Northern Irelanda smart place to invest

The Giant’s Causeway, Co. Antrim2

Having worked closely with international businesses investing in Northern Ireland for over 30 years, we recognise that most businesses find it helpful to have an overview of the legal landscape in Northern Ireland before they finalise their investment plans. Many businesses initially have similar queries relating to corporate, property and employment law issues in particular.

In response to this, and in view of our close working relationship with Invest Northern Ireland, we have compiled this brochure to give a high level introduction to some of the key legal topics of interest to businesses investing in, or relocating to, Northern Ireland.

We hope that you find this information useful and we would of course be delighted to help you address any particular queries that you may have in relation to your business. We hope that you will take a moment to read the section ‘About Tughans’ on page 6, which sets out our range of services and core values. More detailed guidance notes are available for specific sectors upon request.

We wish you every success with your business plans in Northern Ireland.

Phyllis Agnew, Senior Partner

T: +44 (0)28 9055 3333

E: phyllis.agnew@tughans.com

Introduction

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Belfast City Hall4

Introduction

6 About Tughans

8 Corporate Structures

• PrivateLimitedCompanies

• UKEstablishments

• Agents/Distributors

12 Real Estate

• BuyingorSelling

• PlanningPermission

• CommercialLeases

14 Employment

• DuringEmployment(MinimumHourly Rates,TradeUnions,Protectionof Employees, Fair Employment, Tax)

• Post-Employment(Protectionfor Employers, Restrictive Covenants, GardenLeave,Confidentiality)

• HealthandSafety

• ResidenceandEmploymentPermits

18 Telecommunications and Data Protection

• NorthernIrishTelecommunications Market

• ElectronicCommerce

• DataProtection

19 Intellectual Property Rights

• Patents

• TradeMarks

• PassingOff

• Copyright

• Designs

• ConfidentialInformation

• NorthernIrishCourtsforIPDisputes

22 Energy

• Deregulation

• GasandElectricityMarkets

• RenewableEnergy

• GovernmentIncentives

• TheFuture

24 Environmental and Waste Law

25 Banking and Finance

Contents

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Click on a listing to go to that page

About Tughans

Tughans is a leading Northern Ireland law firm. Pleasevisitourwebsitewww.tughans.comforfurther information on the firm and our practice areas.

Our Core Values

We are committed to service excellence.

Wearehard-working,knowledgeable,assertiveand focused on the key issues that are important for your business.

What others say about us

We are ranked in Tier 1 across many specialist areas by the leading legal directories, Chambers UK,ChambersEuropeand,intheUKLegal500where more of our lawyers are independently recognised in their field than any other firm in Northern Ireland.

Examples of recent commentary:

“A quality legal practice with some very knowledgeable and commercially savvy lawyers who provide sterling support to the company.” Chambers Europe 2013

“A large firm with a lot of expertise.” The practice offers “a high degree of professionalism and strong legal advice.” Chambers UK 2013

“The culture of Tughans as a firm is very positive and impressive. They are professional, informed and easy to work with.” Chambers UK 2013

Practice Areas

Contact Details

For further information on any of the aspects outlined in this brochure regarding setting up your business in Northern Ireland, please contact the individuals below.

Phyllis Agnew, Senior Partner Ian Coulter, Managing Partner T: +44 (0)28 9055 3333 T: +44 (0)28 9055 3310 E: phyllis.agnew@tughans.com E: ian.coulter@tughans.com

Banking and Finance Environment and Planning Pensions

Commercial Contracts Foreign Direct Investment Private Client

Commercial Litigation Health and Safety Procurement

Company Secretarial Services Healthcare Projects

Construction Insolvency Public Sector

Corporate Insurance Real Estate

Employment Intellectual Property Technology

Energy and Natural Resources Mergers and Acquisitions Venture Capital

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TughansPartners

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Private Limited Companies

• Aprivatecompanylimitedbysharesisthe most common legal structure used by foreign businesses investing in Northern Ireland. Onceallincorporationdetailsareavailableacompany may be incorporated in as little as 24hoursusingtheUKCompaniesHousewebincorporation process.

• TobeincorporatedinNorthernIreland,acompany must have a minimum of one director (if there is only one director it must be a person, not a corporate director) and one shareholder (this may be a corporate shareholder or a person). There is no limit to the number of directors or shareholders that a private limited company may have but its shares cannot be offered to the general public to purchase.

