Doing Business in Dubai

Yesterday afternoon I attended the seminar on Doing Business in Dubai that I announced on 24 Jan 2012.. Shortly before the event I was advised that it had been moved from Knowles Warwick's offices to the Double Tree Hilton Hotel.  As you can see, the hotel's website is not particularly informative and nobody in the area seemed to have heard of an hotel by that name (though they had heard of a Moat House which had been there some years earlier).   There was not even a "Double Tree Hilton" sign outside the hotel.   As a result I missed Steve Knowles's speech altogether and the start of Zayd Maniar's.  However, I did get the slides for both presentations.

According to the slides, Steve dealt with two issues:

• the benefits of people from the UK doing business abroad; and
• how doing business abroad can actually reduce risk.

He also chaired the meeting.

The benefits that he identified were as follows:

• Tax Incentives: some countries offer lower tax rates or other concessions which enable businesses to retain a bigger share of the profits and reduce their costs;
• Cost Advantages: lower labour and raw materials costs;
• Enhancing Brand Value: brands gain prestige if they are used outside the UK;
• Diversification: new ides and technologies;
• Economies of scale: and 
• Enhanced competitiveness.

Doing business abroad reduced risk by enabling businesses to reducing exposure to the adverse economic conditions prevailing in the UK.

Zayd is the international liaison partner for Horwath MAK, Crowe Horwath's office in Dubai.  He read economics at Reading and qualified as a chartered accountant in England and Wales..   His background appears on the "Our Partners" page of the firm's website.  The slides that I missed were about Horwath MAK which has carried on business in Dubai for the last 30 years and an overview of the economic situation in Dubai.   According to the slides, the UAE had experienced a period of high inflation as a result of a property boom but that has now come to an end and the country expected strong and stable growth from tourism, transport, manufacturing and services as well as energy.

I joined the presentation as Zayd outlined the constitutional structure of the UAE (a topic that I had discussed  in "The Legal Order of the United Arab Emirates" on 11 Nov 2011) and profiled the emirates of Dubai and the federal capital, Abu Dhabi.  The economy of the Union has been boosted by the establishment of a number of free zones where foreign owned businesses could operate without a local partner and repatriate their profits as and when they wished.  Some of these zones were located around ports but others are specialist zones such as the Commodities Centre, the Knowledge Village and, of course, the Dubai International Financial Centre.  Zayd said Horwath MAK were in several of those zones.

Zayd outlined the types of businesses entity that can be established in the UAE. These are very much the same as everywhere else, namely public and private limited companies, general and limited partnerships and "partnerships limited with shares" which I took to be limited liability partnerships.  Except for businesses in the free zones, it is necessary to incorporate in the UAE with a local partner.  There is no federal income tax on salaries or wages but the federal government is thinking of introducing VAT and there are high import duties on certain goods.   

At this point, Steve chipped in to point out the absence of income tax meant that there was nothing against which one could get tax relief.  If losses were to be expected in the early stages of an enterprise it could be better to bear those losses here or some other country and somehow export the business to the UAE.  However, that will require a lot of thought and some care because Steve and Zayd also warned in a later discussion that tax is levied in the UK on earnings of businesses that are managed from this country wherever the income is generated.   Zayd told a very sad tale about one small business which was landed with a £400,000 tax bill because it failed to heed Zayd's advice to get tax advice from the UK as well as the UAE. It is worth mentioning that Steve's nickname is "tax champion".

Knowles Warwick had asked for questions to be submitted in advance and I had asked two to which I already knew the answers.   My first question was on the nature and extent of IP protection in the UAE. Zayd confirmed that the authorities took a dim view of counterfeiting and piracy. He mentioned a case in which he had been involved where Burgerking had moved against a fast food restaurant whose proprietor's surname was the Arabic word for King.  IP infringements can often be resolved without recourse to litigation because customs officers intercept infringing goods at the border or other administrative action can be taken. The penal code of the UAE is as tough as Texas's in that almost any offence is punished with a custodial sentence and/or deportation. There are, however, lacunae in that the emirates have their own laws which sometimes allow anomalies.   My second question was on the DIFC court which Zayd thought was a good thing.  He went into some detail about its small claims jurisdiction.  I made a few supplemental observations about the recent extension of jurisdiction and that the court was an English speaking, common law enclave with English and Commonwealth judges and counsel in a civil law federation.

