- Article
- February 28, 2017
Introduction
Before understanding the importance of the consumer privacy in today’s scenario, one must know the meaning of this both two terms. There has been rapid changes & development in the technology and their implications. Consumer privacy refers to the protection of the personal data and protection of any kind of communication between people through a post, telegraph, verbal or any other means of the communication. However, this is mentioned in the laws of every country that the privacy of the communication is the fundamental rights of the consumer. Let us understand the laws on the consumer privacy in UAE.
Right to Privacy
Analyst of the UAE on Consumer Secrecy mentioned that the right to privacy preserves in the Constitution of United Arab Emirates and this leads to analyzing data protection issues. However, Article 31 says: “Freedom of communication by post, telegraph or other means of communication and the secrecy thereof shall be guaranteed in accordance with law.’ As per article 31 the protection of data in the digital era is not mentioned in the constitution of the UAE, privacy is mentioned only in relation to post and communicate.
Certainly, around Gulf Region they mentioned that the constitution of the UAE law includes fundamental rights to privacy is ornamentation as it just mentioned about the post and communication, privacy is an important concern in relation to doing business in the Middle East.
Telecom Sector – Middle East
In Telecom context the issues are more than hacking and cybercrime the regulations in every region generally focus on the protection of telecom licensees then personal data. Let us understand how different region includes the laws and regulation of the Telecom sector and its privacy on the data.
UAE: Article 12 of the UAE Telecommunications Regulatory Authority’s Consumer Protection Regulations includes provisions on the subscriber’s details. The Licensee is obliged to take cautious steps to prevent secrecy of the subscriber’s information and their disclosures. They should take all the steps against risks, destruction, leakage, inappropriate use, modification, or unauthorized use. They must limit the information shall not be used in unauthorized way which includes violation of the regulations of the law. However, they must note that the information can be available to the third party or any affiliates who are involved in the provision of the telecommunications services ordered by the subscribers. Whereas it is necessary to provide the details to the third party it is necessary to take all the reasonable steps to protect the information and it should be used only for the purpose for which it is shared and for the marketing.
QATAR: Article 52 of the Qatar Telecommunications Law mentions (and articles 91 and 92 of the associated by law) mention that consumers have right to have their information corrected or removed from the data if it is not as mentioned by the consumer or shared with the service provider. Service providers obliged to use the information shared by the consumer in authorized manner they must use the information or published the information other than mentioned by the consumer.
OMAN: Regulation no. 113 of 2009 issuing Regulations on Protection of the Confidentiality and Privacy of Beneficiary Data mentioned that the Service provider must notify to consumer when the data is used for any unauthorized purpose and which might can affect their reputation as well as they cannot send the information abroad for the subscribed telecommunication services without approval of the Oman Telecommunications Regulatory Authority.
BAHRAIN: The privacy and confidentiality section of the Bahrain TRA’s consumer protection guidelines mentioned general restriction on the service provider by calling information and general notes to protect the personal information of the consumers. Consumers are protected from the illegal use of the information any unauthorized and unsolicited use of the information. Service providers are obliged to use the information provided by the consumers to provide telecommunication services.
SAUDI ARABIA: Article 3(8) of KSA Telecoms Law mention that Service providers are obliged to maintain the public the interest and protect interest of the public and maintain confidentiality of the communication and information.
KUWAIT: Kuwait is still in the process of establishing the Telecom Law.
Conclusion
As Per various studies and GCC e – commerce market Consumer Privacy should be mentioned as a fundamental right in the Telecom law because consumer trust issues can be highly avoided if the data on the consumers and their information can be protected.
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- Newsletter
- February 28, 2017
- India remains one of the fastest growing emerging market economies
- Due to recent cash shortages, growth is projected to slow temporarily this fiscal year
- Maintaining the reform momentum is key to stronger growth
India’s overall outlook remains positive, although growth will slow temporarily as a result of disruptions to consumption and business activity from the recent withdrawal of high-denomination banknotes from circulation.
