Legal Security and its Role in Stimulating Investment
Prof. Yousef Obeidat
Professor of Civil Law
Dean of Faculty of Law
Yarmouk University, Jordan
Legal security is one of the main factors that encourage investment in any country. By its availability, the investor is reassured about his capital from unforeseen amendments, and the legitimate expectations he had established based on the existing legal rules. The public authority must avoid taking away the privileges granted to the investor according to existing laws so as to preserve existing investments and invite more. Therefore, it should not be allowed to cancel exemptions or concessions that were provided by the local legislation to the investor, nor impose new taxes that were not in the investment environment at the time the investment started.
This study explores the role of legal security in the legislative process, and it deals with how to achieve complete legal security for investors, using the provisions of the Jordanian Investment Law and the Law of the Kuwaiti Direct Investment Promotion Authority. In its conclusion, the paper presents a call for the Jordanian legislator to adopt the same rule of Kuwaiti law related to the requirement of legislative stability for the purposes of attracting investments and ensuring mutual interest between the state and the investors. It also recommended the need to make sure when drafting any legislation governing investment that it is clear and supportive of attracting investment.
Keywords: legislation, investment, Jordanian Law, Kuwaiti Law.