The core of the agreement lies in the commitment of each contracting party to protect and promote in its territory investments of investors of the other contracting party and in particular to provide these investments National Treatment and Most Favoured Nation Treatment.

An "investment" is defined broadly under the agreement and means every kind of asset invested in accordance with the national laws of the destination country of the investment.

In addition, both countries are committed to permit investors of the other country free transfer of payments in connection with an investment.

The agreement also provides elaborate dispute settlement mechanisms in case of disputes between an investor and the host contracting party as well as between the two contracting parties.

Bilateral investment agreements such as these aim to strengthen the basic conditions for international investments by improving legal security and providing protection against arbitrariness.

They are also considered important because despite the importance of direct investments in the modern economy, there is no global standard for international investments comparable, for example, to the regulations provided by the WTO for international trade in goods and services.