- Article
- October 4, 2016
Introduction
Gulf region is largely recognized for its large amount natural resources especially of oil and gas. With the remarkable growth in the economy, it has attracted the eyes of investors from all over the world. With an ambitious objective to promote co-operation of member nations and become knowledge based economies Gulf Cooperation Council (GCC) was formed in 1981 by six countries namely, United Arab Emirates (UAE), Kingdom of Saudi Arabia (KSA), Kuwait, Bahrain, Qatar and Oman.
Workforce and population in GCC countries are dominated by foreigners, a fact that escalates the need to preserve the originality and innovation to provide sense of security to external trade in the region. Protection of IPR is gaining due attention of brands operating in the area. Government and judicial authorities are taking effective steps for protection of IPR and at the same time a large number of private groups are also creative awareness and nourishing a better and positive future for intellectual property rights.
The Regulators
Most of the countries in GCC have their separate laws for protection and regulation of IP rights and at the same time also governed by unified laws issued by GCC for regulation and protection of IPR. In other words, GCC have issued IPR laws ensuring they are in congruence with the domestic policies and needs of all the countries in the council and are binding for the business operating in the region.
Legal Overview
GCC Patent Law: Introduced in 1989, this law provides for protection of patents in all six member nations for an application approved by GCC Patent office (GCCPO). The application approved GCCPO do not require any further country validation in member nations and generally, member nations who accept patent applications merely assign a filing date and filing number and do not take any further actions.
GCC Trademark Law: With an objective to nullify separate trademark laws in member countries and to create a uniform regulations, GCC Trademark laws was accorded consent in 2006. However, it is important to note here that law does not merge the trade mark offices in member nations and each nation continues to have their separate trade mark registration office. The law provides for protection of medium and small trademarks and imposes stringent punitive provisions for violators.
IPR Protection Measures in UAE
IP Laws are still evolving in the entire GCC region and all the states are developing laws and policies in congruence with GCC Laws. Department of Economic Development (DED) is the primary agency to regulate businesses operating in Dubai and very recently it has launched a quarterly index for protecting intellectual property rights. The index is launched with an aim to promote innovation and protect economic rights of the innovators and patent owners. Index also aims to promote sustainable development by measuring intellectual property protection in five criteria.
DED has also joined hands and signed a Memorandum of Understanding (MoU) with Korean Intellectual Property Office (KPIO) to develop mechanism for protection of intellectual property rights in the region and to examine various applications received in UAE for patent registration.
Conclusion
As more and more countries are diverting their investment and business in the region, IPR protection is becoming a crucial factor of consideration. Though the awareness is increasing and regulators are taking effective steps for protection of interest of stakeholders, laws relating to protection of IPR still have a long way to go in GCC. Though the regulators are committed to provide security and ensure protection of IPR, the region still requires proactive and comprehensive procedures to retain and maintain the confidence of international innovators.
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- Article
- October 4, 2016
The Sultanate of Oman’s evolving competition and anti-trust law has not yet been enacted or applied by way of enforcement action. But, the potential investors, who are planning to expand their business in the Sultanate, should tighten their belts and take every step to understand the soon to be effective law to ensure compliance.
Major Definitions
In Oman the Consumer Protection Authority along with its other significant powers and responsibilities regulates the freshly formulated anti-trust and competition law.Law defines Dominance as the ability of a person or group of persons, whether natural or judicial who jointly or severally attempt to ‘directly or indirectly’ concaving control over a particular market, and thereby acquiring a share exceeding thirty-five percent of the total volume of this particular market.
‘Economic Concentration’ includes any act which results in partial or full transfer of the interests, monies, assets (physical or intangible), shares, benefits or liabilities from one person to another and includes mergers or any other arrangement which results in a person or groups of persons being in a dominant position in direct or indirect way.
As per the provisions of Article 11 of the Law,a written request should be submitted to the authority by the persons who desire to execute any transaction which would result in an economic concentration providing details of such transaction.
The Authority is empowered to scrutinize the application and grant a judgment within a period of ninety days from the date of filing the application. If the authority fails to give any order within ninety days, it will be presumed as consent from the authority.
