Trade and Export Middle East | April 2015 by Trade Export

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BUSINESS INTELLIGENCE FOR INTERNATIONAL TRADE www.tradeandexportme.com

Contents

62 ADVISORY BOARD Key personalities sharing their expertise to ensure that we bring you the latest trends and issues in the field of trade. International Trade 60 TRADE AND EXPORT: IMPACT OF LOWER PRICES How will you cope in this new economic climate? New Frontiers: Oman 64 From theory to practice SME Advisor together with Presenting Partner NBAD, hosted two VIP round table discussions assessing the flourishing Omani SME scene. We bring you highlights of the event. Trade & Growth 68 Doing trade with Belgium HE Dominique Mineur, Ambassador of the Kingdom of Belgium in the UAE, shares compelling insights.

Belgium is a sound destination for investments, with an attractive business and fiscal environment. p68

TRADE AND EXPORT MIDDLE EAST

The 2030 Vision is already proving to be a key catalyst in encouraging full and proper integration between public and private sectors p80

VIP Interview 72 Flying high RamJet Aviation, a thriving SME based at the world-class RAK Free Trade Zone, shares its success story. Legal 76 Intellectual property considerations in Saudi Arabia Legal experts from Clyde & Co. discuss key issues regarding IP rights in the largest economy in the Arab world. Event review 80 A day marked in history ‘Masterclass – the Abu Dhabi Economic Vision 2030’ brought together an extraordinary cluster of world-class economists, captains of industry and key Government decision-makers. SME Advisor presents you exclusive highlights…

TRADE and export middle east

ADVISORY BOARD Trade and Export Middle East presents a dynamic group of industry experts and leaders as part of its Advisory Board. The following key personalities will help add value to our analysis and ensure that we bring you the latest trends and issues in the field of trade.

H.E Saed Al Awadi CEO, Dubai Exports, Department of Economic Development, Dubai

Dr. Adeeb AlAfeefi Director, Foreign Trade & Export Support International Economic Relations Sector, Department of Economic Development, Abu Dhabi

Khalil Saqer Bin Gharib Corporate Communications Director, Dubai Customs

Lakshmanan Sankaran Chairman, Regional Banking Commission (MENA)- ICC Paris

Moin Anwar Trade & Investment Commissioner (Middle East), New South Wales Government, Australia

Ramy Jallad Acting CEO, Ras Al Khaimah Free Trade Zone

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INTERNATIONAL TRADE

Trade and Export: The impact of lower oil prices

Always the biggest economics and trade news story, itâ&#x20AC;&#x2122;s a truism that the fall in oil price has considerable implications for businesses relying heavily on trade operations. What are the factors now confronting your SME? We explore the issues and opportunitiesâ&#x20AC;Ś

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INTERNATIONAL TRADE

Last June, the world - and many of the oil-producing nations of the Middle East - reeled under the shock of falling oil prices driven by over-supply and a more powerful US dollar. This ‘oily’ predicament has posed significant challenges to GCC markets, where for the first time in more than a decade, revenues are endangered by the new fact of life that the wholesale price may be dangerously close to the base production cost. With the historic dependence on commodity exports, the new realities reflect how vital it is to foster economies away from total dependence on commodities. The UAE, for example, has always been quick to realise that focusing on diversifying economies will help to ensure sustainable economic growth and stability - but while many near-neighbours may share the vision, in practical terms the diversification is far from realised and they are now ‘feeling the pinch’. Notwithstanding, in many cases the challenge is that government spending plans were planned for a longer-term view, and they are not necessarily unsustainable. Ambitious plans for investment and infrastructure building across the region aims to stimulate growth in the medium term, and could also raise long-term productivity. UAE not affected much… It’s easy to pay lip-service to the views of trade pundits and industry experts who state that the impact of the price drop on Gulf countries will be not be monumental due to the massive fiscal reserves in the region. Yet in reality this tends to be more of a comment about the UAE and KSA than it does about the fossil fuel producers as a whole. Let’s take the UAE, for example: a recent analysis by EY showed that domestic mergers and

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INTERNATIONAL TRADE

Lower oil prices are expected have a multidirectional effect - while they will lead to contraction in the oilrelated sector, they will have a positive boost in retail, tourism and the transportation sectors.

acquisitions deals in the UAE account for 45.7 per cent of the total number of M&A deals in the Middle East, making it the leading country in the region. According to the analysis, as many as 50 acquisitions targeting UAE based companies were announced last year. As an acquirer, the UAE accounted for 53 deals or 23 per cent of announced deals in the region, while in value terms the country led the region with 46.4 per cent of deals worth US$7.19bn. The UAE dominated as the target country with the largest number and value of inbound mergers and acquisitions deals in MENA which points to the strong confidence of international investors in the UAE. The UAE’s Purchasing Manager’s Index (PMI) for January showed strong improvement in business, indicating that the non-oil private sector continued to grow despite sharp decline in oil prices. Last year the economy of the UAE grew by more than four per cent. While this year it may be slowed by lower oil prices, economists say the part of the country’s GDP that is not heavily dependent on hydrocarbons to make money will still flourish, including transport and tourism. Dubai’s economy is much more diversified than others in the Arabian Gulf. Lower oil prices are expected have a multidirectional effect - while they will lead to contraction in the oil-related sector, they will have a positive boost in retail, tourism and the transportation sectors. The ambivalent economy The oil crisis has resulted in increased debt defaults, rising interest rates, rising unemployment, increased recession, defaults on derivatives, drop in stock market prices and many more economic tragedies. Economic confidence is prompting organisations to focus on growth and many are turning to their

