After the "Velvet Revolution" in November 1989, Czechoslovakia
began transforming its state planned economy into a market
economy. Czechoslovakia and after the separation of its two
consituent units, independent Czech republic realized it needed
a huge amount of capital in order to boost its nascent market
oriented economy. One way of obtaining the needed financial
resources was to attract investments from abroad. Foreign
investors would, however, not have been willing to invest in
our territory unless they felt	their capital was dully
protected against potential losses brought about by state's
expropriatory or other	actions with similar effect that could
harm their property. In order to create a favourable climate
for the flow of foreign investments, the Czech republic began
adjusting its legal system to correspond to requirements of
potential international investors. Our country has not only
worked on its internal laws but at the same time kept
concluding bilateral international treaties on encouragement
and reciprocal protection of investments with other states and
also accessing to multilateral investment treaties. By
admitting these international obligations, the Czech republic
has to be aware of the big responsibility it bears which is
hidden inside of these obligations. The state therefore needs
to secure that they will not be breached by its  unreasonable
conduct. 
The purpose of this thesis is to provide an insight into the
current international investment law from the perspective of
the Czech republic with special emphasis on its treatment of
foreign investors and their investments.  The paper is divided
into four main parts. The first one describes the history of
international investing and the creation of the means of
foreign investment protection. The purpose of this Chapter is
to facilitate the understanding of this brand of international
law in the present context, for as we can see today the history
has the tendency to repeat itself. The development through
which the former colonies had to go after the period of
decolonization, was in many aspects similar to the development
of former socialist states after the fall of communism in
Central and Eastern Europe. 
The second part of this thesis deals in a comprehensive way
with the definition of the essential term investment which
obviously lies in the heart of international investment
protection. Good understanding of this term is absolutely
necessary to distinguish between protected investment and other
financial transactions which are not to enjoy this kind of
protection. For defining this term, we use both, the well
grounded economic definition and definitions provided by legal
instruments. 
Following Chapter 3 lists and describes the sources of
international law important for the area of foreign
investments. 
The final part then  addresses the standards of treatment of
foreign investments as contained in bilateral investment
treaties binding for the Czech republic and also deals with
their application in practice. The Chapter describes all
treatment stardards which usually appear in bilateral
investment treaties, namely: "national standard of treatment",
"international minimum standard of treatment", "fair and
equitable
standard of treatment", "most-favoured-nation treatment" and
standard of "full protection and security". The purpose of this
Chapter is not only to mention the provisions of investment
treaties concerning such standards but also to give specific
content to the vague phrases they contain.  To facilitate the
understanding of this content, we use the interpretation
provided by arbitral tribunals while deciding the disputes
arisig from the breach of a particular standard. These
standards form the center of today's international investment
protection for it is their breach which gives rise to most
investment disputes. Every state shall therefore always pay
enough attention to its conduct and the conduct of its
authorities to avoid these obligations being violated because
every breach of such obligations harms not only the interest of
the foreign investor but at the same time harms the interest of
the host-state itself for this state may be seen by foreign
investors as less eligible for investing in the future.