Investment Facilitation Implementation Handbook for Latin America & the Caribbean Volume I: Summary Guide COMPETITIVENESS FOR JOBS & ECONOMIC RMA TRANSFORM ATION © 2024 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of the World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy, completeness, or currency of the data included in this work and does not assume responsibility for any errors, omissions, or discrepancies in the information, or liability with respect to the use of or failure to use the information, methods, processes, or conclusions set forth. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be construed or considered to be a limitation upon or waiver of the privileges and immunities of the World Bank, all of which are specifically reserved. Rights and Permissions The material in this work is subject to copyright. Because the World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, the World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. Table of Contents Introduction ................................................................................................................... 6 IFD Agreement: Context ......................................................................................... 9 Structure and content of the Investment Facilitation Implementation Handbook ........................................................................................................................ 14 WBG support for implementing investment climate reforms ........... 35 Table of Acronyms COFEMER – Federal Regulatory Improvement Commission (Mexico) CONAMER – National Regulatory Improvement Commission (Mexico) DIO – Direct Investment Ombudsman ESG – Environment, Society and Governance FDI – Foreign Direct Investment GDP – Gross Domestic Product GVC – Global Value Chain HR – Human Resources ICT – Information Communication Technology IFD Agreement – WTO Agreement on Investment Facilitation for Development IFT – Federal Telecommunications Institute (Mexico) IPA – Investment Promotion Agency LAC – Latin America and the Caribbean LDC – Least developed countries M&E – Monitoring and Evaluation MNC – Multinational Corporation OECD – Organization for Economic Cooperation and Development RBC – Responsible Business Conduct RIA – Regulatory Impact Assessment SDP – Supplier Development Program SOP – Standard Operating Procedure UN – United Nations UNCTAD – United Nations Conference on Trade and Development USD – US Dollar WTO – World Trade Organization 4 Acknowledgements This report was prepared by the World Bank’s Trade, Investment and Competitiveness (TIC) Investment Climate Unit, in collaboration with the Equitable Growth, Finance, and Institutions (EFI) department of the Latin America and Ca- ribbean Region. The report was drafted by a team led by Ivan Nimac and Sylvia Solf and comprised of Daniela Gomez Altamirano, Yago Aranda Larrey, Altagracia Evangelista Cuevas Arthur, Luis Aldo Sanchez Ortega, and Tatiana Whately De Moura. The report was prepared under the supervision of Thomas Haven and Woori Lee and overall guidance of Yira Mas- caro, Doerte Doemeland, Asya Akhlaque, Mona Haddad, and Oscar Calvo-Gonzalez. The team is grateful to peer reviewers Alejandro Espino- sa-Wang and Pierre Sauve for their feedback. This publication is funded by Competitiveness for Jobs and Economic Transformation, a World Bank Group Umbrella Trust Fund. https://www.worldbank.org/en/programs/competitiveness- for-jobs-and-economic-transformation. 5 Introduction The World Trade Organization (WTO) Investment Facilitation for Devel- opment Agreement (IFD) has the objective to increase the participation of developing countries and least-developed countries (LDCs) in glob- al investment flows by improving the domestic and the international business climates and make it easier for investors in all sectors to conduct business. The IFD Agreement provides rules that create clear and consistent global standards for investment facilitation measures, enhance transparency between governments and businesses, simplify and speed up administrative procedures, and provide a global forum to promote best practices and international cooperation.1 The IFD Agreement has the potential to generate global gains.2 This is especially prescient at a time when foreign direct investment (FDI) is a key contributor to the sustainable energy transition, yet LDCs currently receive a mere 2% of global greenfield flows.3 Focused on sustainable de- velopment, the effective implementation of the IFD Agreement will help achieve the UN 2030 Sustainable Development Goals. The IFD Agreement is the first international investment agreement at the global level. During the 13th WTO Ministerial Conference in February 2024 and after over six years of intense negotiations, the text of the IFD Agreement was officially finalized. Currently, the IFD Agreement boasts participation from over 128 WTO members spanning all regions, representing more than three-quarters of the WTO membership.4 A key aspect of the IFD Agreement is that it provides developing coun- tries and LDCs special and differential treatment by allowing them to specify the technical assistance and capacity building support they 1 WTO. 2024. WT/MIN(24)/17, Joint Ministerial Declaration On The Investment Facilitation For Development Agreement, Article 1. 2 Balistreri, Edward J. & Zoryana Olekseyuk (2024). “Investment Facilitation for Development Agreement: Potential Gains.” Yeutter Institute Working Paper, University of Nebraska-Lincoln. 3 UNCTAD, Global Investment Trends Monitor, No. 45. 4 See: https://www.wto.org/english/tratop_e/invfac_public_e/invfac_e.htm. 6 need to implement and benefit from the Agreement. In doing so, WTO member countries that wishes to benefit from the special and differ- ential treatment under the IFD Agreement will have to notify the WTO of the time they need to implement specific IFD provisions, along with their needs for technical assistance and capacity-building. The notification process for developing and LDCs members starts with a needs assessment exercise. Such an exercise involves a detailed mea- sure-by-measure gap analysis with the obligations of the IFD Agreement. The WTO, together with seven international organizations—including the World Bank Group (WBG)—elaborated a Self-Assessment Guide.5 The Guide aims to assist developing and LDCs members in grouping the pro- visions of the Agreement in categories A, B, and C in view of the future implementation of the Agreement, by helping them complete a situation- al/gap analysis and answering a questionnaire on each of the provisions. Building on the Self-Assessment Guide, the WBG developed this Invest- ment Facilitation Implementation Handbook for Latin America & the Caribbean (LAC) as a tool not only to assist countries during the needs assessment by providing good international practices, but as a set of reform guidelines that policymakers could use in the reform process for the full implementation of the IFD Agreement. The Handbook has been developed as a public good to support countries in the LAC region that wish to use the IFD Agreement as a benchmark to attract investment and improve their domestic investment climates.6 The LAC region was chosen given the importance of investment to help the region adapt to geopolitical and structural trends, including climate change, digital transformation, and global value chain realignments. Climate change brings risks and opportunities for LAC. Extreme weather events are becoming more frequent and severe and the high reliance on agricultural exports and tourism in many LAC 5 The international organizations include the WBG, the Inter-American Development Bank (IDB); the International Trade Centre (ITC); the Organisation for Economic Co-operation and Development (OECD); the United Nations Conference on Trade and Development (UNCTAD); the United Nations Economic Commission for Africa (UNECA); and the World Economic Forum (WEF). 6 Although the Handbook has been conceived to support the implementation of the IFD Agreement, it can be generally applied to any reform agenda on investment facilitation. Some of the material offered on each measure goes beyond what is required by the IFD Agreement and the Self-Assessment Guide to include further information on good practices. 7 countries make them particularly vulnerable. Climate policies from major trading partners (US, EU, and China) can bring export oppor- tunities for producers that demonstrate carbon competitiveness. Private investment in mitigation, adaptation, and green sectors (e.g. energy transition mineral value chains) is needed to mitigate the risks and take advantage of the opportunities. Digital transformation is expanding the types of goods and services that LAC countries can offer. Private investment is key to developing LAC’s tech sectors (e.g. Intel’s investment in Costa Rica) and digital- ly-enabled services (e.g. knowledge process outsourcing). Investment is also critical for improving digital infrastructure. Global value chain realignments are underway due to geopolitical tensions and an enhanced focus on risk and resilience from COVID-19. Nearshoring investments in LAC are a key part of this trend. While the Handbook focuses on LAC examples, it is also relevant for poli- cymakers in other regions looking to attract more investment. The LAC Handbook is structured in such a way that each IFD provision can be reviewed independently, given the different nature of each of the provisions of the IFD Agreement. The Handbook provides to policy- makers who focus on specific areas of investment facilitation the steps to conduct a diagnostic regarding the existence and effectiveness of a given measure in the country. The Handbook will also provide policy- makers with reform implementation measures, that together with case studies and further resources, make the Handbook a day-to-day guide for reform implementation. Volume I (below) presents a summary of the Handbook, and Volume II contains a comprehensive analysis of the investment facilitation mea- sures foreseen in the IFD Agreement. 