But the nation’s expansion will pick up again as economic reforms kick in, said the IMF in its latest assessment. Growth is expected at 6.6 percent in this fiscal year and at 7.2 percent in the following year.
Speaking to IMF News, IMF mission chief for India Paul Cashin discusses these and other challenges, and also highlights the opportunities for this vibrant economy moving forward.
The Indian economy is growing strongly and remains a bright spot in the global landscape. The halving of global oil prices that began in late 2014 boosted economic activity in India, further improved the external current account and fiscal positions, and helped lower inflation. In addition, continued fiscal consolidation, by reducing government deficits and debt accumulation, and an anti-inflationary monetary policy stance have helped cement macroeconomic stability.
The government has made significant progress on important economic reforms, which will support strong and sustainable growth going forward. In particular, the upcoming implementation of the goods and services tax, which has been in the making for over a decade, will help raise India’s medium-term growth to above 8 percent, as it will enhance the efficiency of production and movement of goods and services across Indian states.
Challenges remain, however, and there is little scope for complacency. A key concern for us is the health of the banking system, which is still dealing with a large amount of bad loans, and also heightened corporate vulnerabilities in several key sectors of the economy.
And, over the past few months, the economy has been hit by cash shortages, and accordingly we reduced our growth forecasts to 6.6 percent for fiscal year 2016/17 and to 7.2 percent in 2017/18.
The initiative affected notes with a total value of about 15 trillion rupees, which amounted to 86 percent of all cash in circulation. Because payment transactions in India are primarily cash-based and electronic payments infrastructure is limited, the shortage of cash has disrupted economic activity, with smaller businesses and rural regions being particularly badly affected.
Fortunately, these effects are expected to gradually dissipate by March 2017 as cash shortages ease. It also appears that measures taken to alleviate payment disruptions, such as temporarily allowing use of old banknotes for purchases of fuel and agricultural inputs, have helped mitigate the negative impact. So we expect the slowdown to be limited and relatively short-lived and the financial system to come through unscathed. Of course, potential loan repayment risks should be monitored carefully, particularly given an already elevated level of non-performing loans.
The demonetization initiative presents an opportunity to increase the size of the formal economy and broaden financial intermediation in the longer term. It can also support a widening of the tax base, help reduce the fiscal deficit, enhance bank liquidity, and give a fillip to the government’s efforts to promote greater financial inclusion.
Sound economic policymaking underpinned by strong institutions is critical for sustainable growth. A recent example of a positive change in India is the implementation of flexible inflation targeting and creation of the Monetary Policy Committee, which have strengthened the credibility of monetary policy and helped maintain price stability in an increasingly complex economy.
In addition to providing policy advice, the Fund is committed to working with the Indian authorities to help build capacity for policymaking. The recently inaugurated South Asia Regional Training and Technical Assistance Center(SARTTAC) headquartered in New Delhi—which will serve Bangladesh, Bhutan, India, Maldives, Nepal, and Sri Lanka—is the first IMF-supported center to combine both technical assistance and training.
The center will provide training to government and public sector employees, enhance their skills and improve the quality of their policy inputs, and will also provide technical assistance to governments and public institutions. SARTTAC is expected to become the focal point for planning, coordinating, and implementing the IMF’s capacity development activities in the region on a wide range of areas, including macroeconomic and fiscal management, monetary operations, financial sector regulation and supervision, and macroeconomic statistics.
Source: IMF
- Newsletter
- February 28, 2017
In a press release dated December 16, 2016, the Indian government announced that it rescinded Cyprus’ classification as a notified jurisdictional area (NJA) on December 14, 2016. The rescission is effective retroactively from November 1, 2013 – the date that Cyprus was previously classified as an NJA by the Indian authorities.
The new double tax treaty (DTT) and accompanying protocol between Cyprus and India, signed in November 2016, also entered into force on December 14, 2016. The new DTT is effective January 1, 2017 in Cyprus and April 1, 2017 in India.
