity (see Article 41).

Foreign investors might also find protection within the general principles of Italian law applicable to contracts and particularly Articles 1321 and 1375 of the Italian Civil Code under which legally formed agreements are binding on those who made them and should be performed in good faith.

As an EU Member State and member of the Council of Europe, the protections available within the EU framework and under the ECHR, both described above, are available in Italy.

7. Are foreign investors and foreign investments subject to different treatment before the national courts?

A foreign investor can expect to be given treatment no different than the one afforded to local investors before domestic courts. 

8. Is international arbitration a recognised form of dispute resolution between the foreign investor and a State in Italy?

Italy recognises international arbitration as a form of dispute resolution between a foreign investor and a State in Italy. Italy is also party to Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958, New York) and – as already noted above – to the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (1965, Washington), known as the ICSID or Washington Convention. 

Foreign awards are recognised and enforced in Italy provided that (i) their existence is established by the party seeking recognition; (ii) the subject-matter of the adjudicated dispute is suitable to be submitted to arbitration under Italian law; and/or (ii) the award is not – totally or partially – contrary to public policy (see Article 839 of the Italian Code of Civil Procedure). Furthermore, international awards rendered by arbitral tribunals seating in Italy are only subject to the limited annulment grounds listed under Article 840 of the Italian Code of Civil Procedure (which are substantially the same provided for under Article V of the abovementioned 1958 New York Convention). 

Luxembourg

1. What is the status of the ECT in Luxembourg?

Luxembourg is a party to the ECT, in force since 7 February 1997. Following earlier calls to withdraw from the ECT in 2021, the Luxembourg government adopted a decision to withdraw from the Energy Charter Treaty on 18 November 2022. Further to its notification to Portugal, the depositary of the treaty, as published in the Journal Officiel on 26 June 2023, Luxembourg’s withdrawal will become effective on 21 June 2024.

2. How are foreign investments in Luxembourg or made by Luxembourg investors protected under other bilateral and multilateral investment treaties?

Luxembourg is a Contracting State of the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (1965, Washington), known as the ICSID or Washington Convention, in force since 29 August 1970.

Luxembourg concluded approximately 100 bilateral investment treaties (“BITs”) between 1964 and 2010, most of which were signed within the framework of the Belgo–Luxembourg Economic Union (“BLEU”).

Luxembourg is a party to 78 BITs, of which 23 have not entered into force. 

The 2002 BLEU Model BIT is usually offered by the Belgo-Luxembourg Economic Union to the prospective third state for approval. This model was replaced in 2019. The new model text fits in with the transition policy towards a European and multilateral approach to investment protection. The text lists the principles of the reformed European investment protection policy, strengthens the sustainability principles and reinstates the phased-out provisions for the dispute settlement mechanism based on arbitration, thereby supporting the establishment of a Multilateral Investment Court.

BITs between Luxembourg and other EU Member States (“intra-EU BITs”) are no longer in place: Following the Court of Justice of the European Union ("CJEU")’s Achmea-judgment, Luxembourg signed the multilateral Agreement for the Termination of Bilateral Investment Treaties Between the Member States of the European Union, which entered into force on 29 August 2020. Consequently, all intra-EU BITs formerly in force between Luxembourg and other EU Member States have been terminated.

To date, Luxembourg has not been a defendant in a BIT proceeding. 

3. Does Luxembourg have domestic legislation dedicated to protection of foreign investments?

Luxembourg does not have domestic legislation specifically dedicated to the protection of foreign investments.

Investments and property are protected in Luxembourg pursuant to the provisions of Luxembourg law, regardless of their origin.

4. Does Luxembourg enter into investment agreements with foreign investors offering specific protections? 

Information about specific investment agreements with foreign investors are not made public. Luxembourg law provides for a VAT suspension regime for goods introduced into a free zone or free warehouse. 

5. Does Luxembourg have any sector-specific foreign investment incentive laws that offer additional protections?

Luxembourg has sector-specific investment incentive laws, which provide for a legal framework aimed at attracting investors, including the funds industry but also in the aerospace and maritime sectors.