8 IFD Agreement: Context The global economy is undergoing rapid changes, marked by increasing uncertainty. While the world strives to re- cover from the impacts of COVID-19, new and existing developments continue to pose threats to growth and prosperity. Despite the Latin America and the Caribbean (LAC) region’s relative resilience in the face of challenges such as debt stress, limited fiscal space, inflation, and geopolitical conflicts, it is crucial for the region to capi- talize on the opportunities presented by the evolving glob- al economy. Two key areas closely related to investment that require attention are the trend toward nearshoring and the need to mobilize the resources needed to adapt to and mitigate climate change. To seize the opportunities in the new global context, greater integration of the region into the global economy is necessary. Over the past decade, the volume of capital flows to developing countries, when measured as a share of Gross Domestic Product (GDP), has steadily declined.7 Foreign direct investment (FDI) to most countries in LAC has also decreased by 35 percent over the past decade.8 To position itself as a competitive and investor-friendly des- tination, the region needs to enhance its attractiveness by improving its business climate and infrastructure, reduce political risk, and strengthen regulatory institutions. 7 World Bank Group (forthcoming). Global Investment Competitiveness Report 2021/2022; Calculations based on IMF and World Bank data. 8 Maloney, William F.; Ianchovichina, Elena; Riera-Crichton, Daniel; Vuletin, Guillermo Javier; Beylis, Guillermo Raul.2023. The Promise of Integration: Opportunities in a Changing Global Economy. Washington, D.C.: World Bank Group. 9 Figure 1. Inflow of FDI by region, developing economies (US dollars at current prices, millions) 200000 180000 160000 140000 120000 100000 80000 60000 40000 20000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 East Asia and Pacific Europe and Central Asia Latin America and the Caribbean Middle East and North Africa South Asia Sub-Saharan Africa China Source: Maloney, William F.; Ianchovichina, Elena; Riera-Crichton, Daniel; Vuletin, Guillermo Javier; Beylis, Guillermo Raul.2023. Calculations based on UNCTAD FDI data. In a context characterized by volatility, uncertainty, and stagnating capital flows, a revitalized regional investment policy agenda is crucial to foster deep- er integration between LAC and the global economy. The COVID-19 pandemic and its aftermath have brought about volatility and an uncertain outlook for the global economy, influenced by weak macroeconomic prospects, mounting geopo- litical tensions, and the ongoing transformation of global value chains. Factors such as climate change, rising interest rates, and policy shifts in advanced coun- tries have also had significant implications for investment allocation decisions worldwide.9 Scaling up private capital flows to LAC is essential to address these chal- lenges, leverage opportunities, and meet the increasing investment needs for financing the Sustainable Development Goals (SDGs) in the region. According to United Nations Economic Commission for Latin America and the Caribbean (ECLAC),10 the region faces significant challenges in achieving the SDGs by 2030. 9 World Bank Group (forthcoming). Global Investment Competitiveness Report 2021/2022; Calculations based on IMF and World Bank data. 10 Economic Commission for Latin America and the Caribbean (ECLAC), Halfway to 2030 in Latin America and the Caribbean: progress and recommendations for acceleration. Summary (LC/FDS.6/4/ Rev.1), Santiago, 2023. 10 Only 25 percent of SDG targets are projected to be met by LAC countries by 2030, while 48 percent of targets show a positive trend but at an insufficient pace, and the remaining 27 percent are regressing. This is in line with the latest United Nations (UN) estimates.11 To bridge the investment gap and achieve the SDGs, developing countries require investment of over US$4 trillion per year, up from an estimated US$2.5 trillion in 2014. Against this backdrop, negotiations on the legal text of an Investment Facil- itation for Development Agreement (IFD) were concluded at the World Trade Organization (WTO) in July 2023. The IFD initiative, which began in 2017,12 now includes over 128 participating WTO members, with 24 of them from the LAC region.13 This represents over two-thirds of the WTO membership, including more than 65 developing countries and 27 least developed countries (LDC).14 If integrated into the WTO legal architecture,15 the IFD Agreement will be the first agreement on investment at the global level. The IFD Agreement presents a significant opportunity for countries in the LAC region and globally to generate reform momentum and attract investment in a changing global context. Improving investment facilitation frameworks and in- vestment climates will be key to taking advantage of new FDI opportunities, such as the clean energy transition,16 nearshoring trends driven by geopolitical ten- sions, and the growing importance of services sectors in developing economies.17 11 UNCTAD, 2023. World Investment Report 2023. 12 At the Eleventh WTO Ministerial Conference held in Buenos Aires in December 2017 (MC11), 70 WTO members co-sponsored a Joint Ministerial Statement (WTO WT/MIN(17)/59. Joint Ministerial Statement on Investment.) calling for the start of structured discussions with the aim of developing a multilateral framework on investment facilitation. In September 2020, participants formally moved to negotiations. 13 The 22 WTO LAC members currently participating in the IFD initiative are: Antigua and Barbuda, Argentina, Barbados, Bolivia, Brazil, Colombia, Chile, Costa Rica, Dominica, Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Suriname, and Uruguay. 14 For more information on the IFA initiative, including the updated list of participating Members, please refer to the WTO IFA portal: https://www.wto.org/english/tratop_e/invfac_public_e/invfac_e.htm. 15 In the second semester of 2023, IFD participants will advance the discussion on legal incorporation of the IFD Agreement into the WTO legal architecture and further analyze the procedural aspects in full respect of the WTO Agreement. IFD participants will further complete textual adjustments, technical coherence refinements, as well language consistency, with a view to reach another landmark at the WTO’s 13th Ministerial Conference (MC13) in Abu Dhabi. See further: WTO. 2023. Op.cit. 1. 16 Saurav, Abhishek; Viney, Brody B. 2020. Catalyzing Investment for Green Growth: The Role of Business Environment and Investment Climate Policy in Environmentally Sustainable Private Sector Development (English). Washington, D.C.: World Bank Group. http://documents.worldbank.org/curated/ en/464811610960949219/Catalyzing-Investment-for-Green-Growth-The-Role-of-Business-Environment- and-Investment-Climate-Policy-in-Environmentally-Sustainable-Private-Sector-Development. 17 Nayyar et al. 2021 and World Bank and WTO co-publication. Trade in services for development 2023. https://www.wto.org/english/res_e/booksp_e/trade_in_services_and_development_e.pdf. 11 The Agreement promises to be particularly beneficial for low- and middle-income countries (LMICs)18 in the LAC region, which have the lowest levels of adoption of investment facilitation measures.19 By focusing on improving transparency and efficiency of investment-related procedures and institutions, the implementation of the measures under the IFD Agreement can contribute to a more conducive investment facilitation and business environment in LAC. These dimensions are challenges in many LAC economies, especially in low-income countries in the region, and have contributed to declining FDI flows in recent years, as well as limited GVC participation and integration with the global economy.20 For example, countries such as Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Nicaragua and Paraguay do not publish laws and regulations on single portals or on websites of relevant ministries/regulators following good international practices. Others, such as Be- lize, apply ex ante screening mechanisms. Panama or Costa Rica have efficient digital platforms to facilitate investments. Strengthening these dimensions is crucial for boosting investor confidence, reducing establishment and operation- al costs for businesses, and attracting and retaining investments.21 In a recent survey conducted in LAC, foreign investors noted the importance of investment facilitation measures and related ongoing negotiations.22 Over half of the re- spondents considered the measures23 listed in the survey as important or very important. The Agreement also includes provisions that encourage responsible business conduct and anti-corruption measures. The aim is to help countries 18 Low and middle-income countries (LMICs) have been identified as the main beneficiaries according to a recent study modelling the potential economic impact of an IFD Agreement. Balistreri, E. J. & Olekseyuk, Z. (2021). ”Economic impacts of investment facilitation.” Center for Agricultural and Rural Development/Iowa State University, Working Paper Series 21-WP 615. 19 Berger, Axel; Dadkhah, Ali; Olekseyuk, Zoryana (2021): Quantifying investment facilitation at country level: Introducing a new index, Discussion Paper, No. 23/2021, ISBN 978-3-96021-165-5, Deutsches Institut für Entwicklungspolitik (DIE), Bonn, https://doi.org/10.23661/dp23.2021. 20 Maloney, William F.; Ianchovichina, Elena; Riera-Crichton, Daniel; Vuletin, Guillermo Javier; Beylis, Guillermo Raul.2023. The Promise of Integration: Opportunities in a Changing Global Economy. Washington, D.C.: World Bank Group. 21 World Bank Group. 2020. Global Investment Competitiveness Report 2019-202: Rebuilding Investor Confidence in Times of Uncertainty (English). Washington, D.C.: World Bank Group. http://documents.worldbank.org/curated/en/403901590645496246/Global-Investment-Competitiveness- Report-2019-2020-Rebuilding-Investor-Confidence-in-Times-of-Uncertainty. 