finance departments to not only crunch the numbers but also devise strategy on finding new sources of revenue generation. Commercially-savvy accountants who can provide financial principles to operations, IT, sales and marketing departments are well positioned to help steer their organisations towards greater economic prosperity. Fast growth is easier to achieve in sectors driven by innovation, and launching new products or services can drive considerable growth quickly. But under such precarious market conditions, businesses should opt for gradual, organic growth that is more manageable and involves less risk. Rigorous cost management and a disciplined drive for operational efficiencies help fuel that profitability. But even as SMEs continue to drive the next iteration of cost take-out, to maximise revenue growth they also need to keep strategic reinvestment in the business on the table. That may require a shift in cash-allocation strategies. For example, strategic capital spending and market expansion may be needed in lieu of returning cash to shareholders or dipping into cash reserves to pay down debt.

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INTERNATIONAL TRADE

A key to successful transformation will be finding the right balance between global and local operations that support the growth agenda.

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Expanding in troubled times Before thinking about expanding the business, your SME must first have a stable platform from which to take off. As an SME owner, you have to iron out the creases in initial operation, including making it profitable. Becoming personally involved in all the functions of your business is the first prerogative. Then you can detect weaknesses that can be remedied and changes can be made rapidly and at less exposure to loss. A key to successful transformation will be finding the right balance between global and local operations that support the growth agenda. Your company should consider a globally integrated operating model that pulls back- and middleoffice functions into a single organisation agile enough to react swiftly in today’s volatile markets. Several businesses are progressing rapidly toward such an integrated structure. Their efforts show that changing the operating model to balance local and global requires close collaboration between a business and its expanded ecosystem of peers, customers and suppliers. New markets can mean new compliance requirements. You may need to ensure that your organisation is agile enough to respond to more complex government regulations, including management of the evolving International Financial Reporting Standards as well as mounting pressure to fulfil environmental and labour obligations across multiple geographies. Your business will also need to understand supply-and-demand forces more accurately if they are to drive the best possible business outcomes. Analytics can help them keep pace with the increasing volume and velocity of data as business goes digital. Analytics can also give them real-time, in-quarter insights into customer trends and preferences.

Expanding your business means you will be taking on more risk. Once you have made it and are ready for growth, you will become exposed to new dimensions of risk. And the only way to avoid risk is not to make mistakes. This is where a Board of Advisors becomes an important participant in the growth programme, and this means enticing the best brains - both in the business and outside it - to form an advisory panel that will become a cost-free insurance policy against making mistakes. Despite cost pressures, you may want to boost your investment in digital technologies - or risk being left behind. Retail and consumer electronics are leading the way in leveraging cloud computing, mobile technologies and social media to deliver the personalisation that their digitally empowered customers now demand. The ‘Golden Rule’ still applies… The golden rule of running a business is get up and get going come hell or high water. With strong survival instincts, you can steer your company to rise above the current oil spill and float on stable waters.

For an online version, please visit: www.tradeandexportme.com/2015/04/theimpact-of-lower-oil-prices/

NEW FRONTIERS: OMAN

From theory to practice OMAN’S COMMITMENT TO BUILDING A DIVERSIFIED ECONOMY THROUGH ENTREPRENEURSHIP AND THE ROLE OF THE SME IS ONE OF THE MOST SOPHISTICATED ECONOMIC VISIONS IN THE REGION. TWO VIP ROUND TABLE EVENTS IN APRIL, LED BY PRESENTING PARTNER NBAD, DEMONSTRATED HOW AMBITIOUS THAT ASPIRATION REALLY IS AND CREATED AN AGENDA THAT BUILDS A HIGHLY PRACTICAL BRIDGE WITH THE REALITIES FACING SMEs

On 1st August 2014, the Central Bank of Oman published an extremely comprehensive White Paper report assessing the future of SMEs in Oman and the best and most feasible strategies for delivering that future vision. Titled ‘Towards a Growing, Competitive and Dynamic SME Sector in Oman’, it highlighted four key industries as the priority areas of focus, namely • Transport and Infrastructure • Manufacturing • Healthcare • Tourism The White Paper then identified some of the major issues which, it believed, would need to be addressed by SMEs in these sectors as they played a paramount role in diversifying the economy away from fossil fuels. This ‘six pillar’ approach is best defined as • The quest to turn your business into a successful and competitive local brand • The need to overcome key infrastructure hurdles • Closing the cashflow and deliverables gap • Capitalising effectively on public/ private sector partnerships • Gathering market intelligence and all-important customer data • Becoming a master of marketing - and building ‘ownership’ of your customer niche These crucial topics - and the strategic recommendations of the White Paper itself - were the