Other questions covered setting up branches and businesses, restrictions on the import of goods such as medicines and medical devices, market research and making contacts.   We were told to familiarize ourselves with different business norms and customs.  Initial connections can be made through UK Trade and Investment and occasionally through the British consulate.

Altogether, we had a very good afternoon.  I already knew Steve quite well and I was pleased to meet Zayd. I had already worked with a forensic accountant in one of a Horwath's British offices in several cases and got to know several others over the last 20 years.   Should anyone wish to follow up this discussion, he or she can call me on +44 161 850 0080 or fill in my contact form. He or she can also contact me through Facebook, Linkedin, Xing or twitter.

Copyright and Related Rights in the United Arab Emirates: Part II

This article continues and concludes my introduction to copyright and related rights in the United Arab Emirates ("UAE"). In Part I I discussed the treaties and conventions to which the UAE is party, the implementing legislation, copyright works and performances, economic and moral rights and the term. In this Part I consider subsistence, licensing and assignment, regulation of collecting societies, infringement and remedies.

Federal Copyright Copyright Law
The basic copyright law statute is Federal Law No. (7) of the Year 2002 Concerning Copyrights and Neighbouring Rights ("FL7"). An English translation appears on the WIPO website.

Subsistence
Art 2 of FL7 confers upon owners of copyright and neighbouring rights the protection of this law against an aggression against their rights. Art 4 establishes a system for the registration and deposit of copyright works.According to the WIPO website, the copyright office for the UAE is the Ministry of Publishing and Copyright Department, P.O. Box 901, Abu Dhabi Tel +971 506 162 120, Fax +971 262 62 867. The Director of the authority is Fawzi Abdel Aziz Algabri.

Transfer of Rights
Subject to art 15, art 9 of FL7 permits a copyright owner to transfer all or part of his economic rights provided that he does so in writing and specifies the right, purpose, duration and place of exploitation.  Art 10 permits such transfer to be in consideration of money or moneysworth provided that the fairness of the transfer may later be reviewed by the courts under art 11. Art 15 prohibits the alienation of all or more than 5 prospective works.

Compulsory Licensing
Art 21 of FL7 permits any person to apply to the Ministry of Information and Culture for a compulsory licence for the translation or reproduction of a copyright work. The Ministry sets the terms of such licence.

Exceptions to Copyright
Copyright is not infringed by any of the following acts:

• making a single copy of a copyright work (other than a work of fine or applied art, work of architecture of computer program except as otherwise provided) for personal and non-commercial or professional but personal use of the copier under art 22 (1);
• making a single copy of a computer program for back-up purposes by a licensed user for so long as the licence subsists under art 22 (2);
• use in judicial proceedings under art 22 (3);
• making a single copy subject to acknowledgements for the purpose of preserving the original or research or private study if not otherwise licensed under art 22 (4);
• quotation of short passages for the purposes of criticism, discussion or review provided that the extract is accompanied by a proper acknowledgement under art 22 (5);
• performing a work in private to a domestic or academic audience without remuneration under art 22 (6);
• including publicly available fine arts, applied or plastic works of art or works of architecture in a broadcast under art 22 (7); and
• reproduction of extracts from written works, sound recordings or audio-visual performances for cultural, educational, religious or vocational training provided that no more is taken than is reasonably necessary for the purpose, the author is mentioned, no profit is intended and it is not possible to obtain a licence by other means under art 22 (8).

Art 23 permits newspapers, periodicals and broadcasters to copy excepts from published works and speeches for reporting news and current affairs upon the conditions specified in the article.