Generally, Luxembourg is a party to a long list of double-tax treaties. Luxembourg's tax legislation also provides for a series of incentives, including tax credits for investment, tax schemes for IP assets (the so-called “IP Box”), financial aid for research and development projects (R&D), a series of tax legislation aimed at its financial sector, with Luxembourg being home to the global fund industry and continuing to be an international finance hub.

In addition to its tax schemes, Luxembourg offers a large panel of investment vehicles and attractive legislation for investors, such as its financial collateral arrangements law of 2005.

6. What kind of protections foreign investments can benefit from under the general principles of law?

Investors may rely on a range of protections not specific to foreign direct investments, but generally available under domestic Luxembourg law. 
This includes Article 16 of the Luxembourg constitution and the corresponding jurisprudence, affording protections in case of expropriation. Such actions must be in the public interest, must have a legal basis and there must be appropriate compensation. These protections also apply to non-Luxembourg legal entities.

Remedy may also be available under domestic law on governmental liability. State action can be challenged in administrative proceedings and administrative courts. Constitutional review is ultimately provided by the Constitutional Court. 

As an EU Member State and member of the Council of Europe, the protections available within the EU framework and under the ECHR, both described above, are available in Luxembourg.

7. Are foreign investors and foreign investments subject to different treatment before the national courts?

As Luxembourg largely depends on foreign investments, foreign investors can expect to be given treatment no different than the one afforded to local investors before national courts. 

8. Is international arbitration a recognised form of dispute resolution between the foreign investor and a State in Luxembourg? 

Luxembourg recognises international arbitration as a form of dispute resolution between the foreign investor and a State, as can be seen from the BITs in force.

However, to the best of our knowledge, Luxembourg has never been a respondent to an investment treaty claim. Therefore, there is no relevant government practice. 

Luxembourg is also party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958, New York) and the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (1965, Washington), known as the ICSID or Washington Convention.

The Netherlands

1. What is the status of the ECT in the Netherlands?

The Netherlands is party to the ECT (at the time these questions were answered), having ratified the treaty on 11 December 1997. However, the Dutch government has recently voiced its intent to withdraw from the ECT.

2. How are foreign investments in the Netherlands or made by (UAE, China, Ukraine, Russian Federation, Turkey) investors protected under other bilateral and multilateral investment treaties?

The Netherlands is a Contracting State of the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (1965, Washington), known as the ICSID or Washington Convention, in force since 14 October 1966.

The Netherlands is party to 80 bilateral investment treaties ("BITs"), five of which have not entered into force, with, inter alia, states like Korea, China, Ukraine, Turkey, and the Russian Federation. The most recent BIT concluded by the Netherlands was with the United Arab Emirates (not yet in force).

Following the Court of Justice of the European Union ("CJEU")’s Achmea-judgment, The Netherlands signed the multilateral Agreement for the Termination of Bilateral Investment Treaties Between the Member States of the European Union, which entered into force on 29 August 2020. 

The Netherlands has recently updated its model BIT. Amongst other things, the Dutch model BIT incorporates provisions regarding corporate social responsibility with an aim to contribute to sustainable development. 

The Netherlands has been a defendant in ICSID arbitration proceedings brought forward against it by the German energy companies RWE v Kingdom of the Netherlands (ICSID Case No. ARB/21/4) and Uniper v Kingdom of the Netherlands (ICSID Case No. ARB/21/22) under the ECT.

3. Does the Netherlands have domestic legislation dedicated to protection of foreign investments?

No, there is no domestic legislation dedicated to the protection of foreign investments. 

4. Does the Netherlands enter into investment agreements with foreign investors offering specific protections?

We are not aware of investment agreements offering specific protections to foreign investors. 

The Netherlands has no special economic zones. 

5. Does the Netherlands have any sector-specific foreign investment incentive laws that offer additional protections?

The Netherlands has a so-called Energy Investment Allowance, in which companies pay less tax if they invest in energy-efficient technologies and sustainable energy. 

In the past, the Netherlands has also engaged in other schemes to encourage investors. For example, in 2022 the Dutch government instituted a subsidy encouraging the stimulation of sustainable energy production and climate transition (also called SDE++). This subsidy was meant for companies that intended to produce renewable energy or to apply CO2-reducing techniques. 