• Thereisnorequirementforanydirectorsor shareholders to be resident in Northern Ireland but if none of the directors are resident in Northern Ireland an address for service in Northern Ireland must be provided (this can be the same as the company’s registered office address).

• AcompanyincorporatedinNorthernIrelandmust have a registered office address located within Northern Ireland.

• Thereisnorequirementtohaveacompanysecretary but one may be appointed if desired.

• Acompanynameendingwiththeword“Limited”or“Ltd”isrequiredforincorporationofa private limited company. Subject to some

exceptions, a company is free to choose any name as long as it is not too similar to another companyontheUKregisteranddoesnotcontain any words that are deemed sensitive by Companies Registry (for example the word “holdings” can only be used where the company is in fact a holding company of one or more subsidiaries).

• AcompanyincorporatedinNorthernIrelandisrecognisedasaUKcompanyandisfreetotradethroughouttheUKwithouthavingtoregister any additional places of business in England, Wales or Scotland.

• AcompanyincorporatedinNorthernIrelandis subject to the same primary legislation (theCompaniesAct2006)asallotherUKcompanies. This means that, for the most part, legislation relating to corporate governance, directors’ duties, shareholder rights etc. is harmonisedthroughouttheUK.

• AcompanyincorporatedinNorthernIrelandissubjecttotheUKtaxregime.

• ThemainconstitutionaldocumentofaNorthern Irish registered company is the Articles of Association. Model Articles of Association in a basic form prescribed in the Companies Act 2006, may be registered upon incorporation. Most companies move to adopt more bespoke Articles of Association by passing a shareholder resolution, particularly upon taking in any equity investment, or where there are multiple shareholders or only one director.

Corporate Structures

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• ANorthernIrishregisteredcompanymustcomply with certain statutory filing obligations byfilingprescribedreturnstotheUKCompanies Registry. These filings are public documents. Filing requirements include annual returns detailing director and shareholder details and annual accounts in a format that is compliant with the companies legislation.

UK Establishments

• AnoverseascompanywillhaveaUKestablishment if it is trading in Northern Ireland and has a physical presence in Northern Ireland, such as a place of business or a branch, through which it carries on business.

• Within1monthofopeningaUKestablishment an overseas company must register with Companies House. Filing requirementsforacompany’sfirstUKestablishment include copies of constitutional documents (certified) and its latest set of accounts.

• Changestotheoriginalinformationsuppliedto Companies House should be notified, including changes to directors, secretaries, the corporate or alternative name registered in the UKandconstitution.

• AnoverseascompanywithaUKestablishment is usually required to file some form of accounting documents at Companies House. The format depends on whether the company is required to prepare and disclose

accounting documents under its parent law and if it is an EEA company (a company governed by the law of a country or territory in the European Economic Area).

• Ifacompanyisnotrequiredtofileaccountsunder its parent law it is still under a duty to prepare, sign and deliver accounts to Companies House.

• AnoverseascompanywithaUKestablishment must state on all business letters, order forms and websites that are usedtocarryonbusinessintheUK:

- thecompany’sname;

- wheretheestablishmentisregistered;and

- itsregisterednumber.

• Thecharactersmustbevisibletothenakedeye and additional information is required for companies registered outside the EEA.

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Agents And Distributors

• Manycompaniesusearesalechanneltoselltheirgoodsand/orserviceswithinoroutside Northern Ireland.

• Thereareanumberofimportant distinctions between an agent and a distributor in Northern Irish law. While there is no codified definition of an agent, and regardless of the nominal title used in any agreement, the Northern Irish courts will look at certain criteria in deciding whether a reseller is an agent. These criteria include:

- levelofrisk(intermsofownershipofgoods andcreditrisk)assumedbythereseller;

- levelofcontrolexercisedoveractivitiesof thereseller;and

- controlofthepriceofgoods/services.

• TheEUCommercialAgentsDirectiveappliestoallself-employedagentsthathavecontinuing authority on behalf of the principal andthatarebasedandsellgoodsintheEU,regardless of the location of the principal. ThisDirectivesetsoutanumberofimportantobligations for companies using agents to sell goods (it does not apply to the sale of services)intheEU.Notably,theagenthasthe right to receive compensation in certain circumstances if the agency is terminated. It is not possible to contract out of a number of obligationsundertheDirective.