During the panel session

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NEW FRONTIERS: OMAN

The discussion highlighted key insights on the Omani SME sector

The event incorporated a fantastic networking opportunity

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inspiration for launching a series of events in Oman, created by the partnership of presenting partner National Bank of Abu Dhabi (NBAD) and SME Advisor magazine. The umbrella brand of the events is ‘The Dynamics of Entrepreneurship’, and the series began on April 1st, with a day dedicated to round table panel discussions. There were two panels - one attended by the public sector and one by the private sector. In both cases, the panellists were figures widely regarded as key thought leaders in the SME and entrepreneurship space (please see complete roll-call of panellists below). Both panels took place in the Intercontinental Hotel, Muscat, and were ‘closed’ sessions, encouraging a very direct and animated style of interaction with real significance in moving the SME and entrepreneurship agendas forward. The essential debates and dialogues of the day focused on delivering opportunities in the four keynote sectors and spelling out how best entrepreneurs can manifest the required changes and turn them into commercial success. Oman as a new hub of entrepreneurship It is arguable that Oman is now one of the most critical arenas of debate in the SME space, representing the choices and prerogatives that characterise the region as a whole. It’s the fulcrum with the purest template of change from traditional business to vibrant, powerful economic growth - a growth empowered largely by the role of the SME. Yet - significantly - it’s also the nation where the gap between dialogue and practice is at its widest, with a very elevated and informed programme of recommendations from Government and public sector,

NEW FRONTIERS: OMAN

It is arguable that Oman is now one of the most critical arenas of debate in the SME space, representing the choices and prerogatives that characterise the region as a whole.

but an SME profile that is predominantly at the level of micro businesses. So, the question is how to close this gap and boost scale and performance by advising companies how to • Compete with international brands by pulling together a comprehensive understanding of the marketing essentials • Build the right infrastructure networks to bring a business to its public - embracing the priorities of distribution, packaging and retail relationships • Avail themselves of links with the public sector - ensuring the right quality benchmarks are in place and being able to win competitive tenders, secure in the knowledge that issues like Governance and risk management are properly in hand Two panels - and eight key verticals that surprised the industry The two panels were Moderated by Paul Godfrey, Senior Editor, SME Advisor and the interaction between the panellists - who were chosen to reflect a very balanced snapshot of the SME environment - led to an emphasis on topics that were not only surprising, but which very few pundits could possibly have predicted. In the public sector panel, the key verticals emerged as – • The need for actual management training, not entrepreneurship grooming as such. There was perceived to be a real lack of business and people management skills in the SME sector, along with a basic shortfall in pure business ‘know-how’. The panel believed this should be addressed at the secondary school level, thereby creating practicallyminded managers and business people. • The fact that the notion of ‘entrepreneurship’ actually didn’t mean anything in reality, and that teaching skills of this

kind was too nebulous to serve a useful purpose. Instead, it was felt that entrepreneurship was relative and related to particular industry sectors - i.e., being an entrepreneur in the manufacturing space required very different skills from entrepreneurship in e-commerce. So again, good entrepreneurship really required very focused vocational skillsets. • The way that setting up a business was so often derailed or slowed down by labour registration categories that had only the most ‘ad hoc’ fit to business realities. In fact, one of the panellists had her business so dramatically slowed up by having new staff registrations rejected that she had to close the business for a month. • The need for tendering procedures to be more widely publicised and SMEs made more aware of what the winning application would require. Several panellists believed that many SMEs fell wildly short of the typical skillsets required to work with big public organisations – and that there was a need for very specific upskilling. Indeed, it was felt that to begin with, there were not

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NEW FRONTIERS: OMAN

enough opportunities for public/ private sector partnership, and that this would be a critical tool of economic diversification.

the public sector has the power and energy to keep on leading the changes, not only with its cluster of visionary documents and White Papers, but with substantive business legislation.

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For the private sector panel, the main verticals were identified as – • The challenge of creating more transparent working practices and making audited accounts a feasible norm, even within family businesses and those which felt they were too small to be ‘on the radar’. • Recruitment issues - finding qualified people in practical areas such as electronics, welding, and engineering assembly. There were simply too many people with computer-based skills and not enough to execute the actual working activities of many types of business. Moreover, the Omanisation initiatives, with their high salary thresholds, were not always encouraging Omanis to come into the private sector and were leaving many industries - perhaps dangerously - in the hands of expats, with little hope of change. • Differentiation challenges. Very few Omani businesses had been able to build a successful and renowned brand, because they were simply not very adept at distinguishing themselves from so much of the competition. This was one reason why the likes of Starbucks has no locallysourced competitors - which as seen as a basic flaw in the way that marketing skills are taught, and also a key factor as to why so many SMEs remained at the micro level. • The size/growth factor. How could micro businesses possibly pay a meaningful role in working with the public sector, or become the ‘tiger’ businesses of the Omani economy? Business owners and directors were not being given the right tools to improve their business and its propensity for growth. This was seen as

one of the factors addressed so successfully in economies such as Singapore and Malaysia. Different perspectives, different voices Above all, the panel sessions showed that so often, SMEs are frustrated by the harsh realities of day to day business life, and find it hard to listen to the more optimistic messages coming from the public sector. This was even apparent in the style of dialogue generated around the table - very animated, speedy and forceful in the public sector session, more gritty and concerned in the private sector exchanges. This may result from the fact that Oman is a relative newcomer to the needs of economic diversification, and that in the near future we may see a keener and more attentive private sector, in the manner of Dubai, for example, with its 20-year dedication to a diversified agenda. Make no mistake, though, that the public sector has the power and energy to keep on leading the changes, not only with its cluster of visionary documents and White Papers, but with substantive business legislation. This level of aspiration is so strong that on several occasions during the day, public sector panellists rejected the dominance of the SE Asian role model, asking if there was any reason why Oman could not become, in the years ahead, its own global model for SME excellence and entrepreneurship.