Pursuant to Regulation 2019/452, applicable from 11 October 2020, the EU has introduced a general screening mechanism regarding foreign direct investments into the EU likely to affect security or public order of an EU member state or of the EU, and a mechanism for cooperation between EU member states on the one hand, and between EU member states and the European Commission on the other. In light of the above, the Foreign Direct Investments Screening Regulation Act entered into force in the Netherlands on 4 December 2020. 

7. What kind of protections foreign investments can benefit from under the general principles of law?

As an EU Member State and member of the Council of Europe, the protections available within the EU framework and under the ECHR, both described above, are available in The Netherlands.

As indicated under “Foreign investment disputes and the European Court for Human Rights”, Article 1 of Protocol No. 1 of the ECHR is applicable, meaning property rights are protected within the Dutch legal order. All this is also in line with Article 14 of the Dutch Constitution, which envisions a similar protection. Secondly, investors will be protected under the principle of non-discrimination found in Article 14 of the ECHR.  A stand-alone prohibition of discrimination is also enshrined in Article 1 of Protocol No. 12 to the ECHR, which has been ratified by the Netherlands. Thirdly, investors are protected under the principle of legal certainty. 

Furthermore, the Dutch government can be held liable for damages if it commits an unlawful act. 

In these cases, investors can expect a fair trial and an effective remedy in accordance with Article 6 and Article 13 ECHR.

7. Are foreign investors and foreign investments subject to different treatment before the national courts?

A foreign investor can expect to be given treatment no different than the one afforded to local investors before national courts. It is important to note in this regard that the Netherlands ranks number five worldwide in the Rule of Law Index, which measures among other indicators the accessibility, effectiveness, enforceability, and efficiency of the judicial system (read more). 

8. Is international arbitration a recognised form of dispute resolution between the foreign investor and a State? 

The Netherlands recognises international arbitration as a form of dispute resolution between the foreign investor and a State, as can be seen from the BITs it has concluded throughout the years.

In general, the Netherlands is an arbitration-friendly jurisdiction and it is familiar with investment arbitration proceedings. As a matter of fact, the Hague is home to the Permanent Court of Arbitration and is selected as the seat for several investment arbitration proceedings. Moreover, the Dutch courts are very familiar with investment arbitration and are frequently seized to hear cases in relation to investment arbitration (e.g., setting aside applications and enforcement requests). 

The Netherlands is also party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958, New York) and the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (1965, Washington), known as the ICSID or Washington Convention.

Poland

1. What is the status of the ECT in Poland?

Poland signed the ECT in 1994, ratified it on 24 November 2000, with the Treaty entering into force on 23 July 2001. However, on 6 October 2022, the Polish Parliament passed by a vast majority a law on the withdrawal from the ECT. The act was signed by the President and published on 18 November 2022. It entered into force on 2 December 2022.

Poland's justification for the withdrawal was twofold: first, in Poland’s view international arbitration generates significant costs for State budgets, including Poland's; and second, as voiced for many years now by the European Commission, there is a conflict between the ECT provisions regarding intra-EU investment and EU law.

At the same time, Poland explained that the withdrawal will not immediately exclude submitting disputes to arbitration under the ECT. Under the applicable sunset clause (Article 47(3) of the ECT), the Treaty's provisions will continue to apply to investments already made on the territory of Poland by investors from other states parties to the Treaty for a period of 20 years from the date when Poland's withdrawal from the Treaty comes into force (this also applies to activities undertaken on the territory of other states parties by Polish investors).

Poland also intends to attach to its withdrawal an interpretative declaration aimed at excluding the application of the arbitration clause of Article 26 of the ECT to intra-EU disputes due to its inconsistency with the EU law.

2. How are foreign investments in Poland or made by Polish investors protected under other bilateral and multilateral investment treaties?

Poland is not a Contracting State of the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (1965, Washington), known as the ICSID or Washington Convention, in force since 20 September 1967.