Regulation of Collecting Societies

Collecting societies have to be licensed annually by the Minister of Information and Culture pursuant to art 32 of FL7.They are required to keep records of their members and finances which may be inspected by the Ministry. Licences may be withdrawn at any time.

Remedies

Copyright infringement is an offence punishable by fine or imprisonment under art 37 of FL7.  Allegedly infringing copies of copyright works may be impounded by customs under art 36.  There is also a right of pre-emptive seizure under art 34 provided that proceedings are instituted within 15 days (art 34 (6) FL7).

Further Information
Should anybody wish to discuss this topic further, he or she can call me on +44 161 850 0080 or fill in my contact form. He or she can also contact me through Facebook, Linkedin, Xing or twitter.  

Sheffield Seminar on Doing Business in Dubai

Sheffield accountants Knowles Warwick plan a free seminar on "Doing Business in Dubai" at their offices at 183 Fraser Road, Sheffield, S8 0JP on Monday, 20 Feb 2012 between 14:30 and 16:00.


The speakers will be Steve Knowles, President at Sheffield & District Society of Chartered Accountants and Managing Director of Warwick Knowles, and Zaid Maniar, International Liaison Partner of Crowe Horwath's office in the United Arab Emirates.

Topics for discussion will include:

• the benefits and pitfalls of establishing a business in Dubai
• what are free zones and how do they work
• international tax planning advice, and
• local business rules and customs.

I shall be there with lots of questions about the Dubai International Financial Centre and its courts.

Places at the seminar are likely to go quickly so call Sarah Whiteley on 0114 285 0165 if you want to attend.

Copyright and Related Rights in the United Arab Emirates: Part I

Because of the complexity of the topic I shall discuss it in two separate articles.   In this article I shall deal with the Treaties and Conventions to which the United Arab Emirates ("UAE") is party, the applicable domestic legislation, the works that are protected, economic and moral rights and the term of subsistence of these rights.  In Part II I shall discuss exceptions to copyright and rights in performances, collecting societies, infringement and remedies.


International Agreements
The UAE was one of the first members of the World Trade Organization and is party to the Berne Convention, the WIPO Copyright Treaty, the Rome Convention and the WIPO Performers and Phonograms Treaty. Those conventions and treaties require the UAE to protect the works of art and literature of its nationals and those of nationals of other contracting parties.

Implementing Legislation
The legislation that implements the UAE's obligations under those instruments is Federal Law No. 7 of the Year 2002 Concerning Copyrights and Neighbouring Rights ("FL7").   It is available in Arabic and English on the WIPO Collection of Laws for Electronic Access.  FL7 was issued on 1 July 2002 by the President of the Union with the consent of the Council of Ministers and the Principal of the Supreme Council of the Union.

Overview
FL7 codifies the law of copyright and rights in performances. Compared to the Copyright, Designs and Patents Act 1988 of the United Kingdom it is a very short instrument consisting of 50 articles in 8 sections over 16 pages including contents and recitals.

Copyright Works
Art 2 of FL7 lists the following:

1. Books, pamphlets, essays and other written works;
2. Computer programs and applications, databases and analogous works;
3. Lectures, addresses, sermons and other works of similar nature;
4. Dramatic works and mine,
5. Musical compositions with or without words,
6. Sound and audiovisual works,
7. Architectural works, engineering plans and layouts,
8. Drawings, paintings, sculptures, lithographs, engravings and similar works,
9. Photographic and analogous works,
10. Works of applied and plastic art,
11. Illustrations, geographical maps, sketches, three-dimensional works relative to geography, topography and architecture (art 2).

Copyright does not extend to Ideas
Art 3 makes clear that "protection does not extend to mere ideas, procedures, methods of work, mathematical understandings, principles, and abstract facts, but extend to creative expression in any of them."

