The number of bilateral framework agreements is expanding. The number of bilateral investment agreements stood at over 1,500 by the end of 1997. And there were 1,794 double taxation agreements in effect covering 178 countries at the end of the same year. It is increasingly evident that these agreements are difficult to negotiate as they touch, at least in principle, on the entire range of issues related to production and the production process as well as social and cultural factors. Complex issues of national policy are therefore raised, in both developed and developing countries.
Effective agreements have to be balanced.
Foreign direct investment is defined as an investment involving management control of a resident entity in one economy by an enterprise resident in another economy. FDI involves a long-term relationship reflecting an investor's lasting interest in a foreign entity. An equity capital stake of at least 10 per cent is normally considered as a threshold for the control of assets in this context.