At the time of writing, Poland has signed approximately 430 treaties containing investment-related provisions. These include approximately 65 bilateral investment treaties ("BITs"), of which 35 are in force today and have been entered into with non-EU member States. The latest extra-EU BIT entered into force in 2001 between Poland and Iran.

As an EU Member State, Poland also continues to be bound by investment treaties concluded by the EU on its behalf, such as the recent EU-UK Trade and Cooperation Agreement, the EU Investment Protection Agreements with Viet Nam, Japan or Armenia, or the Canada EU CETA.

BITs to which Poland is a party largely offer the standard substantive protections such as fair and equitable treatment, full protection and security, most-favoured nation treatment and protection against unlawful expropriation. Some of the BITs include typical procedural features, such as a cooling-off period between notice of a dispute and commencement of proceedings, and a clause providing for Investor State Dispute Settlement (“ISDS”). Since Poland is not a member of the ICSID Convention, its BITs will typically offer resolution of disputes before an ad-hoc arbitral tribunal sitting under the United Nations Commission on International Trade Law (UNCITRAL) Rules.

All BITs between Poland and other EU Member States have been terminated following the Achmea decision. 

3. Does Poland have domestic legislation dedicated to protection of foreign investments?

Poland does not have domestic legislation specifically dedicated to the protection of foreign investments.

However, Poland operates a foreign investment screening regime that was initially devised as a part of Covid-19 measures aimed at supporting the Polish economy, but in 2022 it was prolonged until July 2025.

The regime covers a broad scope of acquisitions performed by foreign investors with (i) a pre-closing suspensory approval requirement for direct acquisitions of protected entities, and (ii) a post-closing approval requirement in case of indirect acquisitions of protected entities (e.g., when the transaction concerns the acquisition by a non-Polish entity, of a stake in a Polish protected company, which falls within the regime).

Poland also operates a separate foreign investment regime for (i) investments into strategic companies listed in the Polish Council of Minister’s regulation (13 as at September 2022) as well as (ii) land/real estate acquisition by non-EEA investors.

4. Does Poland enter into investment agreements with foreign investors offering specific protections? 

Dedicated investment agreements extending substantive protections to foreign investors are not publicly available in Poland. However, it is known that Poland has entered into a number of similar agreements in the renewables and infrastructure sectors, and others can be expected for instance with nuclear energy operators. Another type of agreements relates to public-private partnership investments or concession agreements in infrastructure. The specific provisions of such agreements are covered by confidentiality clauses; however, some will include tax stabilization clauses, favourable change in law provisions, etc.

5. Does Poland have any special economic zones in which foreign investments are subject to additional protections to incentivize such investments? 

Poland has established a special economic zone regime to foster the economic development of these zones, including increasing trade balance, employment, increased investment, job creation and effective administration. The primary incentives relate to income tax exemptions determined on the basis of the regional aid map for 2022-2027 (representing % of eligible costs for state aid). Additional local favourable financial policies encompass investing, trading, quotas, customs and labour regulations.

6. Does Poland have any sector-specific foreign investment incentive laws that offer additional protections?

Poland has no sector-specific foreign investment incentive laws that offer additional protections. However, Poland has engaged in support schemes to encourage investments in specific sectors, including favourable remuneration schemes in the renewable energy.

Such schemes take the form of governmental grants for supporting investments of major importance to the Polish economy for the years 2011-2030. They are based on an agreement concluded between the Minister responsible for the sector and the investor. The agreement lays down conditions for the payment of the cash grant, which is paid proportionately to the extent to which the investor’s commitments are fulfilled.

On the municipal level, a municipal council (pl. gmina) may, by way of a resolution, establish a real estate tax exemption for businesses as one of the forms of state aid.

Finally, measures to increase the number of R&D projects include the R&D tax incentive in CIT entitles taxpayers to make additional deduction of expenditure related to R&D activities from the tax base (up to 150%) and a preferential 5% tax rate of qualified income from qualifying intellectual property.

7. What kind of protections foreign investments can benefit from under the general principles of law?

Polish law offers a number of substantive protections that may benefit foreign investors, including: 

• protection against unlawful expropriation, which is permissible only is permissible only if it is done for public purposes and with just compensation; 
• protection from discrimination; or
• protection against negotiations in bad faith; whereby the party that started or conducted negotiations without the intention to conclude a contract is obliged to compensate for the damage that the other party suffered by the fact that it had hoped to conclude a contract.