The new DTT provides for a 10% withholding tax (WHT) rate on dividends. The Protocol clarifies that, in India, this rate does not apply currently under Indian domestic law, which does not impose WHT on dividends paid by Indian companies to its shareholders.
A 10% WHT rate also applies on interest, royalties, and fees for technical services, except for interest where the beneficial owner is the government, a political sub-division, or a local authority of the other State or any other institution agreed upon between the two States.
For capital gains, the new DTT provides for sourcebased taxation on the disposition of shares in the following cases:
- Shares of a resident of the source State.
- Shares of a company whose property consists principally, directly or indirectly, of immovable property situated in the source State.
Importantly, the protocol provides a ‘grandfathering’ clause for investments in shares acquired prior to April 1, 2017 where it has been agreed that the taxation of a future disposal of such shares remains exclusively with the State of residence of the seller in all cases.
- Newsletter, VAT
- February 28, 2017
In brief
United Arab of Emirates (UAE) Ministry of Finance officials have declared during the World Government Summit the intention of all GCC Member States to implement VAT by January 1st, 2018.
In detail
Younis al-Khouri, the UAE Ministry of Finance Undersecretary, has reiterated the GCC Member States’ intention to simultaneously apply VAT across the GCC by 1 January, 2018 during the World Government Summit held in Dubai, UAE this week.
The VAT will still be applied at a rate of 5% on most goods and services, with certain sectors potentially benefiting from special VAT treatment. These sectors may include healthcare, education, transport and technology.
The Excise Tax is planned to be introduced during the current year in UAE, with specific goods considered harmful to the human health to be subject to the Excise Tax, including soft drinks, energy drinks and tobacco products.
- Newsletter
- February 28, 2017
In brief
On 1 February 2017, the Kingdom of Bahrain signed the GCC unified VAT and Excise Treaties. The Minister of Finance stated that Bahrain is planning to introduce VAT by mid-2018 and is targeting to introduce Excise Tax by mid-2017. The normal constitutional processes will need to be completed prior to the introduction of the taxes.
In detail
The GCC Unified Treaties for VAT and Excise Tax (the Treaties) are the framework through which GCC Member States will implement their own VAT and Excise Tax national legislation and executive regulations.
Signing the Unified Treaties is one of the final steps required before the application of the taxes in Bahrain. The signature of the Unified Treaties suggests that VAT will be introduced in Bahrain by mid-2018, imposed at an expected rate of 5% for most goods and services, with certain exceptions.
The Excise Tax is planned to be introduced by mid-2017 in Bahrain, with tobacco products subject to excise tax at 100%, soft drinks at 50% and energy drinks at 100%. Other goods may become subject to the tax.
- Newsletter
- February 28, 2017
On 1 February 2017, the Organisation for Economic Cooperation and Development (OECD) published documents detailing the processes for review of countries’ implementation of two of the OECD/G20 Base Erosion and Profit Shifting Project (BEPS) minimum standards. These relate to the compulsory spontaneous exchange of information amongst tax authorities of:
- tax rulings (the ‘transparency framework’), in accordance with Action 5, and
- country-by-country reports (CbC reports), in accordance with Action 13.
These annual reviews encourage comments on a country’s implementation of the respective standards from its peers in the BEPS Inclusive Framework, currently comprising around 100 countries. The peer review and monitoring process for the transparency framework will be conducted by the Forum on Harmful Tax Practices (FHTP); the process for CbC reports will be conducted by an ad hoc ‘CbC Reporting Group’, comprising delegates of both OECD Working Party 6 and Working Party 10 under the aegis of the Inclusive Framework.
‘Terms of reference’ include each of the elements that a jurisdiction needs to demonstrate it has fulfilled in order to show proper implementation of each standard. The ‘methodology’ contemplates collecting the data points relevant to the peer review by using standardised questionnaires sent to the reviewed jurisdiction as well as to the peers.