• DistributionagreementsaresubjecttoboththeEUandNorthernIrishcompetitionlaw regimes. If a distribution agreement does not comply with the relevant competition law regime, it may be unenforceable. It is generally advisable to consult with a specialist solicitor while negotiating and before finalising any distribution or agency agreement, and even standard-formagreementsshouldbecheckedto ensure their enforceability.

Corporate Structures continued

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11Titanic Belfast

Buying Or Selling

• Ingeneral,propertyinNorthernIrelandisacquiredby(i)buyingitoutright;(ii)leasingit; or (iii) buying the remainder of the terms of an existing lease.

• Dependingonthenatureoftheinterest,the owner will have different rights and duties in relation to the land. It is not unusual for one piece of land to have several interests of different kinds, owned by different people at the same time, e.g. a landlord, a tenant and a sub-tenant.

• NorthernIrelandoperatesalandregistrationsystem where a person’s interest in property is registered on a public register. This ensures that an owner’s interest in property is documented and protected to a certain degree.

• Itisimportanttoconsultasolicitorassoonas a suitable property has been identified so that appropriate searches and checks can be carried out. In the case of an existing building, a surveyor or engineer should also inspect the building at an early stage to ensure it is free from costly defects.

• TosellapropertyinNorthernIrelandtheparties enter into a detailed written contract to transfer the interest in the property from the seller to the buyer. The solicitor for the buyer will investigate the title and the planning status of the property to ensure that it is in order. Any problems with the title generally follow the property and so become the responsibility of the buyer, including environmental issues, secured liabilities or planning issues, so it is important to have such matters identified at the outset, allowing them to be properly dealt with.

• Ifafinancialinstitutionisprovidingfinanceforthe purchase of property, the property itself will usually be the security for the loan. The financial institution will usually require that its own solicitor checks the title to the property, but may rely on a certificate from the buyer’s solicitor.

• Thereisoftenadepositof10%paidonthesigning of the contract, but this is a matter for commercial negotiation. The balance is paid on completion, which usually takes place a short period later or once any conditions, such as planning or building works, have been satisfied.

• Whenbuyingproperty,thebuyerpaysstamp duty land tax, a tax based on the value of the transaction. At present, for commercial property, the rates for acquisitions are as follows:(i)upto£150,000–zero;(ii)over£150,000to£250,000-1%;(iii)over£250,000to£500,000–3%;and(iv)over£500,000–4%with the tax generally payable within 30 days of completion.

• Thereisnorestrictiononaforeignnationalor company purchasing or leasing property.

Planning Permission

• Planningpermissionisrequiredbeforean owner can develop buildings or land, or materially change their existing use. Applications are made to the local planning authority.

• Certainareashavedesignatedzoning.Whereplanning applications are made in respect of such areas, they would generally be favourably received if the proposed use is in accordance with the plan.

Real Estate

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Commercial Leases

• Therentpayableforcommercialpropertyin Northern Ireland is usually quoted on a net basis, i.e. rent quoted per square foot or square metre will usually exclude toilets, columns, radiators, etc. Several other European countries measure on a gross basis.

• Inpractice,commercialleasesaremostcommonlygrantedfortermsof5-25yearsalthough, at present, shorter terms or break options every five years are common. There is no automatic right to “break” the lease, although this is a matter for negotiation between the landlord and the tenant.

• Rentreviewsnormallyoccuratfiveyearlyintervals and are generally upwards only, although some tenants are starting to get upwards or downwards reviews agreed with landlords.

• Stampdutylandtaxisalsopayableonthecreation of a lease. It is calculated using a

formula based on the level of rent and the length of the term which produces a figure known as the net present value. If this figure is up to £150,000notaxispayable;over£150,000itis1%ofthevaluethatexceeds£150,000.

• Theoccupierisgenerallyliableformunicipalrates unless an inclusive deal is reached with the landlord.

• TheremaybeaVATchargeonrentspayable under the lease, paid by the tenant, but usually recoverable where the tenant is registered for VAT and has full VAT recovery.

• Agreementsforleaseareseparatecontractsthat landlords and tenants enter into prior to completing a new lease, if the grant of the lease is conditional upon issues such as planning or building works etc. Agreements for lease can also be used to document capital contributions paid by landlords to tenants by way of an inducementortoassistwithinitialfit-outcosts.

The Waterfront Hall, Belfast

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During Employment

Minimum Hourly Rates

• Nationalminimumhourlyratesapplyforworkers aged 21 and over, aged between 18 and 20 (inclusive), under 18, and for apprentices. The national minimum applies to virtually all employeeswhetherfull-timeorpart-time,temporary or casual. These rates are reviewed bi-annuallyinAprilandOctobereachyear.