22 IDB/ITC/DIE (2022). What foreign investors want: Findings from an investor survey of investment facilitation measures in Latin America and the Caribbean. Geneva: International Trade Centre (ITC). 23 Measures listed included: Information and transparency; One-stop-shop services; E-government Service; Stakeholder-government consultations; Outward FDI support services (by home countries); Streamlining administrative procedures; The role of IPAs; Measures that directly increase the development impact of FDI 12 attract not only more but also higher-quality investments that contribute to sustainable development.24 In addition to the IFD Agreement, investment facilitation provisions are in- creasingly included in international investment agreements (IIAs), indicating the growing importance home and host alike countries attach to facilitating investment. While the primary focus of IIAs has traditionally been to attract for- eign direct investment (FDI) by safeguarding foreign investments against political and other risks, countries are now acknowledging the need to include facilitation and promotion provisions in these agreements. For instance, the recently signed Regional Comprehensive Economic Partnership Agreement (RCEP, Asia-Pacific re- gion), one of the largest preferential trade and investment agreement covering nearly 30 percent of global GDP, includes specific investment promotion and fa- cilitation provisions within its investment chapter. Enhancing the work of investment promotion agencies (IPAs) as key institu- tions in the context of FDI attraction and facilitation will be an important en- abler to increase FDI inflows, attract higher quality FDI, and transform host country economies. Some countries in the region do not have a functional IPA at the moment (e.g., Mexico and Guatemala) and existing IPAs in the region have diverse functions and levels of performance. At the same time, IPAs can play a vital role in providing information, facilitating transactions (such as securing permits and navigating bureaucracies), connecting investors with local suppliers, and advocating for reforms to improve the overall business climate. Estimates suggest that every US$1 spent on investment promotion could result in up to US$189 in FDI inflows, and a relatively modest US$78 of investment in promo- tion efforts could create one additional job in the promoted sectors.25 In conclusion, prioritizing investment facilitation in the LAC region is crucial, considering the current challenges associated with cross-border investments, which often involve high costs and time-consuming processes. Investment fa- cilitation efforts in LAC should focus on reducing costs by enhancing, stream- lining, and standardizing the procedures and regulations governing FDI inflows. Governments in the region can utilize this handbook to advance solutions that foster improved coordination, collaboration, transparency, information sharing, and the establishment of governance structures that facilitate the implementa- tion of key reforms and specific enhancements to investment-related procedures. 24 Market access, investment protection, and investor-State dispute settlement are explicitly excluded from the scope of the Agreement. 25 Harding, Torfinn and Javorcik, Beata, (2011), “Roll Out the Red Carpet and They Will Come: Investment Promotion and FDI Inflows,”Economic Journal, 121, issue 557. 13 Structure and content of the Investment Facilitation Implementation Handbook The handbook provides guidance on how best to imple- ment the IFDA, focusing on 16 investment facilitation measures across seven topics. The measures were cho- sen based on the experience of the World Bank’s Global Investment Climate Unit and their inclusion in the IFD Agreement.26 They are grouped into seven topics repre- senting key dimensions of effective investment facilita- tion frameworks. For a comprehensive analysis of the 16 investment facilitation measures, refer to Volume II of the Handbook. The following topics (A-G) and measures (1-16) are covered by the Investment Facilitation Implementation Handbook: A. Enhancing the accessibility and transparency of investment policy measures: Public sector transparency is one of the key building blocks of a sound regulatory environment for investors. For domestic and foreign investors alike, information about rules and regulations, including how they are implemented and how they may be changed, is often a critical input to investment decisions. This section focuses on two key IFDA measures: Measure 1 – Publication and advance publication of investment measures: Publication of all laws, regulations or other legal in- struments, and advance notice of proposed regulatory changes, increases regulatory predictability. Countries may publish new laws or regulations and provide advance notice through a journal, gazette, website, or other public source of information. Good practices include the publication of drafts and final versions of all 26 Not every article of the IFD Agreement or obligation is represented. Sections of the Agreement that do not contain directly implementable measures have been excluded such as Section I (Scope and General Principles), Section V (Special and Differential Treatment for Developing and Least-Developed Country Members), as well as Section VII (Institutional Arrangements and Final Provisions). This also extends to obligations that are specific to the IFD Agreement (e.g., Art. 11 - Notification to the WTO). 14 different types of legal instruments, and providing a reasonable time period between the publication of laws and regulations and the date by which investors must comply with the law or regula- tion. It is also considered a good practice to include information that explains the policy rationale of the new legal instrument. Example of good practice: Costa Rica’s regulatory improve- ment platform. The Government of Costa Rica established, in the Department of Regulatory Improvement, the strategic goal of promoting actions for regulatory improvement and simplification of procedures. Transparency of regulatory changes is crucial for guaranteeing predictability for citizens and businesses. All regulations in Costa Rica are published on La Gaceta website. Additionally, the Government of Costa Rica launched the platform Trámites Costa Rica: Sistema de Simplificación de Trámites y Mejora Regulatoria, which enables users to search for procedures, regulations or draft regulations; plans for regulatory improvement by agencies; public consultations (active or finalized) by subject and/or by agency; and check their calendar for planned activities. Measure 2 – Availability and accessibility of information: The benefits of publishing legal instruments affecting foreign investors and investments are diminished if investment-related information is not easily accessible. Information should be presented in a clear and understandable manner, in multiple languages if necessary, and accessible through multiple channels. Such information may be made available in different ways and by different agencies, in the form of a consolidated “guide”, or on an easily accessible website that breaks down the different types of information or provides links to other websites that contain additional information. The recommended solution is a single information portal (see Measure 5). The information provided needs to be regularly updated and made available to users at no cost. Example of good practice: Mexico’s National Catalog for Regulations, Administrative Procedures and Services. In 2017, a Constitutional reform established that authorities from all levels of government (federal, state, and municipal), as well as the legislative and judicial branches, should imple- 15 ment better regulatory policies. As a result, the General Law for Regulatory Improvement was passed in 2018. The Na- tional Regulatory Improvement Commission (CONAMER) re- placed the previous federal focused commission COFEMER. The National Catalog now includes not only Federal but also State and Municipal administrative procedures. Information on administrative procedures is submitted to CONAMER through State and Municipal Regulatory Improvement Com- missions or Agencies. B. Improving the efficiency and effectiveness of investment-related administrative processes: Efficient and effective authorization procedures that enhance transparency, predictability, and legal certainty can help improve trust between investors and the gov- ernment authorities that issue authorization decisions. A sound service delivery framework for authorizations can help reduce both regulatory uncertainty and compliance burdens for investors. It also reduces the administrative burden on the government by leveraging shared assets and infrastructure among the relevant authorities. This section focuses on three key IFDA measures: Measure 3 – Streamlining Investment Authorization Procedures: Streamlining authorization procedures can involve a range of reforms to improve government to business (G2B) services. These can include reforms to the legal framework, such as introducing a common framework for authorizations as well as reforms to the institutional and administrative framework for managing and processing authorizations, such as realigning regulatory authorities, introducing service delivery standards, and redesigning authorization related services. The general trend has been towards the standardization and integration of investor support services, with some variation across countries. Countries can tailor their implementation approaches based on priorities, the availability of resources as well as gaps identified by a diagnostic. Example of good practice: Peru’s implementation of its law on administrative procedures. Peru has focused on improv- ing the quality of regulations and regulatory procedures for at least three decades. In 2001, the General Administrative 16 Procedure