For an online version, please visit: www.tradeandexportme.com/2015/04/ from-theory-to-practice-oman/

TRADE & GROWTH

Country focus:

Doing trade with Belgium Home to the EU headquarters, Belgium is a prolific trading nation that has created a niche for itself in the global marketplace. Its advanced transportation systems and central location within the European continent are strategic advantages that have contributed significantly to the country’s growth and overall development. SME Advisor speaks to the honourable HE Dominique Mineur, Ambassador of the Kingdom of Belgium in the UAE, who offers compelling insights…

Over the years, Belgium has evolved as a key economic and political hub. With strong trade ties with several major countries across the world, the nation has become a hotspot for business opportunities. The UAE, in particular, has maintained a long standing relationship with Belgium, working together for several years. Across their politics, constitution and economy, the two nations have similarities that run deep. According to HE Dominique Mineur, Ambassador of the Kingdom of Belgium in the UAE,

this is one of the main reasons behind the solid relations between the two countries. She believes that there are similarities across the board, with both economies based on openness to trade and serving as regional trade and transport hubs. Belgium’s population stands at 11 million, with the UAE at just over nine million. While the soaring desert heat may be in contrast to the Euro-hub’s often damp skies, economy-wise the two nations are very close. Belgium’s most recent GDP figures stood at

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TRADE & GROWTH

over 500 billion USD, versus its Middle East counterpart at around 400 billion USD. Looking back… The countries’ relationship, which spans back to the seventies, began to develop rapidly following the UAE’s independence. The first Ambassador of Belgium to the UAE was sent in 1978. HE Mineur says, “At that time, the Belgian Government felt it was important to have a presence in the Gulf nation. We recognised the similarities in our systems and saw

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mutual opportunities for bilateral relations across specific priority sectors.” Ever since, the bilateral economic relationship has yielded some impressive results in the import and export of precious metals and stone, machinery equipment, as well as base metals. Fostering trade ties “During the first nine months of 2014, Belgian exports to UAE saw an increase of 18 per cent, compared to the same period in 2013, and mounted to 2.6 billion

Euro which represents 33 per cent of total Belgian exports to Arab countries. Consequently, the UAE is the primary economic partner of Belgium in the Arab world. “On the other hand, when we compare relations of Belgium and other European countries with the Arab world, we can see that Belgium is by far the leading partner per capita,” HE Mineur adds. Belgium’s exchanges per capita in the Arab world for 2013 were 1,757 Euro versus the second ranking nation France at 824 Euro.

TRADE & GROWTH

Belgium is a sound destination for investments, thanks to an attractive business and fiscal environment, and given its designation as Europe’s political heart. HE Dominique Mineur, Ambassador of the Kingdom of Belgium in the UAE

With Belgium’s second biggest city - also the second largest petro-chemicals cluster in the world - the port of Antwerp is a major gateway in north and west Europe. Similarly, Dubai is the main maritime transport hub for the Middle Eastern market, and a major link between Asia and Europe. “The Port of Antwerp, along with the Ports of Zeebrugge, Gent and Liège, as well as high quality transport infrastructures make Belgium the best connected country in Europe and the most desirable location for logistics in Europe,” explains Ambassador Mineur. She cites the largest marine terminal and port operator in the Middle East, DP World, with its UAE portfolio including the flagship Jebel Ali Port, as a major investor in Antwerp and Liege. Belgium is a sound destination for investments, thanks to an attractive business and fiscal environment, and given its designation as Europe’s political heart. With its central geographical location, its welldeveloped transportation network and multicultural workforce, many companies choose Belgium as their gateway to the European market. Belgium has also been a key supplier to the Gulf construction sector. Its customers’ projects include many iconic buildings such as the Emirates Palace in Abu Dhabi and the Burj Khalifa in Dubai (a joint venture with two other companies). Belgian dredging companies were utilised for heavy land recovery works for land reclamation projects, including the Palm Jumeirah and the artificial islands for Abu Dhabi’s offshore oilfields, SARB. Future opportunities HE Mineur points out that the two nations are looking at

opportunities to work more closely in the future, particularly in areas of sustainable technologies and healthcare. Belgium has been at the forefront of Europe’s ambition to develop healthcare and green energy technologies, while the UAE also has ambitious projects planned in these areas. “There are many opportunities in this sector: development of solar technologies, wind farms and energy-efficient buildings,” she adds. In the World Economic Forum’s competitiveness report, Belgium consistently ranks in the top three nations for healthcare. The demand for modern hospitals and specialist medical equipment and services is expected to rise exponentially in the GCC and the UAE in particular, in the near future. Some estimates show that by 2050, the GCC will require an additional 140,000 hospital beds, and the associated high-tech medical equipment. Considering the UAE’s healthcare needs and its ambition to provide high quality care for its population, the two countries see potential for further development within this sector. Ties between the two nations go beyond commerce, with cultural activities connecting both societies. The Queen Elisabeth Musical College has a cooperation agreement with the Abu Dhabi Music and Arts Foundation. Belgium’s operatic and music talent also frequently appear in prestigious performing arts venues across the Emirates.

