It is indicated that international private-law relations nowadays are expanding significantly primarily in connection with the internationalization of economic life. The modern world is characterized by the economic interdependence of states, the expansion of not only traditional forms of foreign economic relations, but also relatively new forms such as leasing operations, concessions, franchising, and others. The article examines the current trends in the development of state immunity in international private law relations, in particular, in investment relations. The author defines the scope of these relations and gives their general characteristics, as well as identifies the peculiarities of the State’s participation in these relations as a subject of private international law. The author examines the content, types of international investment relations, development trends and peculiarities of legal regulation. The author pays special attention to the jurisdictional issues of investment dispute resolution involving states. The author analyzes legal acts and shows the role of judicial practice in this area. The author substantiates the need to apply functional (limited) immunity in international private law relations. Expansion of the range of international private legal relations over time due to the development of foreign economic activity, integration processes, and interdependence of States in the second half of the twentieth century contributed to the expansion of State participation in civil (private) relations, which objectively led to the establishment of the concept of functional (limited) immunity in the legislative, judicial and contractual practice of different countries. The concept of limited immunity is becoming increasingly popular in the world, which is explained by the development of economic relations between different countries and the increasing involvement of states in commercial activities, which on their own behalf enter into various foreign trade agreements, obtain loans from foreign banks, use maritime transport for commercial purposes, i.e. by their actions they seem to put themselves in the position of a merchant, trader, private person, which then allows the courts to consider them as ordinary participants in the process. The current policy vector of most continental law states on immunity issues is shifting towards the use of limited immunity of states.