A bilateral investment treaty (BIT) is an agreement between two states designed to encourage and protect investments made by nationals or companies from one country in the other. They provide legal assurances to investors, fostering a stable environment for cross-border investments. Many countries around the world have domestic laws that provide protection to foreign investors, for example, Oman has the Foreign Capital Investment Law, however, BITs make the duty to provide this protection a legal obligation under public international law and offer investors the ability to resort to international arbitration to enforce their rights under the BIT without the need to have a contract between the state and the investor that provides for arbitration.