For an online version, please visit: www.tradeandexportme.com/2015/04/ doing-trade-in-belgium/

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VIP INTERVIEW

Flying high

When addressing the aviation industry, what usually comes to mind is passenger flights or cargo services. However, another important segment contributing to the phenomenal growth of this leading sector is the flight support services. RamJet Aviation, based at the world-class RAK Free Trade Zone, shares its journey to success as a promising SME in this field.

How did RamJet Aviation come about?

Can you tell us about your portfolio of services?

RamJet Aviation was launched nearly a decade ago, as a small business equipped with a vision, a small office and lots of dedication. We’ve come a long way since our inception, surpassing new milestones with every passing day. Our timeline showcases our progression from a small company to one of the biggest and renowned service providers in the region for European, GCC, Africa and East Asian flights.

We provide state-of-the-art worldwide aviation support services to our clients. Whether it’s assistance in seeking permits for a private flight or extensive services from ground handling to hotel accommodation for a chartered business flight spanning several legs of journey, RamJet Aviation is a one-stopshop provider. We offer support with the following services to both private and commercial flights:

• Overflight clearances, traffic rights and landing permits • Ground handling services • Fuelling • Hotel accommodation • Catering services • Charter services • Cargo charter services

How can potential clients go about acquiring your services? Please give us a quick overview of how the process works.

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VIP INTERVIEW

This business is done on trust basis and mostly propagated by word of mouth. We are very easy to access as we have a 24-hour operation team who can take care of any “on the spot requests” and deliver excellent support. In just three steps – e-mail us, get acknowledged and fly. Unlike other support companies, at RamJet Aviation our modusoperandi is pretty simple: Just get the job done! Instead of shelving the responsibility of getting the job done to other partners and partially to the client itself, we take responsibility to ensure that our customer requirements are properly fulfilled in a timely manner.

How is the competition in this region? What gives you an edge over your competitors? In today’s fiercely competitive markets, it is crucial to provide topnotch quality services at affordable prices. This is exactly what we focus on doing and this is what gives a competitive edge. I should also add that honesty and integrity are two major factors while doing business in this industry; it’s extremely important to build a relationship of mutual trust with your clients.

Are there any significant bottlenecks that you faced when you were starting up your business?

In today’s fiercely competitive markets, it is crucial to provide topnotch quality services at affordable prices. www.tradeandexportme.com

We were very fortunate to have started our business in Ras Al Khaimah under the patronage of RAK Free Trade Zone. The authorities helped us at every step of the way ensuring that it was an easy, smooth setup, which in turn allowed us to concentrate on our core business activities.

Rules and regulations vary from one region to another. When dealing with different markets how do you ensure that you are adhering to the protocols in these areas? In the aviation industry, it is crucial to keep abreast of what is happening around the world. Our team is continually we are up to date with rules and regulations. Thankfully we also have brilliant partners around the world who ensure that we are well informed.

How do you ensure that you are up to the latest standards of the aviation industry? We have always worked to being the best in the industry. As such we have participated in all major aviation industry shows to keep track on all that is new in the industry. We have and continue to attend workshops that help us stay up to date with this every changing industry.

How do you ensure that your employees are well-equipped with the skills and knowledge that will help you achieve your company’s bottom line?

With an increase in business outreach and flight operations, Team RamJet’s expansion was nonetheless inevitable. The company ensures to broaden its operations and line of services to its growing list of clientele. Along with addition of newer team members the company has also worked on its infrastructure employing the latest in business processes to manage all foreseen

VIP INTERVIEW

the management team at RAK FTZ is very warm and hospitable. They have always been very supportive and understanding.

We began operations in RAK FTZ 15 years ago. RAK FTZ is very cost effective when it comes to having your own office space. This simply translates to lower overhead costs which our customers can see being reflected on the fees we charge them. So, we are able to match our quality service with affordable prices. In addition, the management team at RAK FTZ is very warm and hospitable. They have always been very supportive and understanding.

What are your plans for future growth? services thus ensuring even higher quality of service provision to all clients. The company also maintains a stringent policy when it comes to quality assurance and invests heavily in making sure its team is always well prepared and up to date on variations in industry standards. RamJet invests heavily in the training and professional development of its staff.

What kind of ancillary tracking services do you offer to clients?

We met with... Issam Sultan, General Manager, RamJet Aero, spent the last seventeen years working in the aviation consultancy business. He has successfully coordinated countless flights world-wide for governments state officials, royal dignitaries, fortune 500 CEOs, and continues to help out with numerous charity flights. Issam also has a Master’s Degree in Business Administration from University of Bolton.

We will continue to expand our network of agents world-wide and strengthen our reach into the industry.

What advice would you give to SMEs in this region? Don’t be afraid to start small as long as you have a solid vision. I believe this has been the underlying principle behind the success of not just RAKFTZ but the entire UAE and look how far they have come!

Our clients are constantly updated with the progress of their flight operations – from start to finish. In fact, they can enjoy regular tracking with a click of a button. Of course, our dynamic team of experts are also available 24/7 via phone to manage client updates and monitor operations.

What attracted to opening your business at RAK FTZ?

