An agreement made between two countries containing reciprocal undertakings for the promotion and protection of private investments made by nationals of the signatories in each other's territories. These agreements establish the terms and conditions under which nationals of one country invest in the other, including their rights and protections.

BITs provide protection against illegal nationalisation and expropriation of foreign assets and other actions by a signatory of the BIT that may undermine the ownership or economic interest of a national of the other signatory. As BITs are negotiated agreements between the signatory parties, their terms vary. However, they generally include the following rights and protections:

One of the main protections under a BIT is that it allows foreign investors to sue states directly by submitting claims for breach of the BIT to arbitration rather than to local courts.