Exceptions
Art 3 also provides that protection does not extend to:
(1) official documents such as laws, regulations, decisions, international agreements, judgments, arbitrators’ awards and the decisions of the administrative committees having judicial competence;
(2) news, events and the current affairs which constitute merely media news, or
(3) works in the public domain.
However, copyright can subsist in compilations of such materials.

Authors' Economic Rights
Art 7 reserves to the author (or persons deriving title through the author) the right to exploit the work by any means including copying, "electronic loading or storing, acting a play by any means, broadcasting, re-broadcasting, transmission, performance, public communication, translation, modification, alteration, rental, lending or publication by any means including provision of publication through computers or information nets or communication nets or other means." These rights can be assigned, licensed or seized by creditors in contrast to moral rights which are inalienable.


Authors' Moral Rights
Art 5 confers the following moral rights upon an author:

"1. The right to determine first publication of the work;
2. The right of writing the work in his name;
3. The right to protest against alteration of the work if the alteration leads to distortion,
mutation or causing derogation to the author.
4. The right to withdraw his work from circulation in case of serious reasons justifying
such an act."

Rights in Performances
Section 3 of FL7 confers economic rights on performers, "producers of phonograms" and broadcasters.   In addition, performers enjoy moral rights in their performances.

Performers
Performers are defined in art 1 of FL7 as:

"The actors, singers, musicians, dancers and other persons who recite, chant, play or perform by any way literary or artistic works or others protected according to the provisions of this law or inclusive within the public property."

Art 17 confers the following economic rights on performers

"1. The right to transmit their unfixed performance and communicating it to the public.
2. The right to fix their performance on a phonogram.
3. The right to reproduce their fixed performance on a phonogram."

Their moral rights are as follows:

"(i) The right of having the performance in their names whether live or recorded.
(ii) The right to suspend any distortion, mutilation, modification or derogation action, which would be prejudicial to their status."

Producers of Phonograms
A phonogram is defined by art 1 as "any fixation of certain performed sounds addressing the hearing irrespective of the mode of fixation or the used device." The definition also includes "sounds fixation with picture in order to prepare audiovisual work unless agreed otherwise." A "producer of a phonogram" is defined by the same article as "the natural or legal person who records for the first time sounds of a performer or other sounds."

Art 18 confers the following rights upon producers of phonograms:

"1. The right to prohibit any exploitation of their phonograms by any means without their authorization. Copying, rental, broadcasting, re-broadcasting, availability to the public via computer or other media is an exploitation prohibited to be used by third parties.
2. The right to disseminate their recordings via wire, wireless, computer or other means."

Broadcasters
Art 19 confers the following rights upon broadcasters:

1. The right to grant licenses for exploitation of their recordings and broadcasting programmes.
2. The right to prohibit any communication of their programmes or recordings to the public without their authorization. Recording of such programmes, copying or re-copying their recordings, rental, re-broadcasting, and communication to the public by any means are prohibited to the third parties in particular.

Term
Copyright subsists for the following terms in respect of the following categories of rights:

• Authors' Economic Rights: the life of the author or in the case of a joint work the life of the last surviving author plus 50 years (art 20 (1) and (2));
• Economic Rights in Applied Arts: 25 years from first publication (art 20 (5));
• Economic Rights of Performers: 50 years from the beginning of the calendar year after the performance (art 20 (7));
• Economic Rights of Producers of Phonograms: 50 years from the beginning of the calendar year after the publication of the phonogram (art 20 (8)); 
• Economic Rights of Broadcasters: 20 years fro the beginning of the year of first transmission (art 20 (9)).

Further Information
Should anybody wish to discuss this topic further, he or she can call me on +44 161 850 0080 or fill in my contact form. He or she can also contact me through Facebook, Linkedin, Xing or twitter.
Modified 11 Feb 2012

News from Qatar

I have just received some interesting news from Qatar in an email from Mr. Brahim Benmin, a legal advisor to the Council of Ministers:

• new anti-counterfeiting legislation which empowers the authorities to impound goods such as compact discs at the borders; and
• a very tempting employment opportunity for a senior intellectual property lawyer at the Qatar Foundation.