Trade Unions

• EveryemployeeinNorthernIrelandhasthe right to join a trade union but trade union membershipisnotcompulsory.UndertheIndustrialRelations(NI)Order1992trade unions can apply to the Industrial Court for recognition by an employer. If successful, the trade union may be recognised for collective bargaining relating to pay, holidays and hours.

Protection Of Employees

• IncommonwithmostEuropeancountries,Northern Ireland has implemented European legislation(EUDirectives)thatgivescertain basic rights to employees. However, Northern Ireland still has its own unique domestic law that is based on legislation and decisions of the courts. The protections enjoyed by employees include:

– right to a written statement of the basic termsofhis/heremployment;

– protection against unfair dismissal after one year’sservice;

– minimumholidays(5.6workingweeks);

– protection against discrimination on grounds of race, gender, pregnancy or

maternity, marital or civil partnership status, gender reassignment, religious belief or political opinion, age, disability, sexual orientation and membership of the traveller community;

– maternity/adoptiveleaveofupto52weeks(eligible employees on maternity leave are entitledto6weeks’payat90%oftheirnormalweekly earnings and 33 weeks’ pay at the rate of£136.78perweekor90%oftheirnormalweeklyearningswhicheverislower;employeeson adoptive leave are entitled to adoption pay for up to 39 weeks at the rate of £136.78 per weekor90%oftheirnormalweeklyearnings,whichever is lower. These rates are reviewed bi-annuallyinAprilandOctobereachyear;and

– parental leave (up to 18 weeks unpaid) up to the child’s 5th birthday or 18th birthday if the child is disabled.

Fair Employment

• InNorthernIreland,theFairEmploymentandTreatment(NI)Order1998prohibitsdirect and indirect discrimination, harassment or victimisation on the grounds of religious belief or political opinion. It imposes specific monitoring obligations on employers with 10 or more employees and public authorities to:

– registerwiththeEqualityCommission;

– monitor the community background, sexandoccupationoftheirworkforce;

– conduct Article 55 reviews of the compositionoftheirworkforceevery3years;and

Employment

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– take affirmative action to ensure fair participation of workers from different community backgrounds, where necessary.

Tax

• Anemployerisobligedtodeductincometax,calledPAYE(PayAsYouEarn)andNational Insurance Contributions (NICs) at sourcefromtheemployee’smonthly/weeklysalary.

Post-Employment

Protection For Employers Restrictive Covenants

• Employerscanprotecttheirbusinessafteranemployeeleavesemploymentbyincludingpost-termination restrictions (Restrictive Covenants) in the employee’s contract of employment. However, such restrictions will only be enforceable if the employer can show that:

– it has a legitimate business interest that it is necessarytoprotect;and

– the protection sought by the restriction is no more than is reasonable having regard to the interests of the parties and the public interest.

Accordingly, restrictive covenants will be limited in terms of time, scope and geographical extent and will only be appropriate in respect of those employees who could damage the legitimate business interests of the employer, for example, senior executives or salesmen. If a restrictive covenant is wider than is necessary to protect an employer’s legitimate business interests or imposed on employees with limited ability to damage the employer’s business, the restriction will likely be declared void by the Courts as a restraint of trade and contrary to public policy.

• Restrictionswillgenerallyinvolve:

– non-solicitationofclients/prospectiveclients;

– non-solicitationofkeyemployees;

– non-interferencewithsuppliers;and

– non-competitionclauses.

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Garden Leave• Employerscanalsoincludeaclauseinanemployee’s contract of employment permitting the employer to put the employee on Garden Leavewhentheiremploymentisterminated.This will allow the employer to stop the employee performing their duties immediately whilst retaining the employee for the duration oftheirnoticeperiod.TheaimofGardenLeaveis to keep the employee out of the marketplace long enough for any information they have to go out of date or to enable the employee’s successor to establish themselves, particularly with customers, so as to protect goodwill.

Confidentiality• Employerscanprotectconfidentialinformation, over and above trade secrets, where an express confidentiality clause has been included in an employee’s contract of employment. Again, however, such clauses must be drafted with sufficient precision for the employer to demonstrate that the clause is necessary to protect its legitimate business interests and goes no further than is reasonable and necessary to protect those business interests following the termination of the employee’s contract.

Note: None of the above protections are automatic and must be expressly included in an employee’s contract of employment to be enforceable.

