Investing through Free Trade Agreements (FTAs)
Predictable operating environment
Investment commitments in FTAs lock in a minimum standard of treatment and minimum level of market access for our investors. FTAs serve as an insurance policy to prevent a trading partner from changing their laws to become more restrictive, even when governments' policies change.
Standard of Treatment
FTA partners must provide an absolute minimum standard of treatment for investors. This is often defined in the form of fair and impartial treatment as well as full protection and security for the investor. These serve to protect your rights as an investor in the event of discrimination or abuse from a host country.
In the event FTA partners perform an investment seizure, they must meet these requirements: for a public purpose; done in a non-discriminatory manner; according to due legal process; and with the payment of compensation without delay, at fair market value and in a currency that is freely exchangeable.
FTA partners are required to allow the free and unimpeded transfer of funds related in any way to a foreign investment.
Compensation for Losses
FTA partners are required to provide fair and equal compensation for losses stemming from war or political turmoil. More recently, our FTA agreements require partners to compensate foreign investors when damages or destruction are inflicted on their investments by the host state's military or authorities.
FTAs provide an avenue for investors to seek legal action against those who violate their commitments. If a partner violates one of the terms of the agreement, it can be disputed through the Investor-State Dispute Settlement mechanism.
Investor–State Dispute Settlement (ISDS)
The ISDS Mechanism provides a way for investors to submit their disputes for resolution via neutral international arbitration. This allows investor rights to be protected and fosters a political neutrality between countries signing the FTA. The period of consultation required by the ISDS Mechanism also encourages both parties to reach an amicable settlement before going through with arbitration proceedings.
Learn more about Singapore’s International Investment Agreements.