The OECD does not specifically seek business and civil society groups’ participation in the formal evaluation processes. However, the publication of the upcoming review schedules would enable interested parties to provide information either to tax administrations or to the OECD Secretariat. The documents note that the final annual reports summarising the findings and recommendations will ultimately reflect only the views of each jurisdiction reviewed and its peers.
- Newsletter
- February 28, 2017
The Kingdom of Bahrain is in the process of making comprehensive changes to its corporate laws and procedures to make it easier to set up and carry out business in Bahrain. The changes will allow for easier company incorporation, the streamlining of the company administration process and the easing of restrictions on foreign ownership.
A series of new laws and amendments have been introduced over the last 24 months to modernize and streamline the regulatory regime, enhance corporate governance and increase accountability, empower shareholders and facilitate foreign participation in Bahrain companies. They are designed to promote enterprise in Bahrain and encourage foreign investors to choose Bahrain as a destination of choice for doing business in the Middle East.
The Bahrain cabinet has further announced that it is to allow 100% foreign ownership in residency, real estate, administrative services, health and social work, information and communications, manufacturing, mining and quarrying, food, arts, entertainment and leisure, water supplying and professional, scientific and technical activities.
Business opportunities in Bahrain are set to increase heavily in the period leading up to the new the Ministry of Industry and Commerce (MOIC) regulations, which for the first time puts Bahrain on a competitive footing with some of the region’s mega free zones and business hubs. The nature and size of the proposed business, as well as the particular requirements of investors, will govern the choice of legal structure in Bahrain. All types of Bahraini companies give the shareholders or the directors an Investor’s Residence Visa.
Bahrain imposes no exchange control restrictions on repatriation of capital, profits and dividends, enabling full financial transferability of capital, profits and dividends. Bahrain currently levies no taxes on personal or corporate income. There is no capital gains tax, no withholding tax and VAT.
Forming a company in Bahrain offers excellent access to the GCC states, especially Saudi Arabia, which is the largest market in the region. Bahrain has an expanding treaty network that includes over 30 double tax agreements with key partners in Asia, Europe and the Americas, as well as the Middle East and Africa. This is supplemented by bilateral investment treaties with countries including India, Italy and the US, and Free Trade Agreements with trading partners such as the US and Singapore.
Potential investors should speak to a consultant to ensure that the company they are establishing complies with the various new MOIC rules and regulations. Sovereign is in a unique position, through its global network of offices, to give guidance on suitable structures available to meet any personal and business requirements.
The Bahrain property market is already highly competitive when compared to other regional locations due to its attractive residential and commercial rents and values, but the huge monetary investment into the city and its infrastructure combined with the new opportunities for foreign investment will certainly help to support sustained activity in the long term.
Given the boost to real estate values and rents in Bahrain, property owners should be ensuring that their ownership structures and succession plans are fit for purpose. Many property owners are not fully conversant with local legal procedures or taxes and may not fully recognize the longer-term implications in terms of potential exposures to capital gains tax, inheritance tax or forced heirship rules. Substantial benefits may be derived through the use of corporate, trust or foundation structures to address these issues.
Sovereign assists many of its clients with the acquisition of real estate worldwide. We advise on tax and structuring and can manage the transaction process and financing arrangements. With our regional knowledge of property ownership laws and regulations, along with our tax planning expertise, we can help you reduce any potential exposure.
- Article
- February 27, 2017
Introduction
The Jordanian economy is majorly based on the investments from various Gulf countries as the country do not possess rich natural resources unlike neighboring countries. But, these investments have seen a sharp downfall due to the global slowdown and fall in oil prices. Jordan has introduced various investment laws during this period to gain the confidence of international investors and attract more investment in the country. The introduction of new regulations for Organizing Non-Jordanian investment during the last year is another important attempt to attain the objective of maximized foreign investment in Jordan. This article aims to highlight major provision of these regulations.