Penalties
The laws provides for very strict punitive provisions. However, applicant aggrieved from the decision of the authority has the right to make an appeal within 60 days in case of rejection of his application. The authority shall consider the appeal within 30 days from the date of submission by the applicant. If the authority fails to give any order within ninety days, it will be presumed as consent from the authority.
Though the Authority is granted with the powers to cancel any approval, previously granted, if it comes to the knowledge of the authority that the information provided by the applicant(s) is not true, correct or is fraudulent or made with malafide intensions.
The Law further provides that no transaction shall be approved which will result in economic concentration through acquisition of more than fifty percent of the relevant market.
Conclusions
As more and more countries are diverting their investment and business in the region, restraining monopolistic trade practices is becoming a crucial factor of consideration for the authorities in Oman. Though the awareness is increasing and regulators are taking effective steps for protection of interest of stakeholders, laws relating to promoting healthy competition and restricting monopoly still have a long way to go. Though the regulators are committed to provide effective system, the region still requires proactive and comprehensive procedures to retain and maintain the confidence of international investors.
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- Article
- October 4, 2016
Introduction
Bahrain published and introduced trademark law on 29th May, 2016 and with this it became second nation in the Gulf Cooperation Council (GCC) to bring GCC trademark law into force after Kuwait where trademark law came into force in the beginning of this year. The GCC trademark law was initially published by GCC Secretariat in mid 2013 following many discussions. The trademark law can be enforced only after publication and acceptance by all the member nations. It is expected that all the members will take effective steps to bring the trademark law into force and it shall become applicable in the year 2017.
Highlights
As opposite to GCC Patent law this law provides for a separate trademark office and filing system in each member nation. GCC Patent law unifies patent registration and all the members will recognize patent issued by GCC Patent office (GCCPO). In other words, trademark holders looking to protect their interest in GCC have to file separate application in each country and obtain trademark registration unlike a single patent registration for all nations.
The law also provides for formation of Commercial Cooperation Committee which has been granted the power to make interpretation of trademark law and make amendments, if any required. It is not yet clear who will head this committee or how this committee will function but it will surely help to tighten the loose ends left in the making of law.
New trademark law also widens the definition of trademark to cover medium and small trademarks and also recognize the color and size of trademarks. It will boost the confidence of international trademark owners towards protection of their rights.
Trademark law also aims to regularize the filing requirements for trademarks in each country and it will become important for trademark owners to keep a track of these requirements.
Trademark law not only raises the fees but also sets non protractible deadlines for various procedural requirements like filing of application and has extended the previous time limits granted for some activities e.g. time limit of thirty days for filing an appeal against refusal of application is now increased to ninety days.
The law also protects the rights of brand owners by prohibiting third parties from using their marks which provides the owner the rights against infringes of registered trademark.
It also imposes stringent punitive provisions against the violators of the law that includes payment of hefty fines or imprisonment or both.
The lawmaker not only provides for protection of trademark owners interest from infringes but also provides timelines to regulatory authorities for dealing and closing the applications.
The undergoing enactments in trademark law in the region bring a lot of opportunities in the region.
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- Article
- October 4, 2016
DUBAI: A new report from Arab Petroleum Investments Corporation (Apicorp), owned by Organisation of Arab Petroleum Exporting Countries (Opec) says that the total committed and planned energy investments in the MENA region could reach $900 billion over the next five years.
The report reveals that planned MENA investments in the energy sector are estimated to increase at a faster pace while the power sector accounts for the largest share of investments at $194 billion.
The report also shows the oil and gas sector will represent $90 billion and $149 billion respectively, with the remaining investments in petrochemicals. Also, projects under study represent by far the largest portion of planned investments, at about $62 billion, according to the study.
The upcoming Water, Energy, Technology Exhibition – Wetex 2016 – which is organised under the directives of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, the Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai, and under the patronage of Sheikh Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance and President of Dewa, at the Dubai International Convention and Exhibition Centre, from October 4 to 6, 2016, will be an added source of leverage of energy investment in the MENA region.
Wetex 2016 will display the latest technologies in oil and gas, clean coal, renewable and clean energy, smart networks as well as energy efficiency solutions at a time when it is imperative to set up advanced infrastructure to produce, transmit and distribute renewable energy.