Administrative decisions of governmental and municipal (including tax) organs may be challenged in administrative courts, including final appeal to the Supreme Administrative Court.

As an EU Member State and member of the Council of Europe, the protections available within the EU framework and under the ECHR, both described above, are available in Poland. For instance, investors will be protected under the principle of non-discrimination found in Article 14 of the ECHR. Investors can also expect a fair trial and effective remedy in accordance with Article 6 and Article 13 of the ECHR.

8. Are foreign investors and foreign investments subject to different treatment before the national courts?

Foreign investors and foreign investments are not subject to being treated differently from local investors and their investments before Polish courts.  

9. Is international arbitration a recognised form of dispute resolution between the foreign investor and a State in Poland? 

Poland generally recognises international arbitration as a form of dispute resolution between the foreign investor and the host State with arbitration clauses being part of the investment treaties and investment-type agreements alike.
Poland is party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958, New York). 
Further, the award may be set aside on limited grounds, which follow the UNCITRAL Model Law. In addition, an arbitral award would be set aside if a final and non-revisable court judgment has been issued in the same matter, or if the award was obtained by means of an offence or on the basis of a forged or altered documents. Poland is considered as an arbitration friendly jurisdiction, where between 2016 and 2020 only approximately 7,5% of setting aside applications before Polish courts  were successful.

However, it must be noted, that Polish Code of Civil Procedure explicitly prohibits granting security for monetary claims against the State Treasury.

Portugal

1. What is the status of the ECT in Portugal?

As of today, Portugal remains a party to the ECT, having ratified the treaty on 17 December 1997. However, in November 2022, the Portuguese Minister for the Environment, announced in Parliament that Portugal’s potential withdrawal from the ECT was being discussed. 

2. How are foreign investments in Portugal protected under other bilateral and multilateral investment treaties?

Portugal is a Contracting State of the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (1965, Washington), known as the ICSID or Washington Convention, in force since 1 August 1984.

Portugal has signed 61 bilateral investment treaties (“BITs”) between 1980 and 2019, with 33 treaties currently in force.

In broad terms, these BITs contain typical substantive protection provisions such as fair and equitable treatment, full protection and security, most-favoured nation treatment and protection against expropriation. 

Moreover, most of these BITs contain a specific investor-state dispute settlement mechanism, usually providing for a six-month cooling-off period and the possibility for investors to resolve investment disputes before national courts or through international arbitration: 

1. before an ad hoc arbitral tribunal sitting under the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL); or
2. before the International Centre for Settlement of Investment Disputes (ICSID). 

As an EU Member State, Portugal is also bound by investment treaties concluded by the EU on behalf of its member states.

BITs between Portugal and other EU Member States (“intra-EU BITs”) are no longer in place: following the Court of Justice of the European Union ("CJEU")’s Achmea-judgment, Portugal signed the multilateral Agreement for the Termination of Bilateral Investment Treaties Between the Member States of the European Union, which entered into force on 29 August 2020. Consequently, all intra-EU BITs formerly in force between Portugal and other EU Member States have been terminated.

3. Does Portugal have domestic legislation dedicated to protection of foreign investments?

Portugal does not have domestic legislation specifically dedicated to the protection of foreign investments. 

4. Does Portugal enter into investment agreements with foreign investors offering specific protections?

Portugal has entered into several investment agreements with investors from a range of different sectors. However, the specific provisions of such agreements are not available to the public. 

5. Does Portugal have any sector-specific foreign investment incentive laws that offer additional protections?

No, Portugal does not have sector-specific foreign investment incentive laws that offer additional protections. 

However, Portugal’s Tax Investment Code provides for the possibility of contractual benefits being agreed with foreign investors in sectors including, but not limited to, energy, tourism, agriculture and information technologies. 

6. What kind of protections foreign investments can benefit from under the general principles of law?

A range of protections generally available under domestic Portuguese law can be relied on by foreign investors.  

