| Reference Model Regulation |
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| Written by Administrator | |
| Friday, 30 March 2007 | |
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Reference Model Regulation (Law) for the Promotion of Foreign Investment in the GCC States Article (1) The following terms shall have the meanings hereby assigned to them, unless the context otherwise requires: the “Council” means the Cooperation Council for the Arab States of the Gulf. the “State” means the Member State in the Cooperation Council for the Arab States of the Gulf. the “Competent Authority” means the Official entity in charge of the application of this regulation according to its organizational rules. the “Foreign investor” means a natural or legal person who is not a national of any of the Council States. the “Foreign capital” means any asset that can be valuated in the local currency or any exchangeable currency at the prevailing market rates by the competent entity as follows: A. The cash remitted by the foreign investor to the country for investment therein. B. The machinery, equipment, installations, transportation modes and materials brought from abroad for the purposes of investment. C. The intangible rights such as licenses, patents, trademarks and names owned by the foreign investor and registered under the laws of the country subject of investment. D. Profits and proceeds of the foreign investment if they have increased the foreign capital or are used for the establishment of new investment projects. the “Foreign investment” means investment of the foreign capital in an activity licensed under this regulation (law). the “Rules of implementation” means the rules issued by the competent authority of the country for implementation of the provisions herein. Article (2) The present regulation aims at: 1. Achieving economic integration. 2. Laying down plans for the attraction and settlement of state of the art technologies that meet the requirements of the region and the market peculiarities thereof, and preserve the environment and its resources. 3. Giving priority of investment to the projects that help minimize dependence of the Council States on foreign sources for the supply of their essential and strategic requirements, those which diversify production and broaden is base, and also to those which are export oriented, competitive in the foreign markets, capital and technology intensive and have a high value-added, and focusing attention on training the national manpower and projects that best exploit the resources where the Council States have a competitive advantage. 4. Creating job opportunities for the GCC nationals. 5. Promoting GCC exports. Article (3) The present regulation (law) applies to all foreign investments, those excluded under a special agreement, by a decree, or relating to the extraction or exploitation of the natural resources under a concession or a special agreement. Article (4) An investment committee shall be formed in each State. The functions of this committee shall be as follows: 1. (a). to facilitate project licensing and registering procedures, and to overcome the impediments that may encounter the setting up of the project. 1. (b). to indentify and promote the investment fields and opportunities available in the State. 2. to propose the necessary incentives that are likely to encourage the foreign companies to invest in the State. 3. to develop a mechanism for monitoring the performance of the foreign investments in the State for identification of the impediments that may be encountered and overcoming them. 4. To concentrate efforts on selecting qualified international investors to be attracting and brought in to the State for investments therein. 5. to coordinate with the foreign investment committees in the GCC states to achieve the objectives envisaged in this law. 6. to handle the complaints and disputes arising among investors. 7. to implement any other duties designated by the competent authority. Article (5) The Rules of implementation shall specify the foreign investment licensing requirements and procedures. Article (6) When necessary, the competent authority may except the foreign investment from the national ownership percentage stipulated in the regulations and laws in force in each State. Article (7) The competent authority shall keep a register for entering the foreign investments licensed under this regulation (law). The implementing rules shall outline the relevant details, conditions and procedures. Article (8) Foreign investment, licensed under the provisions of this regulation (law), may not be confiscated or expropriated unless it is proved by the laws and regulations in force in the country that it is in an overt contradiction with a public interest, in which case, the foreign investor shall be entitled to a fair compensation at the exchange rates prevailing in the markets at the time of confiscation. Article (9) 1. The foreign investor may transfer his investment to another foreign investor, approved by the Foreign Investment Committee (FIC), or to a national partner, or, in the case of partnership, to cede it to his national partner, subject to the regulations and laws applicable in the country of investment. 2. In the event the ownership of a foreign investment is transferred to another foreign investor, the invesment shall continue to be treated according to the provisions herein. Article (10) Any amendment of this regulation (law) shall not apply to the foreign investor, hereby licensed, if it proves to prejudice him. However, expansions to any investment, existing at the time of amendment, shall be excluded. Article (11) The foreign investor has the right to remit the capital and all kinds of the profits as well as the compensations provided for in Article (8) herein outside the GCC states, or dispose of them in any other legal way, according to this regulation (law). Article (12) The foreign investor’s intellectual and industrial property rights and his trademarks are protected under the regulations and laws in force in the country. Article (13) Foreign investments may be granted all or some of the following privileges, at the discretion of the competent authority in each case: 1. Exemption from the income tax or any other taxes for five years. The competent authority may extend this period at its discretion, according to the area of investment and the development priorities. 2. Benefiting from the privileges derived from the agreements for the avoidance of double taxation and investment security. 3. Partial or whole relief from the customs duties imposed on the following imports: a. Machinery, equipment and parts required for construction, expansion and upgrading. b. Raw materials, semi-finished goods and the packaging materials required for production purposes, provided that similar goods (in respect to quality and price) are not available in any of the GCC states. 4. Allocating the property and real estates required for their purposes according to the law applicable in the State. 5. Recruiting the foreign manpower required for their purposes according to the regulations and laws applicable in the State, provided that national manpower is not available. 6. Provide protection for the national industries (having a foreign capital) when such industries encounter an unfair competition from foreign manufactures. Article (14) The foreign investor shall: 1. Give priority to the national manpower (i.e. national workmen and technicians), if any, and provide them with the training and skills required for the progress of work. 2. Protect the environment against pollution, comply with regulations, laws and instructions relating to the public security and health, and shall not expose the others to dangers. 3. Refrain from committing any act that may contravene the general system and ethics of the State. Article (15) Should the foreign investor violate the conditions whereby the license is granted to him under this regulation (law), the competent authority shall take the following steps, on a case-by-case basis: 1. Notice. 2. Warning. 3. Partial or whole deprivation of the granted privileges. However, the foreign investor may request that the deprivation decision be reconsidered, if he corrects his violation (offense). 4. Administrative suspension of the project. 5. Withdrawal of the license and liquidation of the investment. Article (16) It may be agreed that any dispute arising between the foreign investment ventures and other parties be referred to a local or international arbitration body, including the Commercial Arbitration Center of the GCC states based in Bahrain. Article (17) The competent authority in each State shall issue the rules for implementation of this regulation (law). |
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| Last Updated ( Friday, 20 July 2007 ) |
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