Health And Safety

• As in most countries in the developed world, safety, health and welfare of employees is a closely regulated area governed by legislation, regulations and codes of practice. The primary legislation in Northern Ireland is the Health andSafetyatWork(NI)Order1978.Healthand Safety legislation places significant responsibilities on employers, directors, managers and employees.

• AllemployersinNorthernIrelandhavealegal duty to:

- maketheworkplacesafeandeliminateorcontrolriskstohealth;

- ensurethatplantandmachineryaresafeand that safe systems of work are set and followed;

- ensurearticlesandsubstancesaremoved,storedandusedsafely;

- provideadequatewelfarefacilities;

- giveworkerstheinformation,instruction,training and supervision necessary for their healthandsafety;and

- consultworkersonhealthandsafetymatters.

Employment continued

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• EEA/Swissnationalsdonotrequireanydocumentation such as a residence permit or an employment permit in order to live and work inNorthernIreland(aspartoftheUK).

• BulgariaandRomaniajoinedtheEuropeanUnionon1January2007.BulgarianandRomanian nationals do not need permission to enter or remain in Northern Ireland but will needtoapplytotheUKBorderAgencyforanaccession worker card if they want to work in Northern Ireland. Employers may first have to apply for a work permit for a Bulgarian or Romanian national before an accession worker card can be obtained. These employment permit requirements apply only to the first continuous twelve months of employment in Northern Ireland.Attheendofthistwelve-monthperioda Bulgarian or Romanian national will be free to work in Northern Ireland without any further need for an employment permit.

• Non-EEAnationalsdonotneedavisatovisitNorthern Ireland for a period of up to 6 months but they must apply for a visa if they wish to work in Northern Ireland. There are various immigrationcategoriesforNon-EEAnationalswho want to work in Northern Ireland, most ofwhicharepartoftheUKBorderAgency’spoints-basedsystemforimmigration.Themajority of visa applicants will be required to enrol biometric information (fingerprints and a facial image) at one of the visa application centres in their country of residence. Visa application fees will vary depending on the category of visa required.

• Anycompanythatseekstohirenewemployees must first seek to source such employeeswithintheUKortheEEA.Whenreasonable efforts have been made to do so but without success, the company may seek to recruit employees from outside the EEA. The employee must have a valid employment permit beforehe/shecancommenceworkinNorthernIreland.

• Theterm‘employmentpermit’isagenericterm including work permits, green cards, intra-companytransfers,spousal/dependentpermits and any other permits granted under thepoints-basedsystemorotherwise.

• IfaNon-EEAnationalhasacurrentemployment permit issued by another EUmemberstate,thatpersoncanworkinNorthern Ireland subject to the issuance of a VanderElstvisabytheUKBorderAgency.

Residence and Employment Permits

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Telecommunications and Data Protection

The Northern Irish Telecommunications Market

• AlongwiththerestoftheUnitedKingdom,the Northern Irish telecommunications market is fully privatised and competitive and is regulatedbytheOfficeofCommunications(OFCOM),whichworkscloselywiththeBBCTrust,theOfficeofFairTrading(OFT)andtheInformationCommissioner’sOffice(ICO).

• UndertheCommunicationsAct2003,theDepartmentofEnterpriseTradeandInvestment(DETI)hasthepowertoawardmoneytopersons/commercialactivitiesconnectedwiththe provision or improvement of electronic communications networks and services within NorthernIreland.DETI’sviewinMarch2011wasthat “for a number of years, Northern Ireland has been at the forefront of the development of telecommunications services.”

• DETIhasmadeimportantinvestmentsinthe private sector to ensure that broadband services are available across all of Northern IrelandandOFCOM’s2013annualreportnow refers to “Northern Ireland having had the highest availability of fibre broadband amongtheUKnationsinJune2013.”Aspectsof our telecommunications infrastructure are recognised as world class and it is Invest Northern Ireland’s view that Northern Ireland is “already a leader in mobile and wireless technologies.”

Electronic Commerce

• TheElectronicCommunicationsAct2000helpstocreateaUKlegalframeworkforelectronic commerce. It contains important provisions around the validity of electronic form contracts, supports approved cryptography service providers and provides that electronic signatures are admissible in evidence, all helping assist in the growth of mobile trade.AccordingtoIMRG,theUK’sindustryassociationforonlineretail,therewasa300%growth in mobile commerce in 2012.