In fact, Article 1 of the Portuguese Expropriations Code affords protections in case of expropriation or actions tantamount to expropriation. Indeed, all expropriation must be made in the public interest, proportionate and there must be appropriate compensation. These protections are entirely applicable to foreign legal entities.

An investor may also seek remedy under domestic law on governmental liability. State action, such as that amounting to expropriation, can be challenged in administrative proceedings before administrative courts. 

Further, being an EU Member State and member of the Council of Europe, the protections available within the EU framework and under the ECHR are entirely applicable in Portugal. 

7. Are foreign investors and foreign investments subject to different treatment before the national courts?

A foreign investor can expect to be given treatment no different than the one afforded to local investors before national courts. 

8. Is international arbitration a recognised form of dispute resolution between the foreign investor and a host State?

Portugal recognises international arbitration as a form of dispute resolution between foreign investors and a State, as demonstrated by the multitude of BITs in force. In addition, Portugal is also party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958, New York) and the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (1965, Washington), known as the ICSID or Washington Convention. 

Spain

1. What is the status of the ECT in Spain?

Spain is a party to the ECT, in force since 16 April 1998. On 12 October 2022, Spanish Minister for Energy and Ecological Transition, Teresa Ribera, announced Spain’s decision to withdraw from the ECT, citing climate concerns. According to the Spanish Minister, this decision was made because the process to reform the treaty had led to “no improvements” when it comes to reducing the protections extended to fossil fuel investments. 

Spain notified its withdrawal to Portugal, the depositary of the treaty, on 16 April 2024. Spain’s withdrawal will therefore become effective on 17 April 2025, no less than one year after notification to the depositary.

2. How are foreign investments in Spain or made by Spanish investors protected under other bilateral and multilateral investment treaties? 

Spain is a Contracting State of the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (1965, Washington), known as the ICSID or Washington Convention, in force since 17 September 1994. 

Spain has signed a total of 77 treaties containing investment related provisions. Spain also concluded 89 bilateral investment treaties ("BITs"), of which 60 are currently in force. and entered with non-EU Member States including Ukraine, Turkey, Armenia, Russia and Georgia.

BITs to which Spain is a party contain typical substantive protection provisions such as fair and equitable treatment, full protection and security, most-favoured nation treatment and protection against expropriation. Spanish BITs also often show the following key procedural features: a six-month cooling-off period and an arbitration clause. For instance, there are usually two international arbitration options available to the investor: (i) ad hoc arbitration under the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL) and (ii) institutional arbitration under the Arbitration Rules of the International Chamber of Commerce (ICC) or before the International Centre for Settlement of Investment Disputes (ICSID).

3. Does Spain have domestic legislation dedicated to protection of foreign investments? 

Spain has a favourable legal framework for foreign investor applying the principle of freedom of establishment and non-discrimination. Spanish law adapted its foreign investment rules to a system of general liberalisation, without distinguishing between European Union residents and non- EU residents.

The general regime for foreign investments is regulated by the Royal Decree 664/1999 of 23 April 1999 on foreign investments. All non-resident investors must declare their investments to the Investment Registry of the Ministry of Economy, Industry and Competitiveness: (i) an ex ante declaration applicable only to investments made from a country or territory identified as a tax heaven; and (ii) an ex post declaration regime applicable to all foreign investors, for administrative, statistical, and economic purposes only.

In addition to the general regime, Law 18/1992 of 1 July 1992, establishing rules on foreign investments in Spain, provides a specific framework for non-EU persons investing in certain sectors: national defence-related activities, gambling, television, radio and air transportation. For EU residents, the only sectors with specific rules are the manufacturing and trade of weapons or national defence-related activities.

Regarding the energy sector, under Law 3/2013 of 4 June 2013, creating the National Commission on Markets and Competition, the Ministry of Energy may supervise acquisitions of shares of (or by) companies undertaking regulated energy activities or owners of certain types of key energy assets.

4. Does Spain enter into investment agreements with foreign investors offering specific protections? 

It is not publicly known whether Spain has entered into tailor-made agreements extending de-facto investment protections to foreign investors. However, administrative contracts are frequently utilised to regulate rights and obligations between the public and private sector. 

