uestion

The year is 2022 and the economy of Santa Barbara, a small island

in the Caribbean, is only now recovering from the devastating effects of the Covid-19 Pandemic which brought the world economy to a standstill for almost two years. The pandemic had a debilitating effect on the economy of Santa Barbara and its government is eager to get the island's economy back on track by attracting as much foreign capital as possible. As such, the Government of Santa Barbara is in the process of developing foreign investment legislation, using the Trinidad and Tobago Foreign Investment Act 1990 as a model, to regulate the activities of foreign investors in Santa Barbara, thereby limiting the ability of investors to capitalise on its current state of economic vulnerability.

Michael Genstein , a citizen of the United States, had been eyeing Santa Barbara as a potential destination for his latest hotel property since before the pandemic. His investment advisors believe that the time is perfect for starting negotiations with the government having heard of Santa Barbara's economic woes and believing that the government will be more accommodating to it various requests, including a 50-year tax holiday, whereby the hotel would be exempt from all taxes including income tax, value added tax, property tax accommodation tax etc. In return for allowing him to invest in Santa Barbara Michael Genstein promises that 70% of his staff will be locals.

Apart from defining 'investments' and 'investor' What are 4 essential provisions that its national law should contain to ensure that its sovereign right to regulate is protected?