Law was approved, which includes provisions to regulate the approval of administrative procedures, their re- quirements and costs, and their systematization in the TUPA - Single Text of Administrative Procedures. In the last cou- ple of decades, Peru has implemented additional measures of administrative simplification, such as the publication of Na- tional Plans for Administrative Simplification (in 2010 and 2013), implementation of interoperability for service inte- gration, publication of a National Policy of Modernization of Public Management (in 2013), and the launch of a platform for elaboration, approval and publication of TUPA (in 2016). This platform, called Sistema Único de Trámites (SUT), pur- sues simplification through the reduction of processing fees, times, requirements, deadlines and the elimination of redun- dant administrative procedures and services. In 2016 Peru also issued a Legislative Decree prohibiting public agencies to request unnecessary information or information that could be obtained through interoperability with public agencies. Measure 4 – Streamlining Investment Screening and Approval Mechanisms: Investment screening can have multiple underlying policy justifications. Cumbersome investment approval processes, including FDI screening, are the most common regulatory barrier affecting FDI. If countries decide to screen foreign investments, the screening and approval mechanism should be stream- lined, objective, and transparent. This can be supported through measures such as the use of targeted screening with limitations in scope and coverage, the use of clear definitions in the scope of screening, adoption of pre-screening clearance procedures, the setting of objective criteria for screening decisions, the tailoring of screening procedures around specific risks, and increasing the transparency of screening rules and procedures. Example of good practice: Improved FDI screening contrib- uted to foster FDI in Chile. Since 1974, more than 85% of Chile’s foreign investment has been channeled under the at- tractive scheme granted by DL600, which defined a very solid legal framework for FDI at that time, including key promotion and protection dimensions. However, under such scheme investments required both prior authorization for 17 entry into Chile, and the execution of a foreign investment contract between the foreign investor and the State of Chile. The adoption of a new law (20.848) in 2015 replacing DL600 enabled an ex-post authorization mechanism by the newly created Investment Promotion Agency InvestChile. Foreign investors no longer require prior authorization for in- vestment entry into Chile, nor is the signature of an invest- ment contract between the foreign investor and the State of Chile needed. As a result of the new law, InvestChile was vested with the mandate of extending foreign investment certificates within 15 days. This legal change contributed to maintaining Chile’s solid FDI performance reaching 20.86 billion USD of FDI inflows in 2022 and 20.4 billion USD in 2023, just down 2.4% from the 2022 record. Measure 5 – Digitalizing investment facilitation: Jurisdictions that have implemented single information portals and digitalized investment and business authorizations have been successful in reducing regulatory burdens while increasing the predictability of investment regimes. A first step in digitalizing investment facili- tation is often the establishment of a comprehensive online single information portal. Such a portal consolidates all pertinent infor- mation on investment authorizations and regulatory measures and addresses gaps in regulatory transparency. Digital process- ing of investment authorizations also involves digital transac- tional services, including online submission of application forms, online payment of authorization fees, online tracking of the appli- cation status, digital processing of applications, electronic data sharing for coordination of involved regulatory bodies, and the digital issuance of authorizations. Example of good practice: Mexico’s Single Window for In- vestors and Single Registry for Investment Projects. Mexico has made significant strides in leveraging digital technolo- gy for public services through the National Single Window since 2015. In 2023, Mexico decided to strengthen the inte- gration of services for investors. The objective of Mexico’s Single Window for Investors (Ventanilla Única para Inver- sionistas) and the Single Registry of Investment Projects initiatives is to promote transparency, legal certainty, and reduce administrative burdens. The single window provides 18 (i) information related to procedures for the establishment of investment projects, on competent authorities, require- ments, costs, and other relevant information; (ii) guidance regarding procedures and regulations; and (iii) information on relevant aspects regarding investments, such as com- munication channels, supply chains, workforce, infrastruc- ture and other available goods and services, by geographical location in the national territory. Users can navigate the platform searching by services or procedures by economic sector or by federal entity. While the single window is a comprehensive online single information portal, the Single Registry for Investment Projects is a mechanism for admin- istrative facilitation where investors can submit their appli- cation sand receive support from the Ministry of Economy. C. Strengthening the governance of authorization processes: Strength- ening the governance of the authorization process is important to en- sure that the process is fair, objective, transparent, and consistent, and perceived as such. Effective governance helps to prevent abuses of power, undue administrative discretion and corruption. This section covers two IFDA measures designed to strengthen the governance of authorization processes: Measure 6 – Independence of Competent Authorities: It is crucial that the authorities overseeing the authorization process are free from undue influence, political pressure, or conflicts of interest. The independence of authorities making authorizations refers to the degree of autonomy and impartiality that these au- thorities have when making decisions related to granting permis- sions or licenses for certain activities, such as construction permits or business licenses. To promote independence, agencies making authorizations are often established as separate bodies, with clear mandates, funding, and independent decision-making powers. Example of good practice: Creation of an autonomous telecommunications and broadcasting regulator in Mexico. Thanks to a constitutional reform, an autonomous telecom regulator—the Federal Telecommunications Institute (IFT)— was created in 2013. The reform included: ample powers to 19 the IFT to enforce independent regulation and competition competencies for the telecom and broadcasting sectors; the possibility to impose asymmetric regulations on play- ers with substantial market power; the creation of special- ized courts and elimination of the suspension of regulations during legal injunction trials; and the elimination of FDI re- strictions for all telecom services and satellite communica- tions, as well as FDI restrictions for the broadcasting sec- tor based on reciprocity rules. By 2016, the reform showed tangible impacts, such as greater competition, significantly reduced prices, a broader service offering, more investment in infrastructure and FDI, technological improvements, and better quality of services. Measure 7 – Appeal and Review Mechanisms: Appeal or review processes contribute to safeguarding the rights of investors and ensuring that their applications are evaluated fairly. Such mechanisms vary across jurisdictions and can be governed by specific statutes, regulations, or administrative procedures. They often involve a hierarchical structure where an aggrieved investor can seek redress through multiple levels of review, starting with an internal appeal within the administrative body itself and, if necessary, progressing to external agencies appointed for this purpose, administrative tribunals, or the judicial system. The purpose of the appeal and review process is to strike a balance between administrative efficiency and the protection of investors and their interests. It provides an avenue for investors to present their arguments, evidence, and legal interpretations, and to have an impartial and independent authority review administrative decisions to determine their fairness, reasonableness and com- pliance with applicable laws and regulations. Generally, there is no one size fits all approach to ensuring a good review or appeal process, but certain principles that each country should adopt include transparency, fairness and impartiality, consistency, pre- dictability, and accountability. Example of good practice: Jamaica’s process to strength- en the appeal and review process. Jamaica established an internal appeals process as an alternative to an often time-consuming and relatively expensive judicial review pro- 20 cess, which effectively restricted small- and medium-sized taxpayers’ right to an appeal. However, the internal ap- peals process as originally formulated did not represent an efficient and credible alternative to judicial review by the courts. The Government of Jamaica undertook an ambi- tious reform that included the design of a new process and software requirements, drafting of the legal instrument, change management of the appeals institution, a public communication plan, design of key performance indicators, and training of relevant staff. The objective of the reform was to create an appeals process that enabled an average appeal time of six months from the time the case was ac- cepted and 60 days from the date a hearing was concluded, without compromising the quality of the appeals decision. D. Building strong and effective relationships with investors: Effec- tive investment facilitation requires building durable and