The Spanish government has created four “free zones” in Ceuta and Melilla, Cadiz, Vigo and the Canary Islands. The special economic zones offer several benefits to investors registered in these free zones such as a reduced corporate tax rate of 4%, a reduced VAT rate of 7%, a tax exemption on transfers, and no custom duties on imports and exports. 

In addition to the above, Spain also has seven free zone ports located in Vigo, Cadiz, Barcelona, Santander, Seville, Las Palmas de Gran Canaria and Santa Cruz de Tenerife. Goods transiting through these ports are exempt of custom duties and VAT. 

Spanish authorities offer companies a broad range of financial aid and incentives to promote investment, competitiveness, and economic growth.These incentives are designed to foster productive investment, research, development, and innovation, that includes incentives for specific industrial sectors which depends largely on the specific characteristics of each investment project. Special subsidies are also available to companies investing in regions with lower economic development. The main kind of incentives are employment aid, special government subsidies and credits. In addition to government aid, each of the 17 regions has its own system of incentives. Investors can approach the regional authorities of the place where they intend to establish themselves to take advantage of both these aids and those of the region (especially for depressed areas).

5. Does Spain have any sector-specific foreign investment incentive laws that offer additional protections? 

Privilege areas or sector for investment aid in Spain are those with capacity to improve job occupation, knowledge, research, investigation and development, renewable energies, tourism, radio and television. Preferred sectors are information technologies, renewable energies and those related to environmental protection.

For example, Royal Decree-law 18/2022 introduced new incentives for investments in renewable energies, permitting unrestricted depreciation/amortization, for corporate income tax purposes, for investment in facilities intended for self-consumption of electricity from renewable sources. 

6. What kind of protections foreign investments can benefit from under the general principles of law?

Investors may rely on a range of protections not specific to foreign direct investments, but generally available under domestic Spanish law. 

This includes various articles of the Spanish Basic Law – the Spanish constitution – and the corresponding jurisprudence, affording protections in case of expropriation or actions tantamount to expropriation. Such actions must be in the public interest, must be proportionate and there must be appropriate compensation. These protections also apply to non-Spanish legal entities.

Remedy may also be available under domestic law on governmental liability. State action can be challenged in administrative proceedings and administrative courts. Constitutional review is ultimately provided by the Constitutional Court. 

As an EU Member State and member of the Council of Europe, the protections available within the EU framework and under the ECHR, both described above, are available in Spain.

7. Are foreign investors and foreign investments subject to different treatment before national courts? 

A foreign investor can expect to be given treatment no different than the one afforded to local investors before domestic courts. Foreign investments are subject to investment screening (see above).

8. Is international arbitration a recognised form of dispute resolution between the foreign investor and a State in Spain? 

Spain recognises international arbitration as a form of dispute resolution between a foreign investor and a State. Spain is also party to Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958, New York) and the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (1965, Washington), known as the ICSID or Washington Convention. 

Additionally, it should be noted that Spain has become an arbitration-friendly jurisdiction. Indeed, during 2021 and 2022 the Spanish Constitutional Court has limited the scope of the “public order” / “public policy” exception as a ground for annulment of awards. The Court unanimously established that the notion of public policy should be interpreted in a very restrictive manner, making the annulment of awards rather exceptional under Spanish law. This ruling limits the judicial court’s ability to review the merits of the case, strengthening the use of international arbitration in Spain.

United Kingdom

1.What is the status of the ECT in the United Kingdom of Great Britain and Northern Ireland ("UK")?

The UK is a party to the ECT, in force since 16 April 1998, independently of its former membership of the EU. It notified Portugal, the depositary of the treaty, of its withdrawal in April 2024. The UK’s withdrawal, which will apply to Great Britian, Northern Ireland, Gurnsey, Jersey and the Isle of Man, will be effective on 27 April 2025. 

MP Graham Stuart (Minister of State for Energy Security and Net Zero) had announced on 22 February 2024 that the UK will leave the ECT to support the government’s plans for a transition to net-zero. 

2. How are foreign investments in the UK or made by UK investors protected under other bilateral and multilateral investment treaties?