I am told that the text of the new anti-counterfeiting law is available only in Arabic. I shall post a link to the text and any translation as soon as I can. Anyone interested in the intellectual property laws of Qatar (which must include candidates for the job with the Qatar Foundation) can find translations of the country's constitution, intellectual property legislation and the treaties to which Qatar is party on Qatar's page of the WIPO website.

The Qatar Foundation for Education, Science and Community Development is established to help transform Qatar from on oil based to a knowledge based economy. I have not yet found any details of the job but you can find information on careers with the Foundation generally and contact numbers and an email to the personnel office on the "Work at Qatar Foundation" page of the Foundation's website. If anyone at the Foundation wants to add any more details of the job or the work of the Qatar Foundation in general I shall be very glad to publish them.

Mr. Benmin has told me that his government is very keen to advise and assist businesses and institutions that wish to invest in or trade with Qatar. I shall be glad to pass on any serious enquiries to him if you contact me on +44 161 850 0080 or complete my contact form.

DIFC Courts Spread Their Wings

In the DIFC Court I wrote about the 45 hectare free zone in Dubai known as the Dubai International Financial Centre ("DIFC") and the special English speaking common law jurisdiction within the Centre aptly described by its present Chief Justice Michael Hwang SC as a "common law island in a civil law ocean" (address to Lawasia Conference, Kuala Lumpur 1 Nov 2011) which has contributed greatly to the DIFC's success.

When I wrote that article in January 2011 the court's jurisdiction was limited by art 5 of Law No 12 of 2004 to disputes relating to the DIFC. The practical effect of this limit was shown by Sir Anthony Colman's decision in Corinth Pipeworks S.A. v Barclay's Bank PLC of 8 Feb 2011 which I discussed in my case note of 20 March 2011. In that case the court refused to entertain an action arising out of an allegedly false statement by an employee of the defendant bank made within Dubai but outside the Centre on the ground that it had no connection with the DIFC.

By a decree dated 31 Oct 2011 HH Sheikh Mohammed bin Rashid Al Maktoum, the ruler of Dubai who is also Vice-President and Prime Minister of the United Arab Emirates, has extended the DIFC courts' jurisdiction to cover any business dispute from any part of the world (see the DIFC courts' press release of 31 Oct 2011).

The significance of this announcement is that it should shortly be possible to resolve a much wider range of cases, including intellectual property licensing and maybe even some infringement disputes, before an English speaking common law tribunal applying rules of procedure modelled on the Civil Procedure Rules. Since the UAE is party to a number of international and regional agreements on the enforcement of judgments it may be possible to refer cases from other parts of the Middle East or North Africa. Clearly the parties have to consent to the jurisdiction of the DIFC courts unless they come within its jurisdiction on some other ground. No doubt that can be done by a choice of jurisdiction clause specifying the DIFC courts in a licence or other agreement.

Should anybody wish to discuss this article or the topic in general he or she should not hesitate to contact me on +44 161 850 0080 or complete my on-line contact form.

Background Reading

Jane Lambert "The Legal Order of the United Arab Emirates" 11 Nov 2011

Sir Anthony Evans "Dispute Resolution in the DIFC" 16 Feb 2009 (DIFC website)

Sir Anthony Evans "Dispute Resolution in the DIFC" Oct 2008 (DIFC website)

Michael Hwang SC "The Courts of the DIFC - A Common Law Island in a Civil Law Ocean" (DIFC website)

Jane Lambert "DIFC Courts" 7 Jan 2011 (JD Supra website)

The Legal Order of the United Arab Emirates

I have written several articles on Dubai ("Why Dubai or the Rest of the Gulf for that Matter", 14 Jan 2011), the Dubai International Financial Centre ("DIFC"), "The DIFC Courts", 7 Jan 2011, their jurisdiction (Corinth Pipeworks SA v Barclays Bank Plc 20 March 2011) and rules of court (12 May 2011), the DIFC laws of confidence (27 Jan 2011), passing off (7 April 2011) and data protection (1 Aug 2011) and the new dispute resolution policy for .ae domain names (22 Jan 2011). Dubai is, of course, a member of the United Arab Emirates ("UAE") and it is high time for me to discuss the legal context in which the DIFC is set.

