Bilateral Investment Treaty (BIT)
"How do bilateral investment treaties protect foreign investors in Turkey?"
Quick Answer
Turkey has concluded a broad network of bilateral investment treaties (BITs) that may grant eligible foreign investors protections such as fair and equitable treatment, safeguards against unlawful expropriation, and (depending on the treaty) access to investor–state arbitration.
International Trade Framework
A Bilateral Investment Treaty (BIT) is an international agreement between Turkey and another state that sets legal protections for qualifying investors and investments. BITs typically address standards of treatment, expropriation safeguards, transfer of funds, and investor–state dispute settlement mechanisms, subject to the treaty’s definitions and conditions.
Key Points to Remember
- BIT protections apply only if the investor/investment qualifies under the treaty definitions
- Core protections often include fair and equitable treatment, non-discrimination, and expropriation standards (treaty-specific)
- Many BITs include transfer-of-funds protections, subject to exceptions and conditions
- Dispute settlement may require a notice/cooling-off period and may allow arbitration (treaty-specific)
Practical Applications
In practice, BIT analysis starts with confirming (i) the applicable treaty, (ii) whether the investor and the asset qualify as a protected “investment,” and (iii) which standards of protection and dispute-settlement options the treaty provides. Where a dispute arises, many BITs require a notice and a negotiation/cooling-off period before arbitration can be commenced (if arbitration is available under that treaty).
BITs do not replace Turkish domestic law obligations; they provide international-law standards of protection and dispute mechanisms that may apply alongside local regulatory, corporate, and tax rules.
Working with experienced trade lawyers and customs brokers helps ensure smooth cross-border transactions and compliance with Turkish trade regulations.
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