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Dr Simon Foote KC launched his book at Bankside last night, ahead of an international speaking tour to Singapore, London, and the US next year.

The Bona Fide Investor is a comprehensive review of the concept of treaty shopping and how it is facilitated by investment treaty criteria for corporate nationality. The book is the first in-depth exploration of a substantive legal basis by which to assess the bona fides of a corporate investor’s nationality: an interpretative approach that looks to the purpose of a claimant’s existence in the ownership structure of an investment is the correct jurisprudential answer to the problem of treaty shopping by manipulating corporate nationality in investment treaty law.

“The book wrestles with the thorny issue of identifying the real or bona fide nationality of an investor,” Dr Foote explained at the launch. “To access the benefits of an investment treaty, an investor needs to show it is a national of one of the treaty states. That is relatively straightforward for natural persons, but much more difficult for companies.”

Many corporations define nationality in investment treaties as the state of incorporation. “The problem is that a simple incorporation test enables nationality to be manipulated by incorporation of a company in a convenient jurisdiction at will.” 

Dr Foote’s research found that developments in the investment treaty area were beginning to develop the same purposive approach as that promoted in tax treaty law, albeit through the principle of abuse of right, rather than by way of treaty interpretation techniques. However, he also found that the parallels between investment treaties and tax treaties hadn’t been recognised, nor analysed. He therefore examined the nascent developments toward a purposive approach to corporate nationality in international law, investment treaty law along with the more developed tax treaty jurisprudence. Dr Foote concluded that investment treaty law ought to follow the lead of the tax treaty cases.

“I am a great believer that if you have a good idea and you take steps to progress it then often doors will open that you never expected. My idea was that there must be a better way to deal with this issue – pivoting toward a test that looked at the commercial purpose of the entity that claimed to be the investor.”

The Bona Fide Investor is available to purchase on the Wolters Kluwer site. You will receive a 20% discount when you enter the code 20BONA2022 at checkout. Offer is only valid until 31st December 2022.

Photo: Dr Simon Foote KC with Sir David AR Williams KNZM KC, a contributor to the book’s Foreword.