At the time of writing the UK is party to over 100 bilateral and multilateral investment treaties. The UK is a Contracting State of the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (1965, Washington), known as the ICSID or Washington Convention, in force since 26 September 1970.The ICSID Convention has been part of UK law since 1967. The UK is currently in the process of replacing trade and investment arrangements from which it previously benefitted by virtue of its EU membership. This includes a new treaty with the EU – the EU-UK Trade and Cooperation Agreement – which contains basic investment protection provisions but no mechanism for investor-state dispute resolution. 

3. Does the UK have domestic legislation dedicated to protection of foreign investments?

The UK does not have any specific domestic legislation dedicated to protection of foreign investors. UK law typically does not distinguish between domestic and foreign investors. Both domestic and foreign investors may rely on general provisions in UK law to protect their investments (e.g. judicial review and human rights legislation). 

4. Does the UK enter into investment agreements with foreign investors offering specific protections?

The UK government does not typically enter into investor-specific investment agreements. 

However, the use of special economic zones has increased markedly over the past ten years in the UK, partly as a mechanism to attract foreign investment after the UK’s departure from the European Union. There are three main types of special economic zone in the UK, as set out below. UK law applies in these jurisdictions, as elsewhere in the UK, but is sometimes subject to certain tax exemptions or simplified regulation. The three types of special economic zone which are either in operation or proposed:

• Enterprise Zones: There are currently 48 Enterprise Zones established across the UK. The concept was first announced in 2011, and the zones have proliferated largely as a result of bids from “local enterprise partnerships”, as well as in response to specific economic circumstances (e.g. job losses at a particular facility). The main benefits conferred on investors are lower level of municipal tax rates and simplified planning regulation. They also aim to foster clusters of businesses in the same sector in one area
• Freeports: The UK now has four “freeports” in operation, which have been established since the UK’s exit from the European Union, and a further four areas have been designated as future freeports. The ports receive government funding for infrastructure improvements and benefit from certain tax breaks and simpler customs controls.
• Investment Zones: The UK government is currently seeking expressions of interest in new “Investment Zones” where certain (yet to be determined) tax and regulatory benefits would apply.  

5. Does the UK have any sector-specific foreign investment incentive laws that offer additional protections?

There are no sector-specific foreign investment incentive laws in the UK that offer additional protections. 

6. What kind of protections foreign investments can benefit from under the general principles of law?

The UK legal system has well-established principles of judicial review, which allow individuals (including foreign investors) to challenge the way in which a decision has been made by public authorities. It is, at least in theory, focussed on the process by which a decision is reached rather than its merits. It includes, for example, government decisions which have been subject to an unfair procedure (e.g. bias or a lack of a hearing); decisions which are contrary to the law; irrational decisions and, on occasion, decisions which breach a legitimate expectation. These categories are neither exhaustive nor mutually exclusive. 

The UK has also signed and ratified the European Convention of Human Rights (the “ECHR”). The Human Rights Act 1998 (the “HRA”) incorporates the rights set out in ECHR, including the right to property, into domestic UK law. Section 6(1) of HRA makes it unlawful for a public authority to act in a way that is incompatible with a right under the ECHR. Individuals can also approach European Court of Human Rights, but only after exhausting remedies before national courts. 

7. Are foreign investors and foreign investments subject to different treatment before the national courts?

No, there is no distinction under UK laws between domestic and foreign investors and investments. A foreign investor can therefore expect to be given treatment no different than the one afforded to local investors before national courts.

8. Is international arbitration a recognised form of dispute resolution between the foreign investor and a State in the UK? 

The UK is widely renowned as a pro-arbitration jurisdiction and is a commonly selected seat of arbitration, as well as frequently an important jurisdiction for enforcement of awards. UK courts generally have a pro-arbitration approach and do not seek to frustrate the decisions of arbitral tribunals, regardless of whether one of the parties to the dispute is a state. 

The UK is also party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958, New York) and the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (1965, Washington). Foreign awards are frequently enforced in UK courts pursuant to those instruments. 

The UK has continued to support investor-state arbitration provisions in new free trade and investment agreements (though less frequently so with other developed countries).