Incentives are frequently used as a policy instrument to attract foreign direct investment (FDI), and can be classified as financial, fiscal or other (including regulatory) incentives. Given the important role that incentives can play in attracting FDI, recent IIAs (particularly at the regional and multilateral levels) have tended to deal with them more explicitly, including issues of definition, the application of the non-discrimination principle to regulate incentives, transparency, regulatory standards, and the promotion of development-oriented incentives both on the part of host and home countries.
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