sustained relationships with investors. Investors often seek a direct counter- part to contact for information requests or to solve any issues they are encountering. This applies to all stages of the investment lifecy- cle, including entry, establishment, operation, and exit. This section focuses on two specific IFDA measures targeting such relationships: Measure 8 – Focal Points to provide information, assistance, and advocacy services: Focal points that are tasked with answering investor enquiries and assisting investors in their deci- sion-making and investment process can help overcome informa- tion asymmetries that often constitute an important constraint on capital flows across international borders. In many cases, In- vestment Promotion Agencies function as focal points. Sound investment promotion models and facilitation mandates for focal points share some essential characteristics. The mandate will call explicitly for the IPA to deliver specific services, such as marketing the host country to desirable potential investors, providing infor- mation and assistance to companies trying to start operations, and advocating for a better investment climate. To deliver quality information services, focal points must maintain information that is credible, accurate, relevant, and comprehensive. Beyond information services, focal points, especially if housed within an 21 IPA, may proactively help support investors during exploration, establishment, operation, retention, and expansion. As an addi- tional service, advocacy services may help promote key investment climate reforms. Example of good practice: Costa Rica’s IPA (CINDE). Since its inception, CINDE has continuously sharpened its strate- gic focus, evolving from an all-purpose development agency when founded in the mid-1980s to a fully focused IPA at- tracting and expanding FDI projects by providing all types of services to investors. It has also refined its sectoral focus from broad light manufacturing in the early 1990s to stra- tegic and specific global value chain (GVC) links by the late 1990s. At the same time, CINDE improved its service offer- ings beyond the initial stage of attracting investment. CINDE now proactively accompanies strategic investors throughout their investment journeys. Advocating on behalf of investors and proactively connecting investors and government as a focal point, CINDE has helped catalyze key reforms, unlock strategic investments, and increase the country’s participa- tion in GVCs tenfold in the past three decades. Measure 9 – Retention Mechanisms: Retention mechanisms help to identify and resolve investor issues, thereby enhancing investment expansion and retention. Investors may experience a multitude of issues running their operations in countries. Some of these issues, if not addressed, can lead to divestment decisions or to legal disputes and thus entail significant risks for host countries. Retention mechanisms include (i) targeted aftercare programs to address operational risks, (ii) grievance management mechanisms to address political and regulatory risks, and/or (iii) comprehensive retention programs addressing both types of risks. There is no “one-size-fits all” model, but some general principles apply to all. These include empower- ing a lead agency, detecting and recording investor issues, con- ducting legal and economic assessments, using problem-solving methods, and enabling timely political decision-making. Example of good practice: Brazil’s Direct Investment Om- budsman. To increase efficiency-seeking FDI and address bottlenecks faced by foreign investors, which included in- 22 creased operational costs, corruption, frequent changes in laws and regulations, and issues with the implementation of investor rules, Brazil established the Direct Investment Ombudsman (DIO). Access to the DIO was broadened to include investors from all counties even in the absence of a ratified Cooperation and Facilitation Investment Agree- ment. DIO’s two main functions are to address (i) inquiries to provide information to potential and existing investors concerning legal and regulatory procedures to enter and op- erate in the country and (ii) investors’ grievances. The DIO also benefits from a grievance tracking tool and external website. Through this website and tool, officials can receive, track, and follow up on all investors’ issues and grievances from the time they are submitted by investors to their res- olution. The platform also allows the government to obtain aggregate data on the most recurring types of grievances, the agencies involved, the time it takes to solve grievances, and other relevant measures. E. Fostering Multinational Corporation (MNC)-supplier relation- ships: Besides the direct benefits that FDI brings in terms of in- creased capital, employment, and exports, MNCs also contribute indirect economic benefits by raising the productivity of local firms and offering a channel for local firms to diversify their production and integrate into GVCs by supplying MNCs. This section focuses on two measures that support strengthened linkages with local suppli- ers by addressing market failures such as information asymmetries and facilitating spillovers: Measure 10 – Domestic Supplier Databases: Creating a database of domestic suppliers can help MNCs identify and match with local suppliers. This can be done in combination with the provision of qualification and certification programs for domestic firms that make it easier for MNC affiliates to identify suitable local suppliers. Supplier databases reduce MNC search costs by making information readily available, promote stronger linkages with local suppliers, and help boost the local economy. The design, set-up, and features of supplier databases 23 may vary significantly to fill specific information gaps. While they may be operated by public bodies, they are in many cases hosted by the private sector. The rise of digital technology and of business-to-business platforms has transformed buyer-sup- plier relationships, offering new ways for buyers and suppliers to connect and network. Example of good practice: Costa Rica’s matchmaking da- tabase. In Costa Rica, CINDE has developed a comprehen- sive database on local suppliers. CINDE reports that its lo- cal supplier directory has been a key component in helping companies start operating in Costa Rica. In 2015, CINDE at- tracted a total of 39 new projects in the services, advanced manufacturing, life sciences, light manufacturing, and food industry sectors. Each of the new investors made use of the service provider directory during their scoping and establish- ment phases. Measure 11 – Supplier Development Programs: Supplier de- velopment programs (SDPs) can be useful tools to boost FDI linkages and upgrade local firm capacity. Such programs address information asymmetries by arranging special matchmaking events at which local suppliers and MNCs explore possible part- nerships. The programs can then work together with the MNCs to develop appropriate training and capacity-building programs so that local suppliers can produce the necessary inputs at the required quality standards in return for supply contracts. Targeted incentives for skills upgrading and supplier engage- ment may be deployed as successful features of SDPs. When designing a supplier development program, several key princi- ples should be observed, including adopting a demand-driven approach, targeting appropriate MNC affiliates and domestic firms, supporting localized development policies, and establish- ing and maintaining long-term goals and commitments to partner- ships, among others. Example of good practice: Costa Rica – Anchor investments to develop Supplier Capacity. In November 1996, Intel es- tablished a microprocessor assembly and testing factory in Costa Rica—positioning the firm as the largest foreign in- 24 vestor in the country at the time. As part of its attraction and post-investment strategy, the Costa Rican government worked resourcefully to enhance the country’s technical edu- cation, incentives law, regulation, and infrastructure to at- tract this “anchor investment” and maximize its linkages and spillovers. In the late 1990s, Costa Rican officials, inspired by visits to Asian countries with robust Local Industry Up- grade programs, launched Costa Rica PROVEE, a program to develop local suppliers. Spearheaded by organizations like CINDE, the Chamber of Industry, and PROCOMER (Cos- ta Rica’s trade promotion agency), along with private sec- tor companies, this initiative aimed to deepen the economic impact of foreign investment through the multiplier effect and anchor foreign investors via strong local supplier rela- tionships. Intel worked with local companies to help raise their quality and cost competitiveness to meet global stan- dards, for example, in cardboard packaging. F. Improving investment policy- and law-making processes: Legal certainty and a predictable regulatory framework for investors can help attract and retain investments. This also extends to the poli- cy- and law-making process given that regulatory changes can sig- nificantly impact future investment conditions. This section focus- es on three important IFDA measures: Measure 12 – Public Consultation on Investment Measures: Providing citizens and the business community, including foreign investors, the opportunity to comment on proposed policy changes before they are enacted is an effective way to improve the law-making process. Doing so promotes transparency, informed decision-making, and legitimacy by allowing stakeholders to better understand and contribute to the development of laws and regulations. Governments can conduct public consultations through websites, gazettes, newspapers, and public hearings, and more targeted outreach to specific parties. Highly specialized or complex regulatory areas (e.g., sectoral regulations) may need more selectivity in consultations than regulatory regimes of wider public interest and impact. Feedback can also be gathered through polls, surveys, focus groups, citizens panels, and workshops. 