An Investment Agreement
An investment agreement refers to a document which is used to make the transaction between both the parties, legal and authentic. In this way the parties protect themselves from any regulatory issues that can come in the process in the long run.
At macro level, there are several informal investment agreements that take place everyday around the globe in order to secure investment operations from legal problems. But among these there are two most important investment agreements which play a crucial role in carrying investment transaction, irrespective of the geographical boundaries. These are:
1. Bilateral Investment Agreement
2. Multi-lateral Investment Agreement
Multilateral Investment Agreement refers to a contract designed to support international investments. It is treaty in which rules are mentioned to undertake international investments in a systematic, effective, efficient and uniform manner. Multilateral investment agreement was first negotiated in 1995 -1998 with the members of Organization for Economic Co-operation and Development (OECD). This investment agreement was initiated in order to make the entire international investment system more secure, sound and avoid discriminatory acts among different countries.
International investment in the form of foreign direct investment, franchising, mergers and acquisitions is taking place since decades. These investments should carry specific rules which should be mutually decided by both the investment countries. For this purpose bilateral investment agreements were prepared which clearly mentioned the conditions on which investments can take place between both the countries. The Bilateral investment agreements were initiated in 1960 when the first investment agreement was signed. Since then the demand for these investment agreements have grown significantly.
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These investment agreements carried a significant position among the world of international investment till 1997, but in 1998 its importance diminished as USA refused to become a part of this agreement. In the viewpoint of USA the investment agreement has too many flaws. In short, the proposed agreement in one way can deteriorate the power of USA. Since USA always tries to hold the most powerful position, therefore, they disapproved the conditions of multilateral investment agreements.
An investor who wants to perform his own investment activities must be aware of different investment agreement forms like the most important one is investment agreement for cash transactions, which should be carefully studied before making any cash investments as it is the most liquid form of asset.
MFS investment management and Fisher investments are the most reliable source available online in order to grasp information about investment management agreements. These investor groups have sufficient articles as well samples of legal agreement investment online, to give the investor a clear idea how to prepare investment agreements as well as what are the terms and conditions that are required for the completion of investment agreements.
When the transaction is carried out by investment advisors it is extremely important to enter into an investment advisor agreement with the client in order to make the entire procedure legal and secure. The investment advisor agreements carry all the necessary terms and conditions, fee payments and nature of services, which the advisor is liable to perform. Similarly, it also gives a proper idea to the investor about the responsibilities and duties of the investment advisors.
In short, the investment agreements are an important element of financial transactions. The investment process is incomplete without the use of such agreements.