“The developing economies are in need of creating an advanced infrastructure and developing sustainable ways to produce renewable energy,” said Saeed Mohammed Al Tayer, MD and CEO of Dubai Electricity and Water Authority, Founder and Chairman of Wetex. “We need to ensure innovative government policies, continuous supply of new technologies backed with an appealing investment climate. Being held annually, Wetex helps in promoting investment in the energy sector. That is why it is held under the theme ‘At the forefront of sustainability’ reflecting the leadership of the UAE and Dubai in this regard.”
“Wetex forges strategic partnerships between exhibitors and trade visitors attending the show from all over the world. It showcases energy solutions for electric cars, as well as technologies related to distribution, storage and demand management. Adding the first Dubai Solar Show, to coincide with the show, will attract a larger number of solar energy specialists at a time when the renewable sector is becoming the most prominent sector for investments in the region,” he added.
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- Article
- September 30, 2016
CPAAI International’s Board of Directors has appointed new regional directors in the EMEA, Asia Pacific and North America regions.
Piyush Bhandari, Managing Partner of Intuit Management Consultancy (IMC) has been appointed as the Regional Director for the EMEA region.
As a regional director of CPAAI International, Piyush brings a wealth of experience to the role. Piyush will focus on strengthening the network’s Middle East presence and driving international growth across the region.
About CPAAI
CPA Associates International was established as a global group of high-quality independent CPA and Chartered Accounting firms; it is market exclusive, with members in major cities throughout the world.
The CPAAI International is one of the largest independent network in the world.
The organized association provides members with the capabilities of the largest firm, yet allows each to maintain its local practice while avoiding costly overhead and unnecessary controls.
For over 50 years, CPAAI has provided quality services and resources to members now in 57 countries. The world-wide member firms provide financial, business and tax advice to clients in Asia Pacific, Europe, Middle East, Africa, Latin America, and North America.
- Newsletter
- September 29, 2016
Please find the treaty updates for the month of September 2016.
- Canada – Israel: DTA Signed
- Saint Kitts and Nevis – Germany: TIEA Signed
- Liechtenstein – Austria: DTA Signed
- Cayman Islands – Isle of Man: TIEA Signed
- Japan – Panama: TIEA Signed
- Newsletter
- September 29, 2016
A protocol to amend the provisions of the 1983 India-Mauritius double tax treaty was signed by both countries at Port Louis, Mauritius, on 10 May 2016. The Indian government had been trying to renegotiate the treaty since 1996 to combat issues of treaty abuse and round-tripping of funds.
Under the current treaty, capital gains arising from the disposal of shares in an Indian company are taxable only in the country of residence of the selling shareholder (and not in India). Accordingly a company resident in Mauritius that does not have a permanent establishment in India and which disposes of its shares in an Indian company is liable to CGT only in Mauritius. As Mauritius does not levy CGT, no tax is levied either in India or in Mauritius.
The full version of the protocol has not yet been published, but key changes include amendments to the taxing rights on capital gains and limitation of benefits. Article 13 of the current treaty will be amended such that, from 1 April 2017, capital gains arising from disposal of shares of a company resident in India will be taxable in India.
The protocol contains a “grandfathering” provision such that investments acquired before 1 April 2017 will be unaffected by the protocol and will remain taxable in Mauritius. There will also be a transition period, from 1 April 2017 to 31 March 2019, during which any capital gain generated on the sales of investments acquired after 1 April 2017, will be taxed in India at a reduced rate of 50% of the domestic tax rate (currently 15% for listed equities and 40% for unlisted ones) provided it fulfils the conditions of the Limitation of Benefits (LOB) article. The full domestic Indian tax rate will apply from 1 April 2019.
Under the LOB article, a Mauritian resident will benefit from the reduced CGT rate provided that it satisfies the main purpose and bona fide business test, and is not a shell or conduit company. A Mauritian company will be deemed to have substance provided it meets an annual expenditure threshold of Mauritian Rs 1.5 million (approx. US$43,000) in Mauritius in the period of 12 months immediately preceding the date on which the gains arise.
Other changes include an amendment to Article 26 of the current treaty on exchange of information to bring it into line with international standards. The Protocol also introduces provisions for assistance in collection of taxes and sourcebased taxation of other income.