25 Example of good practice: Colombia’s platform to enable public consultation on draft regulations. Colombia’s Nation- al Planning Agency developed an online platform, SUCOP, that presents public consultations on draft regulations of national and territorial executive branch agencies. It provides a list of public consultations and enables searches by year, sector, agency, type of document, etc. Each public consulta- tion has a summary and supporting documents. Comments and suggestions are submitted through the platform and users must register and log in to submit comments. When the consultation is finalized, SUCOP makes available a docu- ment with the compilation of comments received and anoth- er document with a report on the results of the consultation. SUCOP increases transparency and citizen participation in regulatory elaboration through a centralized platform with standardized processes and information. Between 2020 and October 2023, SUCOP published 306 public consultations from 33 agencies and received 2961 comments from various stakeholders Measure 13 – Regulatory Impact Assessments (RIAs): RIAs evaluate, in quantitative and/or qualitative terms, the potential economic, social, and environmental impacts of new regula- tions and help policymakers to identify the costs and benefits of different policy options, in consultation with relevant stake- holders. RIAs help ensure that regulations are designed in a way that achieves intended goals while minimizing potential adverse effects. Depending on a country’s administrative capacity, a simplified RIA (or “RIA Light” system) can be deployed. This approach is designed to gradually improve regulatory quality and initially applies only to major regulatory proposals. Example of good practice: Mexico’s electronic RIA system. During the 2000’s, COFEMER worked on setting-up the baseline for regulatory governance tools, including a RIA system, as well as coordination mechanisms with the feder- al administration. By 2010, RIA guidelines included ex ante impact analysis of draft regulations, followed in 2012 by in- corporating in the RIA questionnaire competition and risks components. The ex-post RIA was also introduced in 2012. 26 In 2016 the RIA incorporated foreign trade and consumer protection components, and in 2019, a human rights com- ponent. In 2017 a constitutional reform was passed by the Congress, which mandated the enactment of the Regulato- ry Improvement General Law (LGMR), obliging the 31 states and Mexico City, as well as 2,469 municipalities to imple- ment regulatory governance policies, including the mandate for states and Mexico City to issue regulatory improvement state laws and the implementation of state-level RIAs. Un- der the new regulatory governance framework, between 2018-2019, CONAMER issued 1,690 simplification rec- ommendations to 929 administrative procedures. In June 2019 the regulatory burden represented 4.4 percent of GDP. By November 2020, after implementing the simplification recommendations, the regulatory burden was estimated to be 2.2 percent of GDP, which represented savings of MXN $20,178 million (about US$ 1 billion). Measure 14 – Periodic Review of Investment Facilitation Measures: Periodic ex post reviews assess whether a regulation has achieved its original objectives and whether it needs to be improved or eliminated. Evaluating existing regulations, the final stage in the regulatory process, is an important element of the regulatory policy cycle. There are three types of ex post reviews: i) programmed reviews; ii) ad hoc reviews; and iii) ongoing stock management.27 All reviews should involve consultations with affected parties and, to the extent possible, be accessible to civil society. Example of good practice: Chile’s ex post law evaluation framework: To create a systematic approach to ex post evaluations of laws and regulations, the Law Evaluation De- partment was established by the Chilean Congress in 2010. The department’s main competences are: i) assessing of legal norms passed by the Congress; ii) establishing a meth- 24 Ongoing stock management includes administrative processes that enable learning-by-doing as regulations are implemented; as well as offset rules for new regulations and burden reduction targets (such as various “red tape reduction” initiatives) as a means of reducing the number and cost of existing regulations. 27 odological framework for ex post evaluations, including dif- ferent types of impacts (i.e., economic, financial, social, cul- tural, environmental, etc.); iii) involving social organization networks interested in participating in the review process; and iv) recommending reforms to laws. The Law Evaluation Department has focused on involving civil society in its eval- uations. It has tools and mechanisms to collect information on citizens’ perceptions. Additionally, the Citizen Forum is an open space where civil organizations and citizens can participate in-person or virtually. G. Facilitating sustainable investments: Sustainable development, as outlined in the UN SDGs, is multifaceted and includes measures re- lated to poverty reduction, protection of the environment, strength- ening institutions, and improving human conditions. Sustainable in- vestment calls for countries to promote a positive contribution by enterprises to economic, environmental, and social progress. This section focuses on two IFDA measures designed to promote the attraction and retention of sustainability-enhancing investments: Measure 15 – Promoting responsible business conduct (RBC): Promoting RBC is of central interest to policymak- ers wishing to attract and retain investment and ensure that business activity contributes to broader value creation and sus- tainable development. RBC expectations are prevalent through- out global value chains and are affirmed in the main interna- tional instruments on RBC, such as the OECD Guidelines for Multinational Enterprises and the UN Global Compact. Increas- ingly, RBC standards are also enforced through supply chain laws originating in developed countries, e.g., the German Supply Chain Act. These laws provide an opportunity to improve RBC, but its implementation need to be carefully considered. Govern- ment support for RBC is essential to ensure coherence between their own policies and business conduct, as well as to support domestic firms as they increase their participation in GVCs. Example of good practice: Sustainable Perú. Perú Sostenible, is a conglomerate of companies that promote sustain- able development in Peru, also known as ‘Peru 2021’. They 28 launched a database called Marcas que Marcan, together with Kunan, a platform that bolsters a social and environ- mental entrepreneurship ecosystem. They have developed the first domestic supplier database with sustainability di- mensions, promoted by the private sector. This tool allows foreign firms to work with local firms that operate sustain- ably and helps match environment, social, and governance (ESG) capital to ESG investments. At the same time, the database incentivizes other domestic firms to shift to sus- tainable operations to attract and qualify for access to this database. Measure 16 – Combatting Corruption: Adherence to interna- tional agreements and standards on corruption is an ongoing process that requires countries to continuously strengthen their anti-corruption frameworks in line with evolving global norms and best practices. A strong legal and institutional framework is critical in this regard. Example of good practice: Chile’s performance on the Corruption Perception Index. Chile offers the second-best performance within LAC in regard to Transparency Inter- national’s benchmark (after Uruguay). It has taken many measures to reinforce transparency and the rule of law in the public administration in Chile, for example the Lob- by Law. Even reforms to its Constitution have recognized transparency as one of the principles of Chile’s legal system. Each of the 16 investment facilitation measures are developed across five key implementation principles that are commonly in place when the measures are successfully implemented. These include the availability and/or adequacy of: a) a Legal and Policy framework, b) Procedures, c) Institutional framework, d) Human resources (HR) and training, and e) Information and Communications Technology (ICT). The following matrix presents some examples of the implemen- tation principles for the 16 measures covered by the Handbook. 