Major Provisions
The new regulations (Regulation no 77 of 2016) have been published in the official gazette on 16 June, 2016 replacing the old regulations (Regulation no. 47 of 2000). The prime objective for issuing these regulations is to design a specific framework for regulating and governing the economic activities foreign nationals shall be allowed to take in the country either wholly be foreigners or in partnership with nationals and to restrict participation of foreign investors in certain regulated activities.
As per the provisions of Article 3 of the new regulations a foreign investor may undertake any activity either wholly owned by himself or in partnership with Jordanian if it does not contravene with the public orders or morals, national security and public health.
Article 4 and 5 of the new regulation provides list of economic activities that can be undertaken only by Jordanians or foreign investor participation of less than 50 percent. Activities like maritime maintenance and maritime health services are included in this list.
Article 6 of the new regulations sets out the list of activities in which no foreign investment will be allowed. Activities like sale and trading of weapons, fireworks, crafting and handicraft activities form part of this list.
Article 9 of these regulations empowers the council of ministers to increase the limit for an ownership stake of foreign investor if these companies are not involved in the business mentioned therein.
The new regulations also remove the requirement of minimum share capital contribution for foreign investors. However, non-Jordanian investors will not be allowed to take advantage of this amendment.
Conclusion
The new regulations enhance business opportunities for Jordanians by removing the limits for minimum subscribed share capital and allow foreign participation in several activities to promote sustainable development for the nation. At the same time the new regulations do not compromise on the issues related to security and safety of the nation by restricting foreign participation in these activities. This is a welcome step and it shall help the Jordan to achieve the desired objectives.
- Article
- February 23, 2017
Introduction
The Trademark is the term is being used more frequently in today’s scenario. First, let us understand what is a trademark, the basic definition of trademark says “A Trademark is a sign capable of distinguishing the goods or services of one enterprise from those of other enterprises. Intellectual property rights are protected trademarks. A Trademark is a sign or word or it can be anything which is used for goods & services or article of the enterprise which distinguishes it from anyone else or from competitors. Trademarks used for the services are also called service marks. Trademark owner refers to the person who has introduced the product or services it can be individual, business organization or any legal entity. A Trademark may be located on product as a sign or on the logo of the company.
Importance of Trademark
As we understood that trademark gives a life to a product or services as it makes them stronger to stand out in the market from any other products or services. Therefore, one should be very cautious while selecting the trademark as it must be different and unique which does not already exist in the market. Selection of the trademark should be done after considering all aspects, details and information about the product as it gives it the identity in the market. If it is common or does not stand out then it will be difficult to capture interest, enjoy exclusive rights and create goodwill in the competitive market. Another aspect to be kept in mind while selecting the trademark that it should be well-defined, meaning it should be clearly related to the product or services.
Registration of Trademark
- Once the selection of trademark is done owner(company or individual) should start the process of registration to obtain the ownership of the same.
- The application of the registration shall be submitted with the concerned authority. The authority examines the correctness of the trademark whether it is unique and does not resemble with the existing trademarks.
- Valid registration should be obtained and it should be renewed on a timely basis to enjoy the rights and goodwill.
- Enforcement of the Trademark should be checked on a timely basis to avoid any violation of the rights and unauthorized use of the trademark to ensure the trust in the quality of the product and services.
- To achieve the desired results of the trademark and to enjoy rights owner must deploy resources to monitor the market regarding advertising and marketing activities of the goods and services, to avoid the violation of the same by the third parties.
Conclusion
As per various studies done by the economists, the global market is very competitive today and to survive in such market one should follow the above-mentioned practices to protect trademarks.
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- Article
- February 22, 2017
Insurance brokerage profession can be carried on only after obtaining License to practice insurance activities in the UAE as a Company or a Branch or an Insurance Agent of Foreign Company. All Insurance Broker in the UAE is subject to resolution 15 of 2013 including amendment thereto from time to time. Under Federal Law No. 6 of in 2007 the Insurance Authority (IA) was set up as a separate legal personality for regulating and supervising the insurance sector in the United Arab Emirates (UAE).
