EMPEA Guidelines – 8
8. Stable and fair framework for property rights
A stable framework for property rights is pivotal to investment in privately held companies and assets, therefore investors seek a framework that provides: (i) an accessible and easily searchable means of (a) recording title to real property, mortgages, liens and other security interests and (b) obtaining basic information concerning local companies, (ii) a cost-effective means of transferring title to real property and shares in local companies and registering a security interest, and (iii) the protection of intellectual property rights.
In addition to a general acceptance of the legitimacy of the system of property rights at the highest levels of government, investors seek a framework that provides for complete and accurate information concerning property and securing title, including:
8.1 – Clarity of property rights and efficient and prompt property rights enforcement
- Clarity of property rights and of co-ownership/shareholders’ rights; and a degree of formality that encourages legal clarity and reduces the scope for disputes (e.g., requirement of a written instrument, or involvement of a notary);
- Enforcement of property and co-owners’/shareholders’ rights, which should be efficient, prompt and cost-effective;
8.2 – Effective systems for property registration
- An effective system of property registration that is accessible and/or public, at a cost and in a timescale that does not discourage transactions, and a similar system for providing basic information concerning local companies, limited partnerships and other legal entities;
- Reasonable and transparent costs of registering/transferring property, including stamp duty, registration fees and taxes;
8.3 – Security interests
- Clarity with respect to the rights of the holders of security and a degree of ease in enforcing security interests; and
- The ability of an offshore lender to secure its loans using local collateral, and have the ability to perfect and enforce that security interest in a manner that is equivalent to the means afforded to domestic lenders.
8.4 – Intellectual property rights
- A stable and fair system of intellectual property rights that includes a high level of protection, efficiency of the registration process and an enforcement and dispute settlement mechanism for intellectual property;
- Signatory status of the country to the WTO TRIPs (Trade-Related aspects of Intellectual Property rights) agreement and national legislation for implementation¹; and,
- Signatory status of the country to the Patent Co-operation Treaty for Inventions, the Madrid system for trademarks and Hague system for industrial design.
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