29 a) Legal & Policy Measure b) Procedures c) Institutional Framework d) HR & Training e) ICT Framework 1 Legislative and regulatory Formal procedures Common institutions that Capacity of officials ICT tools may be requirements may be are useful to identify may be involved in the involved in publication used to publish Publication helpful to institutionalize types of measures publication of laws and of laws and finalized or draft legal and advance the practice for and information to be regulations: Legislative or regulations includes instruments, such publishing draft laws and published, or specifying Executive bodies, Judiciary legal & technical as a governmental publication of regulations, procedures, the manner of publication System, Official gazettes, skills, knowledge of website or online investment and administrative per measure type (e.g., Legal publishers legal frameworks, official gazettes measures measures official journal or website) communication, quality assurance, etc. 2 A legal act or formal Formal procedures to An office or staff member Common skills include Capacity to host policy may be necessary establish processes to: col- in relevant agencies legal and technical relevant information Availability and to designate government lect, compile, and prepare (e.g., sectoral regulators) skills, knowledge of on a digital platform accessibility of agencies responsible for documents for publication; should be assigned the regulatory frameworks, (see Measure 5) publication via electronic ensuring the information responsibility to prepare and stakeholder information means and updating of is promptly available, keep updated the relevant engagement, the official information accurate and relevant; information information related to investment establishing processes for management, quality measures updating published infor- control, project mation, among others management, etc. 3 Policies establishing that Procedures to ensure Development and When new SOPs Regulatory agencies authorizations adhere to uniformity across implementation of SOPs are developed or can complement Streamlining good regulatory practices authorizations, which requires that competent services and forms are efforts to streamline investment (e.g., horizontal laws requires developing or authorities have a clear integrated, competent authorizations by authorization for all administrative redesigning Standard organizational structure authorities’ staff will leveraging digital procedures procedures, including Operating Procedures with well-defined roles and need to be trained on technologies, such timelines for processing (SOPs) and standardized responsibilities for their the new processes and as the use of single- authorizations and forms for data staff tools entry points (see grounds for rejection) management Measure 5) 4 Establishment of legal Several risk-mitigation There is no consensus about The agency responsible Use of different instruments, such as a measures can be used the optimal structure for for the process should ICT tools, such as Streamlining specialized framework and combined including: investment screening, but have staff with the informational portals investment law for national security targeted screening, it could be the Ministry necessary expertise to or FDI screening screening review, FDI screening pre-screening clearance in charge of foreign evaluate and assess websites and approval cooperation mechanisms, procedures, objective investment regulation, or the economic, strategic, mechanisms or international criteria for screening a specialized agency, or and national security investment agreements decisions, and screening committee for administering implications of foreign procedures tailored to the FDI screening process investments, as well as specific risks posed by sectorial considerations investment proposals 30 a) Legal & Policy Measure b) Procedures c) Institutional Framework d) HR & Training e) ICT Framework 5 The legal framework Operating procedures Responsibility to maintain The agency A single-informa- should mandate that to maintain reliable and the single information responsible for the tion portal should be Digitalizing competent authorities up-to-date information portal is typically assigned single information designed to simplify investment publish online about authorizations to a designated body. The portal should develop navigation, with linked facilitation relevant information and measures in a single institutional framework specialized training authorizations or on authorizations information portal, should delineate roles and programs and materials measures cross-refer- and establish digital alongside the digital responsibilities related to for recording and enced. Also, setting up transactional services processing of business processing authorizations maintaining the data a digital transactional (e.g., through a single authorizations on the portal system for investment online portal) authorizations requires e-Government shared services in place 6 The legal framework Applicants must be The strength of the Authorities that The use of should prescribe the informed about the institutional framework issue investment e-Government Independence functions and mandates application procedures, depends on transparency authorizations should and technology of competent of the entities entrusted evaluation criteria, and and accountability of the be trained regarding portals can enhance authorities with administrative the timeline involved in competent authorities, as the importance of transparency and decision making the process. Establishing well as a framework to independence and how accountability, robust conflict of interest address conflict of interest to avoid conflicts of improving at the policies that apply to the and undue political influence interest same time the quality personnel of the competent either from other parts of of service authority is important to the government or investors safeguard the integrity of authorization-related transactions 7 Laws and regulations Introducing standardized The structure and Training to the appeal Areas where the IT should ensure that templates for filing a governance of the or review bodies to systems can improve Appeal investors have multiple request for review or an administrative appeal effectively carry out the efficiency of the and review avenues to resolve their appeal and a list of the function can follow an the process pursuant appeal and review mechanisms grievances. The legal documentation needed administrative appeals to the relevant law, process include: framework determines improves transparency mechanism housed in the regulations and online filing and whether investors have and predictability of the executive branch, or it procedural manuals. submission of review the right to review or process. To ensure quality can be an administrative Other aspects in the or appeal petitions appeal administrative and consistency of appeals tribunal that training program can or applications; decisions affecting decisions and observance conducts independent include imparting notification systems investments of required time periods, reviews of administrative the duties in a fair, to provide updates on authorities should decisions made by transparent, and the progress and the establish internal working government bodies impartial manner to status of the appeal procedures for processing maintain integrity of or review process; appeals and reviews the appeal or review and electronic case process management systems 31 a) Legal & Policy Measure b) Procedures c) Institutional Framework d) HR & Training e) ICT Framework 8 A legal act may be SOPs and work Different organizational Enough staff members The required required to designate processes must be models are possible for a within the focal point infrastructure Focal points the authority or defined and formalized focal point (e.g., separate must be available and includes customer providing authorities that should for the operation of focal body or unit reporting to a trained. This includes relationship information, be responsible for setting points (e.g., standards ministry, housed within the maintaining and management assistance, up and operating the for processing inquiries, IPA, or a government-wide updating the relevant software (CRMs), and advocacy focal point and defining response times, or forms) focal point) website and online tools websites, its functions applications, chats, services and online databases, among others 9 To deal with the The typical process of a A key component is the Staff members require A tracking tool helps challenges of intra- good practice retention design of specific intra- extensive skills (e.g., governments monitor Retention governmental mechanism involves six governmental coordination legal, economic, and track investor mechanisms coordination, the lead steps: i) issue recording; protocols among agencies public administration, issues, as well as the agency should be ii) filtering; iii) legal and dealing with investors. A business operation, associated amount empowered through a economic assessment; lead agency is critical for problem solving, of investment and legal instrument, such iv) problem-solving; v) effective implementation of and stakeholder number of jobs at as a law or secondary escalating to political the retention mechanism. management skills) risk due to those regulation decision making; and The availability of a high- to perform legal and issues vi) communication level body, inter-ministerial economic analyses of and follow-up on committee, or board is also issues and negotiate implementation necessary with other agencies causing grievances 10 A legal basis is not SOPs and work processes Databases can be hosted by Sufficient staff must Supplier databases strictly necessary to must be defined, a public institution (IPA or be available and trained require a relevant Domestic enable the setup of a including standards an enterprise development to operate the supplier IT structure that supplier supplier database. A for pre-screening and agency), or by industry database. Staff allows staff to databases specific mandate can verifying company associations. For public members should have input information be helpful to ensure the profiles, format for or public-private supplier procurement knowledge and investors to existence of a budget displaying information, databases, the roles and and communication filter for different and continuity in interoperation protocols, responsibilities of staff need and technical skills categories. It also operations aftercare, matchmaking, to be clearly defined requires tracking user or firm upgrading statistics functions, among others 32 a) Legal & Policy Measure b) Procedures c) Institutional Framework d) HR & Training e) ICT Framework 11 A legal basis is not Work processes must be SDPs are complex programs Effective SDPs require IT infrastructure strictly necessary to defined and formalized, to manage and implement a range of skills across components that Supplier set up a SDP, but a including the selection since they typically involve different areas, such can be relevant for development government authority of local companies many parties. A strong lead as communication, SDPs are: Supplier programs (SDP) should be assigned with for participation in agency is needed to drive relationship building, Relationship competencies than programs, trainings for the agenda on behalf of the