Data Protection

• DataprotectioninNorthernIrelandisgovernedbytheDataProtectionAct1998 andisregulatedbytheICO.Businesses that hold or process personal data must registerwiththeICOasdatacontrollers or data processors unless a specific exception applies.

• SpecialrulesapplyforelectronicmarketingunderthePrivacyandElectronicCommunications(ECDirective)Regulations2003(PrivacyRegulations).Inaddition,thePrivacyRegulationswereamendedin2011with the effect that there are now specific requirements to be met before cookies can be used on a website. Those setting cookies must:

– tellpeoplethatthecookiesarethere;

– explainwhatthecookiesaredoing;and

– obtain their consent to store a cookie on their device.

• Allofthesemeasuresaredesignedtoassisttrade, but at the same time protect individual freedoms.18

• TheUKhasrecentlyundertakenaseries of tax reforms which apply in Northern Ireland and now has a competitive and comprehensive regime to support the development and exploitation of intellectual property(IP).ThisincludesanextensiveR&Dcredit regime complemented by favourable provisions for the commercialisation of innovationintheshapeofthenewPatentBox,as summarised below.

Patents

• Whenaninnovationismadeitis extremely important to consider how it should be protected before it is marketed or any samples are released. Failure to do so can severely limit the scope for protecting theinnovation.Patentsaffordmonopolyprotections which permit the inventor to stop third parties from using the invention. PatentsintheUKarevalidfor20yearsfromtheir filing date subject to the payment of renewal fees.

• TheUKisapartytothefollowinginternational conventions which are currently inforce:ParisConventionfortheProtectionofIndustrialProperty1883;EuropeanPatentConvention1973;PatentCo-operationTreaty1970;andAgreementonTrade-RelatedAspectsofIntellectualProperty1994.Theobjective of these conventions is streamlining patent application, filing and searches throughouttheEUandtheworld.

• AspartoftheGovernment’saimtoencourageinnovationintheUK(includingNorthernIreland)anew10%corporation

tax rate has been introduced that applies toPatentBoxprofits.Thisisasignificantsaving compared to the main headline tax rateof20%(by2015).Thenewpatentboxregime provides an attractive opportunity for businesses to reduce the costs associated with thecommercialexploitationofIP.Theregimeisflexible and generous and the relief applies to worldwide profits from inventions patented by theIPO,theEuropeanPatentOfficeandcertainother patent offices.

Intellectual Property Rights

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Trade Marks

• Trademarkshavelongbeenusedbymanufacturers and traders to distinguish their goods from those made or sold by others. Trade marks are a very valuable form of intellectual property because they become associated with quality and consumer expectations in a product or service.

• TrademarksinNorthernIrelandcanberegisteredwiththeIntellectualPropertyOffice(IPO),theCommunityTradeMarksOffice(OHIM)orwiththeInternationalTradeMarksOffice(WIPO)pursuanttotheMadridProtocol.

• Theownerofatrademarkhasamonopolyover its use for the goods or services for which it is registered. A trade mark is infringed if someone else uses an identical or confusingly similar trade mark in relation to the same goods or services.

Passing Off

• Business‘goodwill’isprotectedbypassingoff and the owner of the goodwill has a property right that can be protected by an action in passing off. Quite often passing off actions will be brought as an alternative cause of action to an action for infringement of a registered trade mark or in respect of an unregistered trade mark.

• Itispossiblethatbusinessmethodsand get-up,marketingstrategyandadvertisingthemes can be protected by this useful area of law. The main principle of passing off is that one business or trader has established goodwill

and another trader tries to take advantage of that goodwill and a significant proportion of the trader’s custom could be captured because of confusion amongst customers as to whom they are dealing with.

Copyright

• NorthernIrishcopyrightlawissetoutintheCopyright,DesignsandPatentsAct1988andassociated case law. Copyright seeks to protect original literary, dramatic, musical or artistic works, sound recordings, films or broadcasts and the typographical arrangements of published editions.

• Theownerofcopyrightsubsistinginawork has exclusive rights to do certain acts in relation to the work such as making a copy, broadcasting or selling copies to the public. If a person performs one of the acts restricted by copyright without the permission or licence of the copyright owner, the latter can sue for infringement of his copyright and obtain remedies such as damages or an injunction.

• Whereaworkismadeinthecourseofemployment, the copyright in such work will automatically vest in the employer in the absence of some agreement to the contrary. The position differs in relation to commissioned works where any copyright in works will automatically vest in the contractor. It is essential to deal with the issue of ownership of copyright at the beginning of a working relationship to avoid any disputes arising later on.