The License is issued by the Insurance Authority (IA) is valid for One (1) year from the date of issuance and expiring at the end of December of the same year along with prescribed payment for renewal. Also, IA has a discretionary power to suspend the Insurance Broker license for carrying the activity in case completed application for license renewal not submitted.
Criteria for Insurance Brokerage Licensing
The companies must satisfy the following criteria to be eligible for issuance of license by the IA:
- Must be a company incorporated in the UAE and registered under the Commercial Companies Law having paid up capital of AED 3 million Dirhams or more and with the object of practicing the insurance Brokerage activity.
- A foreign Company having its branch or a branch of a financial Free Zone registered under the commercial law of UAE and having paid up capital of AED 10 million Dirhams or more.
- A Letter of Guarantee produced by a bank and A professional indemnity insurance policy in favor of the IA.
- The appointment of the technical and administrative staff required for practicing the activity.
- Provision of a suitable headquarters, software and technical systems required to practice the activity.
- Must have an internal control system to ensure proper application of law, regulations, instructions, resolutions and circulars issued thereunder from time to time by the IA.
- Submission of the agreement concluded between the license applicant and a bank operating in the UAE concerning the account designated to the practice of Insurance Brokerage.
- Full payment of the prescribed fees must be made and comply with any additional conditions or requirements determined by the IA.
Application for approval to practice the Insurance Brokerage business needs to be submitted to the IA in the prescribed Form along with required documents and supporting thereto. After submission of the application the IA issues the decision of approving or rejecting the application for license within a maximum period of 20 working days.On approval of the application the Insurance Broker is registered in the IA’s Insurance Brokers Register.
Technical and Administrative Staff
Further, Insurance Broker is continuously required to have the technical staff to practice the licensed activity and must at least appoint at least one specialized employee to assume the jobs of General Manager, operation Manager, Internal Auditor for each license type having the required qualification, experience.
The individual appointed as technical and administrative staff for the insurance brokerage company must fulfill the following conditions:
- a natural person enjoying full capacity.
- Needs to be of good conduct and behavior and has never been sentenced for a freedom restricting punishment in a moral turpitude crime without being rehabilitated.
- Anytime judged bankrupt without being rehabilitated, or has not stopped the payment of his commercial debts.
Also, the Insurance Broker is required to notify the IA of appointment, Alteration, transfer or modification or termination, if any within a period of sixty days.
Obligations of the Insurance Broker
- Within (3) months from the date of obtaining the license to make written internal bylaws, and provide a copy thereof to IA.
- Continuous review and updating of the internal control system to ensure proper application of the Law, regulations, instructions, resolutions and circulars issued by the IA.
- Creating an Operational Guide for risk management and to update and review periodically the same and as per the applicable rules in this regard.
- Developing of a professional code of conduct for employees; and supervising and organizing their undertakings to ensure compliance with the Law.
- In terms of place or organizational, technical or administrative aspects the Insurance Broker and their branches must be independent from any other party.
- Co-operation and coordination with the internal controller, for enabling them to perform the assigned tasks and notifying the IA of any violation.
- To dismiss the internal controller except by a decision of the board of directors or management board of the Insurance Broker.
Also, apart from, above regulations set certain obligations which the insurance broker must comply towards the IA, Customers and insurance companies.
Even though the UAE law has provided for the role and responsibilities of the Insurance Broker, recently Dubai Court has held the Insurance Broker to be liable for payment of recoveries to an insurance company from a reinsurance company.
Conclusion
Generally, Insurance Broker are not liable for the default of the insurance companies or the customers. Thus, IA by regulating the license issued makes business safer for clients in the UAE, ultimately protects the national economy; supports the economic development; encourages fair and effective competition; and provides the best insurance services with appropriate coverage at affordable rates in the insurance market of UAE.
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