analytical skills, project Management (SRM) encompass supplier consultants and for government management, technical systems, Enterprise development local firms, and business knowledge, problem- Resource Planning reviews, among others solving, and cultural (ERP) systems, sensitivity Business Intelligence tools, e-Sourcing tools, etc. 12 Formal obligations Engagement of Public consultations should Ministries and Electronic to conduct public stakeholders should be conducted primarily by regulatory agencies’ systems support Public consultation can be commence early in the regulatory departments, public officials communication consultation established in the decision-making process agencies, or ministries. should be trained with citizens on investment constitution, secondary and before a decision Sometimes, public on stakeholder and businesses measures legislation (in the form to regulate is made. consultation processes are engagement techniques. to participate in of petition rights or Governments should conducted by a regulatory Training could also public consultation consultative referenda), conduct public outreach oversight body involve relevant exercises. Digital or codes of conduct. through websites, open stakeholders (e.g., civil platforms should meetings or by reaching society or business allow public officials out directly to known associations) to track time limits stakeholders for receiving and answering comments, as well as to publish the results of the consultation process 13 RIA policy should Ex ante impact RIAs should be implemented RIA training should Electronic systems be established in an assessment policies by regulatory agencies. cover: techniques for can support Regulatory authoritative document should require the Likewise, the RIA process is problem definition; implementation of Impact (e.g., Regulatory Reform, identification of a usually led by a regulatory setting policy RIA policy. Such Assessments Better Regulation specific policy need, as oversight body to ensure objectives; identifying tools help users to (RIAs) or Administrative well as the objective the quality of proposed alternative solutions; calculate regulatory Procedures Law, of the regulation (e.g., regulations and allow for impact assessment; proposals’ compliance presidential decree, prime correction of a market impartial feedback on the stakeholder costs to businesses, ministerial instruction, failure or the need RIA engagement; and community etc.) to protect citizen’s implementation of the organizations, and rights), through a RIA RIA individuals questionnaire 33 a) Legal & Policy Measure b) Procedures c) Institutional Framework d) HR & Training e) ICT Framework 14 Ideally, periodic reviews Methodologies for Periodic reviews should be Public institutions ICT is a useful tool to should be established conducting ex post part of regular planning for should have trained monitor the stock of Periodic review in a law or subordinate evaluations are usually all responsible ministries staff to periodically existing investment-re- of investment regulation. A fixed period based on a cost-benefit or regulatory agencies. If review investment- lated regulations. facilitation to carry-out mandatory framework, where an regulatory oversight related measures. Online platforms allow measures reviews (5 years after quantification is to body already exists, this Manuals and guidelines agencies to announce the regulation was be encouraged when institution would be are needed to onboard in advance which regu- enacted) can also be feasible. Periodic reviews responsible for coordinating new personnel in charge lations will be reviewed established should be publicly the reviews of conducting these and present the results announced reviews of evaluations 15 The legal framework on Countries can promote Common institutions that Staff with knowledge ICT tools may be used RBC can encompass and enable RBC may be involved in either of the international to publish laws, regula- Promoting international agreements, practices by regulating, developing, monitoring instruments the tions, and measures in responsible instruments laying out facilitating, compliance, and enforcing country has adhered place related to RBC, principles, standards, RBC include legislative and to or endorsed related as well as internation- business or guidelines that cooperating, and executive authorities, IPAs, to RBC, as well as al instruments the conduct (RBC) incentivize and facilitate promoting RBC principles and others implementation country has adhered to the voluntary uptake and policies capacity of any legal or endorsed related to by businesses of RBC, framework in the RBC so that busi- among others areas covered by the nesses can anticipate international principles, expected behavior in a standards, and country guidelines on RBC 16 Adherence to The process of adopting Establishing robust Some common E-government initia- international agreements measures to address institutions with strong capacity-building needs tives and the use of Combatting and standards on corruption and money governance structures may include training ICT tools can enhance corruption corruption is an ongoing laundering should be helps prevent, detect, and to conduct public transparency and ac- process, and countries carried out in a non- combat corruption. Some awareness campaigns countability and reduce must continually work to discriminatory manner. institutional structures and educational opportunities for cor- strengthen their anti- Procedures involved can be independent anti- programs to promote ruption. Some exam- corruption frameworks in in the adoption and corruption agencies, ethics, integrity, and ples are: online digital line with evolving global implementation of such law enforcement (anti- anti-corruption values, platforms for service norms and best practices measures should be free corruption department), as well as training to delivery; electronic tax from any conflict of auditing agencies, financial enforce anti-corruption returns and payment interest regulators, or judicial bodies laws and regulations systems; e-procure- ment systems; open data and financial transparency portals; digital whistleblower platforms; and an- ti-corruption hotlines 34 WBG support for implementing investment climate reforms The WBG has extensive experience supporting countries with the implementation of investment facilitation and broader investment climate reforms (Figure 2). The WBG can offer technical assistance and capacity-building for the implementation of the investment facilitation mea- sures covered in this Handbook. This includes information about the different investment facilitation measures and best practice approaches to deploy them, how to organize multi-stakeholder diagnostics and reform processes, how to develop reform action plans and implementation plans, and how to institutionalize reforms. The WBG also pro- vides support for developing countries and LDCs during the process of notifying the WTO on their commitments, including conducting needs assessment exercises. Sup- port can also be provided beyond the measures in the IFD Agreement, spanning the investment lifecycle. Implementing the IFD Agreement and advancing a broader private investment enabling agenda will require increased collaboration and coordination among international orga- nizations. The WBG is seeking to build and nurture part- nerships to enhance international standard-setting to support private investment. These include the Investment Facilitation Agreement process at the WTO, the Donor Committee for Enterprise Development (DCED), and the World Investment for Development Alliance (WIDA). The latter two are collaborative mechanisms bringing together the World Bank OECD, UNCTAD, ITC and various bilateral actors. Collaborations also take place bilaterally with oth- er IOs including the OECD through its FDI Qualities Initia- tive, UNCTAD with its annual World Investment Report and related initiatives, the World Association of Invest- ment Promotion Agencies (WAIPA) through sharing good practices, and the joint IPA Advocacy Services competi- tion, among others. 35 Figure 2. Investment Climate Reform Measures Across the Investment Lifecycle Internationalization, linkages and spillovers Investment Vision and Supplier databases Strategy Supplier development programs Inter- Comprehensive linkages programs nationalizacion, Attraction & Transparency and affectiveness Linkages and Encouragement of outward FDI (OFDI) facilitation Spillovers measures Investment Vision & Strategy Policies strengtening firm- and INVESTMENT Private sector development and economy-level absorptive capacity LIFECYCLE (stimulating productivity and FDI attraction strategy growth ofdomestic firms, SME promotion, developing human capital, investing in R&D, etc.) Retention & Entry Attraction & Encouragement Expansion IPA establishment and service Retention and Expansion provision Aftercare programs Operations Targeted investment promotion Investor grievance mechanisms (IGMs) Comprehensive incentives inventories Sound contractual environment Improved incentives administration Operations Entry Transparency of investment measures Predictable and efficient business entry and establishment Focal points procedure (company and tax registration; FDI approval/registration) Private sector consultation and follow-up Access to land and clear property rights Promotion of responsible business conduct satndards Transparent FDI entry regimenes (e.g., on restrictions to FDI) Investor obligations to boost responsible business conduct Single information portals and integrated servoce delivery Investment protection guarantees Effective use of ICT in entry and establishment procedures Access to investor-State dispute settlement (ISDS) No/low legar and policy barriers to entry and establishment Improved marked access Source: Authors elaboration. Investment Climate Unit, WBG. Note: Measures highlighted in blue are investment climate measures going beyond investment facilitation. 36