The current treaty was a major reason for a large number of foreign portfolio investors and foreign entities to route their investments in India through Mauritius. Between April 2000 and December 2015, Mauritius accounted for US$93.66 billion — or 33.7% — of the total foreign direct investment of US$278 billion. However, due to the uncertainty concerning the Mauritius treaty over the last few years, Singapore has emerged as the preferred destination. Cyprus and the Netherlands also enjoy treaties that offer a capital gains tax exemption to investors.
It is expected that the amended tax regime for Mauritius will also be applicable to capital gains for Singapore tax residents. Article 6 of the protocol dated 18 July 2005 to the Singapore tax treaty sets out that the CGT exemption under the Singapore treaty will remain in force only while the CGT exemption under the Mauritius treaty remains in force
The Cyprus Ministry of Finance also announced, on 29 June 2016, that it had completed negotiations for a new tax treaty with India that allows for source-based taxation of capital gains from the alienation of shares. Under the deal, Cyprus will be removed from India’s blacklist of “notified jurisdictional areas”.
As with the Mauritius protocol, India and Cyprus have agreed to generous grandfathering provisions. For investments undertaken prior to 1 April 2017, the right to tax the disposal of such shares at any future date remains with the contracting state of residence of the vendor.
- Newsletter
- September 29, 2016
The total foreign investment in Qatar has touched an estimated QR525.7bn ($144 billion). The country’s total inward investments increased by QR1.6bn at the end of 2014, from a year ago, “Qatar foreign investment survey 2015” released by the Ministry of Development Planning and Statistics (MDPS) noted.
Other foreign investments, meaning transactions from aboard in the form of loans and investments, touched QR306bn, up QR17.3bn compared to the previous year. Foreign Direct Investment (FDI) in Qatar stood at QR141.1bn, while portfolio investments amounted to QR78.6bn. During 2014, Qatar’s foreign direct inward flows witnessed a drop by QR11.3bn.
According to the Ministry’s updated data, Qatar’s outward investment increased by QR35.3bn to QR306.2bn. Other foreign investments consisting of long term loans and trade related short term financial instruments touched QR166bn of the total assets, while foreign direct investment abroad stood at QR117bn and portfolio investments or financial securities clocked QR23.2bn. Outward flow of foreign direct investment amounted to QR3.1bn in 2014 against QR13.1bn in 2013.
Over 90 percent of the inward FDI was accounted for by the oil and gas associated downstream manufacturing and other activities such as transportation and marketing. In terms of the book value of investments, manufacturing activities accounted for 52 percent of the total value of FDI, followed by mining and quarrying (38 percent) and financial insurance activities (4 percent) at the end of 2014.
Over 60 countries contributed to the stock of FDI in Qatar. The top four Group of countries’ share of FDI accounted for 94 percent. They included European Union, US, Other American Countries and GCC. Other American Countries Group accounted for the major share of FDI inward stock in 2014, with 34 percent, followed by European Union (33 percent) US (22 percent) and GCC (5 percent).
The stock of outward direct investment from Qatar stood at QR117bn, an increase of 3 percent over the previous year. Financial and Insurance activities, Transportation and storage; Information and communication, Real Estate activities were the top groups that received the most of the FDI abroad, an estimated 89 percent. The Financial and Insurance group received the major share of total FDI outward stock, 38 percent. Transportation and Storage; Information and communication group received 32 percent of the total outward stock, while real estate received 19 percent of the total outward FDI.
Qatar had FDI abroad in about 80 countries, with the European Union, GCC, Other Arab Countries and Asian group of countries collectively receiving 83 percent of the estimated QR117bn. While the maximum share went to European Union (29 percent), GCC received 26 percent. The other Arab countries and Asian countries received 18 percent and 11 percent, respectively.
The Ministry compiled the investment data with the support of Qatar Central Bank (QCB). International financial transactions made by individuals and by the Government are not covered in this study.
- Newsletter
- September 29, 2016
As of August this year, construction has commenced on the development of a new Sino-Oman industrial city, at a 11.7 square kilometre site located at the Special Economic Zone in Duqm, Oman. The development originates from an agreement valued at US$10.7bn between the Oman government and Chinese investors which will see the city being organised into three separate zones – heavy manufacturing, light manufacturing and a mixed-use area.
The site which is based 550km south of the capital Muscat will feature 35 different projects, which will include Duqm’s second oil refinery with facilities able to process 235,000 barrels a day in addition to an aluminium smelter, magnesium plant, cement and glass factories and solar factory.