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LEGAL

Intellectual Property considerations in Saudi Arabia

The Kingdom of Saudi Arabia is the largest Arabic gulf state in terms of population and GDP. It is therefore a key market for businesses entering the Middle East region. However, it can pose significant challenges in terms of doing business. One particular issue that has been a major roadblock for new companies is the protection of Intellectual Property (IP) rights. In the following feature, experts from Clyde & Co. assess the progress and provide an overview of this key jurisdiction.

Saudi Arabia is one of the most conservative countries in the world. Its legal system is based on Sharia principles and there is no system of binding precedent. Issues can arise where the rights being relied upon are unregistered or where registrations are not held in Saudi Arabia. In such cases the Courts may question whether unregistered rights can “belong” to the owner. We look further below into issues which IP owners commonly face in Saudi Arabia. In our experience, it is possible for IP rights to be created, recognised and protected in Saudi Arabia, thereby unlocking the potential to one of the most important markets in the region. Trade mark protection Trade mark registrations are obtained through the Trade Mark Office which forms part of the Ministry of Commerce and Industry (MOCI) in Riyadh. An in-house computer system was recently developed so that applications are

filed and published online. This has significantly expedited the timeline for registering routine applications, which can proceed to registration in under nine months. Some products and services cannot be applied for as they conflict with local cultural sensitivities, for example alcohol related products and services. Saudi operates a single class filing system and uses an adapted version of the 10th Edition of the Nice Classification, which means applicants are restricted to pre-approved terms only. This can pose significant issues as everyday terms such as “retail services” or “streaming services” are not included in the acceptable list. Careful thought and knowledge of what is acceptable in Saudi Arabia is required in order to obtain protection which is suitable for the needs of the business. Unlike many other countries, opposition proceedings against trade mark applications are filed before an administrative court (the Board of Grievances). Proceedings are generally

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LEGAL

brought by the opponent against the Trade Mark Office rather than against the applicant. Our ‘top tips’ for registering trade marks in Saudi Arabia are: 1. Search – pre-filing searches are recommended, a straight refusal will be issued if a conflicting mark is identified on examination; 2. Register – registration is key and we recommend filing early, before speaking with local partners; 3. Al Arabiya – Arabic is the main language of Saudi Arabia. It is therefore important to develop, protect and use Arabic branding and not rely on an English-only approach; 4. Goods/services – some are not permitted (e.g. alcohol) so consider your options to protect your interests; 5. Class headings – we advise against using class headings unless the products or services of interest are specifically mentioned (as this may impact enforcement options later);

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6. The mark – objections may be raised on moral grounds to marks which are easily registered elsewhere. The mark may need to be changed in order to be used and registered in Saudi; 7. Marketing – for the same reason some rights holders have to change their marketing campaigns; 8. Consistency – ensure the Arabic name and address used is consistent with what has been used before, or you may have a rejection based on your own rights; 9. Maintenance – update names and addresses for registrations as they occur and not on renewal. Supporting documents such as Powers of Attorneys are needed for such actions, so it can be a false economy to pull together the documentation required at the time of renewal; and 10. Dates - the official calendar in the Kingdom is the Hijiri Calendar. On average, a Hijiri year is 11 days shorter than a Gregorian year. Work

from the Hijiri calendar to avoid missing renewal deadlines. Enforcing IP rights A common question asked is: “Do enforcement actions take place?” We can confirm that enforcement actions do take place, though much depends on the rights the client has in the country. In recent times, we have had successful seizures through both Customs and administrative bodies in Saudi Arabia for tens of thousands of infringing products. So, what options are available? For brand owners with registrations in Saudi, it is relatively straightforward to bring an enforcement action in relation to counterfeit goods at a retail and wholesale level and for border infringements. We set out below the four main options for bringing enforcement action against infringers in Saudi: 1. Administrative complaints The Ministry of Commerce and

LEGAL

Saudi Arabia has implemented national legislation ratifying the GCC Patent Law.

Industry (MOCI) in Saudi accepts complaints in relation to routine counterfeit matters and it has authority to raid both retail outlets and warehouses. Complaints need to be filed with the office for the relevant province where the infringing goods are identified. Once a complaint has been filed, the MOCI will send inspectors to raid the retail outlets to seize and destroy any infringing products. Traders dealing in infringing goods will also receive a nominal fine and may be required to sign an undertaking in favour of the MOCI. 2. Criminal complaint Although it is possible to file a criminal complaint, the police are only likely to pursue the trader when large quantities of infringing products are involved. The procedure for conducting a criminal raid will depend on the province, although, generally, the complaint must be filed with the local Public Prosecutor. The Public Prosecutor will decide whether to accept the complaint and will then co-ordinate the raid with the relevant police. 3. Civil claim Civil claims are usually more appropriate for non-routine cases, for example in trade dress infringements, lookalike cases or where there has been a previous distribution or agency agreement between the parties. Civil claims are filed with the Board of Grievances. All Court proceedings are conducted in Arabic. Pleadings and evidence must be submitted in Arabic. The cost of civil proceedings is high as a party’s legal costs will largely be non-recoverable, as usually only nominal legal costs are awarded. It is also possible to claim damages, which must be evidenced and calculated on the basis of compensation to the loss caused to the trade mark owner. However, in practice, the Court may only be prepared to award nominal damages and there can be difficulty in enforcing such orders.

