Legal Definitions - National treatment

National treatment

National treatment is a clause that is often included in bilateral investment treaties (BITs). This clause requires the host state to treat foreign and domestic enterprises equally.

For example, if a foreign company wants to invest in a country that has a national treatment clause in its BIT, the company will be treated the same as a domestic company. This means that the foreign company will have the same rights and obligations as a domestic company, such as access to the same legal system and protection of its intellectual property rights.

The national treatment clause is designed to promote fairness and equality in international trade. It ensures that foreign companies are not discriminated against in favor of domestic companies. This helps to create a level playing field for all businesses, which can encourage foreign investment and promote economic growth.