One of the main investors Ningxia China-Arab Wanfang which comprises of six private companies supported by the Ningxia regional Government has pledged to developing a minimum of 30% of the site by 2022, with projections for the city to be able house a population of 25,000 by that time.
Forming part of the wider Belt and Road initiative, the investment in Oman follows on from existing Chinese investments in infrastructure projects in Egypt and Saudi Arabia.
- Article
- September 12, 2016
Introduction
Federal Law no. 8 of 1980 “Labour Law” governs the provisions related to employment of nationals and expats in United Arab Emirates (UAE). All the privately held companies and employers are bound by the provisions of this law. State and publically held companies maLabour Lawy also be subject to other laws as may be prescribed for them.
The government of UAE is committed to ensure that all the employees in UAE are given equitable rights and safe environment at work place and labour laws are continuously modified to achieve this objective. Education providers in UAE including Schools, Colleges and Universities are also subject to the provisions of labour law and laws issued by Ministry of Human Resources and Emiratisation of UAE and Ministry of Education (MoE) of UAE. This articles aims to highlight major provisions of these laws and their impact on the education institutions in the UAE.
Teachers in UAE
Whole of Middle East have acute shortage of teachers and retention of qualified academicians is probably the biggest challenge the education industry is facing today. MoE clearly identifies this concern and making efforts to attract and motivate talented teachers to be a part of UAE education industry. Sometimes, these provisions are in variance with the provisions of labour law and sometimes add the burden on employers. It provides for the room for confusion and ambiguities for hiring and retaining the right staff.
Employment Contract
Employment contract issued by schools in UAE should be fixed term contracts by default. Some schools are required to issue standard employment contract as prescribed by MoE. It is important to note here that there are many provisions in it which may vary from the provisions of labour law which adds to the ambiguity about the employment contracts to be issued by educational institutions in UAE. It is advisable to play safe and draft contracts for employees within the boundaries of provision of labour law as well as regulations prescribed by MoE in consultation with a professional expert.
Probation Period
The Standard MoE contract provides from maximum probation period of one month while labour law says that probation period of an employee can be extended for a maximum period of six months.
Working Hours
By laws issued by MoE provides that the working hours of teachers are limited to 18 hours per week which means 24 period per week if the duration of period is 45 minutes and 27 periods per week if the duration of period is 40 minutes. It will facilitate the teachers to undertake research and development activities. It is therefore important to design the contract carefully to have the rights of fruits of research done by them.
UAE Economic Substance Regulations: Compliance & Filing Guidance
Annual Leaves
As per the labour law all the employees are entitled to a minimum 30 days of paid leaves annually and as per the bylaws issued by Ministry of Education teachers are entitled to 60 days paid summer leaves and two paid weeks after completion of six months of service at school. Given the room for confusion, the employer can use this additional leave period a way to limit his liability to pay in lieu of leave but act as a disincentive for teachers to leave before completion of their term.
Notice Period
Labour law do not provides for any notice period to be served but MoE Contract stipulates a notice period of two months. This notice period will facilitate employers to restrain teachers to leave the job in middle of a session.
Compensation Payable
If an employer terminate a fixed term contract before its expiry he will be liable to pay compensation equals to 3 months salary of employee or such higher compensation as may be provided by labour law. On the other hand, if an employee resigns before expiry of a fixed term contract labour law requires him to pay compensation equals to 1.5 months of his salary.
Other Miscellaneous Considerations
The employment contracts should be designed to protect the rights and interests of both the parties and therefore it should therefore restrict teachers and employees of schools from sharing confidential information and working outside of schools after completing their working hours.
In addition to that, the contract should provide adequate freedom to employees and students to design and structure teaching techniques and discuss topics and express opinions without outside interference.
Conclusion
Education industry all over the world has its own complexities in relation to labour laws and UAE is not an exception. Labour laws and MoE should strive for attracting the talent to serve UAE and also ensures to regulate the provisions related to employment laws to protect the interest of students as well as educational institutions in UAE. Teachers shape up the future of any nation therefore it is necessary to attract and retain talent and at the same time to motivate it for supporting continuously in shaping the future. Employment and labour laws should be developed to attain this objective effectively.
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