4. Customs complaint A complaint can be filed with Customs requesting that infringing products being imported be seized and destroyed. The trade mark owner must hold trade mark registrations in Saudi Arabia for the relevant trade mark being infringed, but it is not required to record registrations with Customs. If suspected counterfeit goods are detained by Customs, they will inform the brand owner’s local representative. The brand owner will usually be given 10 days to file a complaint with Customs.

Patents Patents are protected in Saudi Arabia under Law of Patents, Layout-Designs of Integrated Circuits, Plant Varieties, and Industrial Designs (promulgated by Royal Decree No. M/27 of 29/5/1425H (July 17, 2004)) (the Patent Law). The Patent Law provides for the protection of patents, plant varieties, industrial designs, and layout designs of integrated circuits but not utility models. An invention in Saudi Arabia can be protected by way of a patent filed: • at the General Directorate of Patents at King Abdulaziz City of Science and Technology (KACST) either as a stand-alone direct application or via the Patent Cooperation Treaty (PCT); • with the Gulf Cooperation Council (GCC) Patent Office either as a stand-alone direct application or within a 12 month priority period which is provided for under the GCC Patent Law. The GCC Patent Office registers patents covering the six member states of the GCC being the Saudi Arabia, the UAE, Qatar, Oman, Kuwait and Bahrain. Saudi Arabia has implemented national legislation ratifying the GCC Patent Law. However, this legislation does not deal with the enforcement of GCC patents in Saudi Arabia, despite the GCC Patent Law providing that enforcement issues are a matter for national legislation. As a result, there is no clear regime for enforcing patents granted by the GCC Patent Office in Saudi Arabia.

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LEGAL

Our ‘top tip’ for filing patents in Saudi Arabia is to ensure that patent translations are undertaken at least one month before the filing date.

A question commonly asked is surrounding software and patents. In Saudi Arabia, computer programs as such are not patentable although, if the relevant criteria are met, software may be given copyright protection. In addition, computer-related inventions (as opposed to software alone) are potentially patentable in Saudi Arabia. Patents in Saudi Arabia must be filed in Arabic, it is not possible to file the Arabic translation late. Our ‘top tip’ for filing patents in Saudi Arabia is to ensure that patent translations are undertaken at least one month before the filing date. Copyright There are a number of myths about copyright protection in Saudi Arabia, such as “it is not possible for non-Saudi nationals/foreign companies to benefit from copyright protection”. This is not the case. The Kingdom is party to the Berne Convention which sets out basic principles including “national treatment” and the “automatic” protection of copyright works. In order to successfully enforce copyright in the Kingdom, it is important to be able to show a chain of ownership from the author of the work to the owner (i.e. in the form of an assignment agreement which complies with the Royal Decree No. M/41 (the Copyright Law)). As a general rule, copyright vests automatically in the author of a work on creation, until copyright is assigned in accordance with the provisions of the Copyright Law. There are exceptions for joint and collective works, i.e. works created by a group of people. It is important to note that moral rights will remain with the author. It is often (incorrectly) assumed that copyright will automatically be owned by the party who commissioned the works to be created. However, unlike the position in the US (with the ‘works for hire’ concept), copyright in commissioned works will be retained by the author under the Copyright Law. Accordingly, in the absence of IP provisions in commissioning agreements, the contractor will usually

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retain copyright in the deliverables and the commissioner may have no right to use, copy or amend the works. Another issue worth highlighting is that the Copyright Law does not contain a provision which states that copyright in works created by employees during the course of their employment will be automatically owned by their employers. Accordingly, companies with works being created within the Kingdom should ensure that assignment agreements are signed by the individuals that create the works to ensure that copyright is effectively transferred to the companies (and not retained by individual author). In order for an assignment of copyright to be valid under the provisions of the Copyright Law, it must be in writing and it must specify the place and duration of the assignment. Taking steps to put in place a valid chain of ownership will ensure that companies are able to use, exploit and enforce copyright in the Kingdom.

Further information If you would like further information on any issue raised in this update please contact: Rob Deans, Head of IP, Clyde & Co Jon Parker, Head of Trade Marks, Clyde & Co Harriet Balloch, Senior Associate, Clyde & Co Rachel Armstrong, Associate, Clyde & Co Clyde & Co LLP PO Box 7001 Level 15, Rolex Tower Sheikh Zayed Road Dubai, United Arab Emirates T: +971 4 384 4000 F: +971 4 384 4004 Clyde & Co accepts no responsibility for loss occasioned to any person acting or refraining from acting as a result of material contained in this summary. www.clydeco.com

For an online version, please visit: www.tradeandexportme.com/2015/04/ipconsiderations-in-saudi-arabia/

EVENT REVIEW

A day marked in history

Set in the luxurious Etihad Towers, a landmark debate called ‘Masterclass – the Abu Dhabi Economic Vision 2030’ brought together an extraordinary cluster of world-class economists, captains of industry and key Government decisionmakers. SME Advisor brings you exclusive insights…

