Legal protection of foreign investor ownership from political risks in the Kurdistan Region (Analysis Study)

Abstract

The motive that makes most of the developing countries seek foreign investment is that they lack of self-sufficiency of development; that's why most developing countries like Kurdistan Region seek attracting and increasing foreign investment on their land in order to support economic development.

As the foreign investment is one of the most effective factors in national economy, countries seek hard to attract foreign capital fund. In that aspect they improve investment environment and issuing new laws to attract investment, as well as fortifying competition between different investments sectors to widen the category of investors.

However, developing countries still lack of foreign investments pouring, due to obstacles that threaten them such as political dangers. In that aspect, host countries attempted to study the motives of foreign investor for matching them and offering legal means for protecting investments. That means is a successful one for attracting foreign investment, because it keeps investor far away from political dangers and provide him with political protection.

The factors that investor regards in choosing a host country for his investment are the provided guarantees and the stability of the country, politically, economically and legally. Chaos and crises that occurred to the country and its instability made obstacles in the way of foreign investment; it's safer for investor to avoid countries of threats and conflicts.

In this study we discuss the attempts of Kurdistan Region in coping with development of investments through declaring the law No.4 of year 2006, yet it's necessary to deal with the laws of investment by giving more trusted guarantees for investors and giving priority to strategic projects whether agricultural, industrial or touristic.

To conclude, the reasons of foreign investments decrease in Kurdistan Region, after evaluating the experiment for more than ten years. These reasons are political rather than economic. Despite widening the way for foreign investor for choosing the economic field or activity he wishes as he likes. The Kurdistan Region exerted great efforts for attracting investments by facilitating customs procedures, financial, procedural and legal steps; On the other hand, the state hasn't given so wide market that fits huge investments.

Due to the ambiguity of laws in Kurdistan Region, it's necessary that we make guarantees that are more trustworthy and accurate for protecting foreign investments on its land, in order to fulfill all required sides of investment climate and legal protection elements. To provide guarantees of investment in Kurdistan Region we need to form a clear vision about investment climate, and to provide fertile land for attracting investments to achieve economic development for host country. That contributes in making the base and structure of that country for achieving further development and prosperity for Kurdistan Region nation.

The idea of legal protection to guarantee the ownership of investors is one motive that encourages investor to choose Kurdistan Region particularly as investment destination. This idea is about giving investor protection against political dangers that may face the investor with investment prosperities by declaring legal terms for this guarantee in Kurdistan investments laws. By providing these guarantees the investor gets complete protection from political danger e.g. expropriation for common good, nationalization, seizure, imposition of custodianship or preventing the transfer of investment benefits