Intellectual Property Rights continued

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Designs

• Whenapplyingforregistrationofadesign,the design must be new and have an individual character-anidenticalorverysimilardesignmust not have been disclosed anywhere in the world prior to the application. However, thedesignerhasa12-monthgraceperiod after disclosure in which to file his application for a design.

• Protectioncanlastfor25years,andtheprocedureforregistrationisrelativelylow-cost and quick, making it an attractive form of protection.

Confidential Information

• Itisageneralprincipleoflawthatapersonwho has received information in confidence cannot take unfair advantage of it. The obligation to keep information confidential can arise through contract or may be implied through the circumstances of disclosure or the relationship between the parties.

• Asuccessfulclaimantinanactionformisuse of confidential information will be entitled to an account of profits or damages. In certain circumstances the Court may also be willing to issue an injunction against use of the information.

Northern Irish Courts for IP Disputes

• AbigadvantageforNorthernIrelandistheCommercial Court, a division of the High Court in Northern Ireland dealing with commercial disputes,includingIPdisputesofsignificantvalue. Either party can apply to have a case listed in the Commercial Court.

• TheadvantageoftheCommercialCourtis that its cases are regularly reviewed by a CommercialHighCourtJudgewhowillcasemanage the litigation with a view to progressing all cases as expeditiously as possible.

• TheCourtsinNorthernIrelandarebecoming increasingly focused on early implementationofformsofAlternativeDisputeResolution such as Mediation.

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Deregulation

• NorthernIrelandhasanincreasinglydynamicenergy market. The sector has deregulated its electricity and gas markets and has established theNorthernIrelandUtilitiesRegulatorasthebody for licensing participants in the market and overseeing the deregulated markets with the aim of promoting competition and minimising costs to the consumer.

• Thederegulationprocesshasledtotheseparation of the generation, transmission and supplyactivitiesoftheformerlystate-ownedpower utility, Northern Ireland Electricity, into separate businesses and the opening up of the market to independent power companies to supply commercial and domestic customers.

Gas and Electricity Markets

• Liberalisationofthegasmarkethasalsoresulted in a number of licensed suppliers entering the commercial and residential market, includingFirmusEnergy,PhoenixandAirtricity,manyofwhichnowalsoofferdual-fuelsuppliesof electric and gas. Further extensions to the Northern Ireland gas network to the west of the region have also recently been announced following the successful extension of the network into the North West.

• From1November2007,theSingleElectricity Market (SEM) introduced a regime for the wholesale trading of electricity on the island of Ireland. The SEM allows for increased competition in the wholesale electricity market whilst also providing a secure, reliable and sustainable electricity market on the island of Ireland. In Northern Ireland the SEM is overseenbytheSystemsOperatorforNorthernIreland(SONI)inconjunctionwiththe Single ElectricityMarketOperator(SEMO)inIreland.

Renewable Energy

• Windenergyisthemostprevalentsourceof renewable energy in Northern Ireland with around 500MWs connected to the national grid or in development and a further 1,000MWs awaiting or seeking planning consent. Northern Irelandmetitstargetof12%renewablegeneration by 2012 and has set an ambitious targetofgenerating40%ofitselectricity fromrenewablesourcesby2020.Onshorewind energy will play a key role in achieving this target.

• Technologiessuchasanaerobicdigestion,biomassandsolarPVarealsoseeingsignificantlevels of investment and development. Two major offshore wind and tidal schemes have also recently been granted site licences and developmentcanbeexpectedby2020/21.

Energy

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Government Incentives

• Supportschemesforrenewablegenerationhave been a major feature in the incentivisation of development within NI and have in part led to the significant increase in installed capacity in recent years. The current support mechanism, theNIRenewableObligation(NIRO),willbeinplace until 2017, with all generators connected prior to that date receiving support payments for 20 years.

• FromApril2017supportfornewgenerationwill be provided by Feed in Tariffs with ContractsforDifferenceforlargerschemes.A Renewable Heat Incentive (RHI) scheme fornon-domesticinstallationsof,forexamplebiomassboilersorCHPplanthasrecentlybeenintroduced with a domestic RHI scheme to follow shortly.

The Future

• RequirementsunderEUlawforincreasedgrid integration and the need to provide stable capacity for the increasing level of wind generation across the island of Ireland have led to proposals for the development of a new north-southelectricityinterconnector,expectedtocommencedevelopmentin2014/2015.Thisis also anticipated to bring further benefits in terms of reduced electricity costs.

