'Capitalisation Requirement for Foreign Investors and BITs of Bangladesh and Malaysia: A Comparison'.

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. Bangladesh and Malaysia foreign investment laws and bilateral investment treaties (BITs) mainly protects foreign investors; however, neither of them has any specific provision regarding capitalisation requirements during entry of foreign investments. This paper will discuss the negative impact of FDI due to lack of capitalisation requirement provision, and then will highlight the significance of enacting it into the FDI laws or BITs. This paper will address three questions: (a) why the foreign investors should be required to fulfil capitalisation obligation during the entry of FDI? (b) to what extent the existing laws, policies, BITs or TIPs are compatible in relation to the capitalisation requirement? (c) what measures could be taken into consideration to overcome the problems? Using qualitative research method, the authors will critically analyse the existing FDI governing laws, policies, BITs and TIPs of Bangladesh and Malaysia in order to explore whether there is any provision of fulfilling capitalisation requirements by the foreign investors. The authors will also use comparative method to analyse FDI laws and BITs of different jurisdictions in relation to capitalisation requirement to justify of enacting specific regulation by Bangladesh and Malaysia. The findings of this study will show that neither the existing laws nor the BITs (or TIPs) has any specific provision of fulfilling capitalisation requirements. Based on the findings, this study will recommend that the government of both states should consider this important factor; and require foreign investors to fulfil the minimum capitalisation requirement as an entry condition, either through amending the existing laws or through BITs. [ABSTRACT FROM AUTHOR]