The UAE

The UAE is a federation of the following hereditary monarchies or emirates:

• Abu Dhabi
• Ajman
• Dubai
• Fujairah
• Ras al-Khaimah
• Sharjah, and
• Umm al-Quwain.

These emirates have a combined population of 8.26 million in a land area of 83,600 square kilometres. Their federal capital is Abu Dhabi.

UAE's Constitution

The UAE's constitution was adopted by the rulers of the emirates on 2 Dec 1971. Art 1 describes the Union as "an independent, sovereign, federal state" which "any other independent Arab country may join". Art 6 declares that:

"The Union is a part of the Great Arab Nation to which it is bound by the ties of religion, language, history and common destiny .

The people of the Union are one people, and one part of the Arab Nation."

Art 3 declares that

"The member Emirates shall exercise sovereignty over their own territories and territorial waters in all matters, which are not within the jurisdiction of the Union as assigned in this Constitution."

However, art 2 provides that the Union is to exercise sovereignty in matters assigned to it by the constitution throughout the territories of the emirates. Art 4 precludes the cession of that sovereignty.

Aims of the UAE

The aims of the Union as set out in art 10 are as follows:

• the maintenance of the UAE's independence and sovereignty
• safeguarding its security and stability
• the defence against any aggression upon its existence or the existence of its member states
• the protection of the rights and liabilities of the people of the Union
• the achievement of close co–operation between the emirates for their common benefit in realising these aims and in promoting their prosperity and progress in all fields
• the provision of a better life for all citizens together with respect by each emirate for the independence and sovereignty of the other emirates in their internal affairs within the framework of the constitution.

Economic Union

Art 11 establishes an "economic and customs union" between the emirates with free movement of capital and goods. Free movement of labour is implicit in art 8 which provides that the citizens of the Union shall have a single nationality.

Institutions

Art 45 establishes the following federal institutions:

1. Supreme Council,
2. President and his Deputy,
3. Council of Ministers,
4. Federal National Council, and
5. the Union Judiciary.

Supreme Council

The Supreme Council consists of the rules of the emirates or their deputies and is the highest authority of the Union (art 46). It exercises executive and legislative powers.

President

One of its most important functions of the rulers assembled in the Supreme Council is to choose the President and Vice-President from among their number pursuant to art 51. The President and Vice-President hold office for 5 years and exercise wide executive powers under art 54. However, a convention appears to be developing that the ruler of Abu Dhabi is ipso facto the President of the UAE. The incumbent is Khalifa bin Zayed Al Nahyan who inherited that office from his father, the first President of the Union.

Council of Ministers

Art 55 of the constitution establishes a Council of Ministers consisting of a prime minister, a deputy prime minister and a number of ministers chosen from citizens of the UAE known for their competence and experience. The Council has responsibility for such matters as defence, foreign affairs, internal affairs, justice, posts and telecommunications, education and public health.

Federal National Council

Art 68 provides for a Federal National Council consisting of 40 members representing the emirates in rough proportion to their population. The Council constitutes the popular element of government though not necessarily a democratic one since art 69 allows each emirate to choose the method of selection of its representatives.

Union Judiciary

Art 95 establishes a Union Supreme Court and Union Primary Tribunals.

Legal System

In addition to the Union Judiciary, each emirate has its own courts. Except for the DIFC (which is a common law enclave) the legal system is based on civil or Roman law though Islamic law remains for family and inheritance matters.

Further Information

Anyone wishing to discuss this article should call me on 0800 862 0055 or get in touch by twitter, Linkedin, Facebook, or my contact form.