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A comparative study of the foreign direct investment laws at the pre-entry stage in Bangladesh and Malaysia

Hossain, Mohammad Belayet (2022) A comparative study of the foreign direct investment laws at the pre-entry stage in Bangladesh and Malaysia. Doctoral thesis, Universiti Utara Malaysia.

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Abstract

The primary purpose of economic globalisation is the economic development of the developing and least-developed countries as well as to facilitate benefits of the home states. Due to recent economic crisis and negative effects of FDI in various places in
the world, many host states has started to adopt restrictive entry regulation for the multinational enterprises (MNEs). These regulatory conditions and restrictions differ between countries, depending on the development goals and objectives of the
respective host states. Accordingly, restrictions on entry and permission imposed by different host states can be categorised primarily into three groups: (a) Sovereignty, national interest and security; and foreign ownership; (b) Capitalisation and performance requirements; (c) Screening of investment proposal and environmental protection. Due to fierce competition and attracting more foreign investments, host states like Bangladesh and Malaysia has lax regulatory laws and policies. Even though FDI has played a key role in the modernisation of Bangladesh and Malaysia’s economy, there are also negative effects, which are caused due to lack of effective legislation and control. Similarly, findings of this study shows that BITs and TIPs of both countries mainly protect foreign investors and lacks specific regulatory
provisions to control them. In this study, six factors: sovereignty, national interest and security, foreign ownership, capitalisation requirement, performance requirement, screening of foreign investment and environmental protection has been selected and
discussed in order to regulate FDI during the pre-entry stage. The primary research question was – to what extent the existing FDI governing laws were comparative at the pre-entry stage in Bangladesh and Malaysia? In this relation, the existing legal
framework, BITs and TIPs of both countries have been critically evaluated. The primary research objective was to compare the FDI laws, BITs and TIPs in both countries. This study adopts qualitative, doctrinal and non-doctrinal legal research and comparative research methodology. The qualitative and doctrinal aspects are
library-based complemented by ten semi-structured interviews, while the comparative aspect involves reference to relevant FDI laws of various host states. The analysis of data employs doctrinal, comparative, thematic, critical and analytical methods. The findings indicate that the existing legal framework of both Bangladesh and Malaysia are not completely harmonious in relation to six factors to regulate foreign investors at the pre-entry stage. Similarly, the BITs and TIPs of both states mainly protect foreign investors and most of them lack specific provisions to cover six factors at the pre-entry stage. Based on the findings, this study recommends that
the Government of Bangladesh and Malaysia could consider including these six factors, either through amending the existing legal framework or the BITs and TIPs. At the same time, implementation of the legal frameworks must be strengthened
further to ensure that the foreign investors are fulfilling all the requirements at the pre-entry stage in both countries.

Item Type: Thesis (Doctoral)
Supervisor : Yeon, Asmah Laili and Abd. Aziz, Ahmad Shamsul
Item ID: 9921
Uncontrolled Keywords: Foreign Direct Investment; sovereignty, national interest and security; capitalisation requirement; performance requirement; screening of foreign investment; environmental protection.
Subjects: H Social Sciences > HB Economic Theory
K Law > K Law (General)
Divisions: Ghazali Shafie Graduate School of Government
Date Deposited: 04 Oct 2022 00:41
Last Modified: 04 Oct 2022 00:41
Department: Ghazali Shafie Graduate School of Government
Name: Yeon, Asmah Laili and Abd. Aziz, Ahmad Shamsul
URI: https://etd.uum.edu.my/id/eprint/9921

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