foreign investor with their great financial and technological strength have very important effects on improvement of industries in investee countries. Today's competitionbetween investee in attracting foreign investment caused proposal of many incentives to foreign investor by them .one of these incentive is tax incentives. Canada started oil extraction from their oil sands about 40 years ago. Oil production from oil sands is very hard and expensive process which need a very high technology. so In the early years of production(70 decade) this country needs aid of foreign investor to start and improve their project.. For stimulating investor to invest in high-risk oil sands projects, Canada offer them several tax incentives.In this article we investigated Canada experiences in developing oil sand project during 70 till 90 decades and tried to identify effectiveness of this tax incentive plan in attracting foreign investment.
This thesis concludes that tax incentives have been largely insignificant in attracting foreign investors to the development of the Canadian oil sands. Tax incentives occurred as compensation to offset the extra cost involved in commencing oil sands projects. So it is just effective in continuation of oil sand contract not in decide about commencing the investment. For investing in a foreign countries factors such as legal certainty, political risk seems to be more important.