• Energystorageprojectsarealsocurrentlyunder development to provide further grid reinforcement. A major gas storage project is also in development along with continued prospecting for shale gas, with significant reserves having been identified in the west of the island. Indigenous reserves of gas along with storage facilities are expected to significantly improve security of supply and mitigate price increases in the longer term.

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• Environmentalriskcanbemanagedthrougha comprehensive suite of tools including corporate and environmental due diligence, commissioning of environmental studies, environmental insurance, bonds and other forms of underwriting to cover operational risk and decommissioning obligations, as well as the use of environmental warranties and indemnities in corporate transactions.

• NorthernIreland’senvironmentallawregimeis a strong regulatory based model with the NI Environment Agency (NIEA), as primary environmental regulator, possessing a wide range of investigatory and enforcement powers. That said, the Regulator has a stated policy of providing “light touch” regulation to well run and fully compliant businesses in order to focus its enforcement response on businesses with a poor track record of compliance.

• Damageorlosscausedthroughpollution or contamination may also lead to claims under civil law principles, i.e. nuisance, negligence or trespass.

• Thereisacomprehensivesystemofenvironmental permitting in operation in Northern Ireland. For the majority of industry in Northern Ireland the central environmental authority, the NIEA, implements and enforces theECbasedIntegrationPollutionPreventionand Control licensing system, whereas district councils licence smaller and less intense operations. A broad range of permits are also required for waste management activities and aquatic discharges but plans are developing for the creation of single integrated environmental permits.

• Whereaproposeddevelopmentmayhave a significant environmental impact an Environmental Impact Assessment should be undertaken by the developer as part of the development application. The developer will produce an Environmental Statement which will have to be considered by various consultees before planning permission (development consent) will be granted.

• EnvironmentallawinNorthernIrelandisimpactedbytheUnitedKingdom’sclimatechange agenda. The Northern Ireland Executive’sProgrammeforGovernmenttargetis to work towards a reduction in greenhouse gasemissionsofatleast35%on1990levelsby2025.TheCarbonReductionCommitment&Energy Efficiency Scheme (“the CRC Scheme”) wasbroughtintolawinApril2010,andisaUK-wide mandatory trading scheme impacting large public and private sector organisations such as supermarkets, hotel chains and government bodies. Further, a Northern Ireland Climate Change Bill is making its way through the legislative process which would impose legally binding greenhouse gas reduction targets in Northern Ireland.

• NorthernIrelandalsohasinplaceadetailedstatutory scheme for the remediation of contaminated land. Although yet to be enacted, itwillapplytopre-existingcontaminationandtherefore must be considered in property transactions.

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• ThebankingsectorinNorthernIrelandis regulated by the Bank of England, the FinancialConductAuthorityandthePrudentialRegulatoryAuthorityoftheUnitedKingdom.

• Theprovisionofbankingservicesisgenerally easily accessible by businesses with a minimum of formalities, subject to credit decision.Lenderswillgenerallyrequiresecurityto be provided by the borrower entity and may also seek parent company guarantees in order to secure the provision of debt facilities.

• Eachbankoperatesitsowncreditandlending policies so early engagement with a view to establishing bank accounts and obtaining overdrafts or other credit facilities is advisable.

• TherearenoexchangecontrolseffectiveinNorthern Ireland.

• TheUK’santi-moneylaunderinglegislation,which applies equally in Northern Ireland as intherestoftheUnitedKingdom,obligesfinancial institutions to ensure that any funds received by them are not the product of any illegal activity. Financial institutions and financial service providers must comply with certain money laundering controls which are similar to those in force in other European countriesandtheUSA.

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While care has been taken in the preparation of the content of all pages of this brochure, it does not purport to be a comprehensive statement of the relevant law and full professional advice should be taken before any action is taken in reliance on any item covered.

It is a condition of Tughans in allowing free access to this brochure and the information contained therein that you accept that Tughans will not be liable for any action taken in reliance on the information in this brochure.

Unlessotherwisestated,allcontentinthisbrochure is copyright of Tughans 2013.

Photographsonpages2,4,13and27,courtesyofNITB2013.

Disclaimer

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Marlborough House, 30 Victoria Street, Belfast BT1 3GGT: +44 (0) 28 9055 3300 E: law@tughans.com November 2013