During the high-profile event

The Abu Dhabi Economic Vision 2030 is arguably the most comprehensive and far-reaching strategic plan in the region. The document, which is often referred to as the holy grail of sustainable growth and development, crystallises the critical role of Public-Private Partnerships and highlights opportunities in key sectors such as Infrastructure, IT, Healthcare and Manufacturing. SMEs and entrepreneurs are an integral part of this strategic agenda, acting as catalysts to a self-funding development model, diversification and growth in a climate of lower oil prices. But, how can an SME align itself

with the underlying principles of this document? What are the practical steps in building a business that can fully maximise the opportunities of Vision 2030? Masterclass: the Abu Dhabi Economic Vision 2030, organised by SME Advisor in association with National Bank of Abu Dhabi (NBAD), was a forum dedicated to exploring these critical areas and providing expert advice on the different facets of Vision 2030. With a room packed out with over 125 SME owners, directors and senior executives, the VIP panel debate examined how – • SMEs can reap practical benefits even in the early stages of the 2030 turnaround

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EVENT REVIEW

The 2030 Vision is already proving to be a key catalyst in encouraging full and proper integration between public and private sectors. The event attracted 125 SME owners and senior directors

The fantastic line-up of experts

• The emphasis needs to be ’work smarter, not harder’ - and SMEs will be given the tools and the skills training to do just that • The 2030 Vision is already proving to be a key catalyst in encouraging full and proper integration between public and private sectors - and it’s SMEs who’ll benefit most A powerful dialogue An important aspect that set this event apart from the others was the calibre of people it managed to get around the table. The session was Moderated by Paul Godfrey, Group Director of Editorial, CPI Media Group, and the top team of panellists included -

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• Rudolph Lohmeyer, Leader, Global Business Policy Council, AT Kearney and formerly, Senior Advisor, US Department of State • Yogesh Mehta, CEO, Petrochem • Dr. Dalia Abu Samra-Rohte, CEO, AHK German-Emirati Joint Council, Industry and Commerce, Abu Dhabi • Dr. Anil Khurana, Partner, PwC • Prof. Abdullah Abonamah, CEO, The UAE Academy • Ahsan Ali, Director, Credit, Khalifa Fund for Enterprise Development • Nina Curley, Managing Director, Flat6Labs • Nilanjan Ray, Managing Director, Global Commercial Banking, NBAD

• Austin Rudman, Partner and Financial Services Leader, KPMG • Dr. Abdelrahim Elrayah Mahmoud, Business and Corporate Development Consultant, Abu Dhabi Chamber of Commerce and Industry • Moza Obaid Al Nasseri, Acting COO, Khalifa Fund for Enterprise Development These experts touched on a raft of topics including getting finance, implementing corporate governance, improving trade links, fostering Public-Private Partnerships and developing human capital. However, three main themes emerged from the

EVENT REVIEW

The ‘Masterclass’ round table proved a powerful forum for helping SMEs discover the new world of opportunity that the Abu Dhabi Economic Vision is already opening up.

SME Advisor thanks its sponsors for their support:

ground-breaking discussion. They were – a) Focusing on diversification – In a climate of lower oil prices, businesses will be seen diversifying to alternative sectors such as Advanced Manufacturing, IT, Healthcare and Education. Furthermore, the adoption of smart technology across these industry verticals will revolutionise the business landscape. This will not only help boost productivity, but also lower costs and increase competitiveness. b) Funding continues to be a critical factor – Experts at the round table argued that bank financing may not necessarily be the best source of capital for early-stage businesses and entrepreneurs. Private capital will play an increasingly important role in supporting start-ups; particularly sources such VCs, angel investors, peer to peer lending and accelerator programmes. Rudolph Lohmeyer remarked: “In the changing economic environment, capital is still very much available, but SMEs and start-ups will have to be more disciplined in how they design and secure finance. This discipline will focus on iteration, future-driven value propositions and connection to global value chains.” c) Leveraging the power of PublicPrivate Partnerships (PPPs) – The last few years have seen PPPs emerge as a significant instrument for economic development and garner a lot of attention. Experts around the table, however, expressed their concern over PPPs being limited to a financial arrangement between the public and private sectors. They emphasised the need for knowledge exchange i.e. working together by sharing assets, expertise, tendering opportunities, best practices and so on.

The detailed findings of the discussion will be released in a comprehensive summary report, which will be available exclusively on SME Advisor’s website. Leading by example The day also featured success stories from SMEs who have leveraged effective results precisely by using the approaches and strategies outlined in the Abu Dhabi Economic Vision 2030. Samer Hani, General Manager – Business Development, CLEANCO; Souad M. Al Hosani, President, Nexus Business Services; and Abdulrahman Alblooshi, Founder and Owner, Qirat Tea Trading; were the three exemplary entrepreneurs who shared their experiences with the audience in 20 minute presentations. SME Advisor and NBAD presented these entrepreneurs with honorary certificates for their outstanding performance and undying commitment to the SME community. A momentous occasion The ‘Masterclass’ round table proved a powerful forum for helping SMEs discover the new world of opportunity that the Abu Dhabi Economic Vision is already opening up and its practical benefits for thousands of local business owners. While the event managed to spark an interesting debate with several take away points for the SMEs in attendance, there was one important conclusion: as the economic scene continues to change and we enter a time of sustained lower oil prices, the Abu Dhabi Economic Vision 2030 has adapted and transformed its remit, creating a fresh, relevant and highly practical blueprint for today’s business culture.

For an online version, please visit: www.tradeandexportme.com/2015/04/aday-marked-in-history/