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A Study of International and Gulf Experiences in Developing Home-based Businesses
Research Project “Home-based Businesses in Qatar: Current Reality and Mechanisms for Advancement”
A Study of International and Gulf Experiences in Developing Home-based Businesses
Research Project “Home-based Businesses in Qatar: Current Reality and Mechanisms for Advancement”
A Study of International and Gulf Experiences in Developing Home-based Businesses
Research Project “Home-based Businesses in Qatar: Current Reality and Mechanisms for Advancement”
Qatar Development Bank (QDB) was established in 1997 as the Qatar Industrial Development Bank, a 100% government-owned developmental organisation. Its primary aim was to develop investments within local industries, thereby accelerating growth and economic diversification in Qatar through support for private sector. Between 1997 and 2005, the bank expanded its portfolio, diversifying from its industrial base to include support and guidance for a range of non-industrial sectors identified as key to the development of Qatar. Shortly afterwards, the bank revisited its mission statement to reflect the successful completion of its new strategic objective and changed its name to Qatar Development Bank. The State of Qatar, QDB’s sole shareholder, increased the bank›s capital from 200 million to 10 billion riyals in 2008. Since that time, and reflecting the expansion of its mission and financial assets, QDB has launched a considerable number of strategic initiatives and programs, all designed to directly contribute to the economic growth and development of Qatar.
QDB’s strategy is entirely in line with Qatar National Vision 2030. It is focused on promoting and facilitating the growth of the private sector in Qatar within key economic channels. In turn, this support will enable the development of long term, sustainable social and economic benefits across the economy.
Aside from offering financial support, Qatar Development Bank is tasked with promoting entrepreneurship in the private sector, facilitating the development of key economic sectors through the provision of capital and advisory services. QDB has also launched several initiatives, including Al Dhameen program, an indirect loan facility to guarantee commercial bank loans to private sector companies, in collaboration with other banks and financial institutions.
QDB’s export arm “Tasdeer” program was created to develop and promote exports from Qatar, providing export credit guarantees in addition to financial products and solutions designed to mitigate the risks imposed on local exporters. The bank also provides consulting services in business development to help entrepreneurs to prepare for business. This will include feasibility studies, the conduct of market research and the selection of appropriate techniques; fundamentally helping to develop the capabilities of SME owners to enhance and refine their skills in the market and establish strong ties with financial and non-financial support entities.
Doha, QatarPO Box: 22789Tel: (+974) 44300000, Fax: (+974) 44316613Email: [email protected], website: www.qdb.qaResearch Project “Home-based Businesses (HbBs) in Qatar: current reality and mechanisms for advancement”A joint research project of Qatar Development Bank in cooperation with The Ministry of Labor and Social Affairs – Social Development Center
First Edition: October 2015Copyright reserved © 2015. Confidential intellectual property of Qatar Development BankThis report remains the property of Qatar Development Bank. Users must cite Qatar Development Bank source of the content as they would material from any printed work.ISBN: 73/ح م ف
Qatar Development Bank (QDB) was established in 1997 as the Qatar Industrial Development Bank, a 100% government-owned developmental organisation. Its primary aim was to develop investments within local industries, thereby accelerating growth and economic diversification in Qatar through support for private sector. Between 1997 and 2005, the bank expanded its portfolio, diversifying from its industrial base to include support and guidance for a range of non-industrial sectors identified as key to the development of Qatar. Shortly afterwards, the bank revisited its mission statement to reflect the successful completion of its new strategic objective and changed its name to Qatar Development Bank. The State of Qatar, QDB’s sole shareholder, increased the bank›s capital from 200 million to 10 billion riyals in 2008. Since that time, and reflecting the expansion of its mission and financial assets, QDB has launched a considerable number of strategic initiatives and programs, all designed to directly contribute to the economic growth and development of Qatar.
QDB’s strategy is entirely in line with Qatar National Vision 2030. It is focused on promoting and facilitating the growth of the private sector in Qatar within key economic channels. In turn, this support will enable the development of long term, sustainable social and economic benefits across the economy.
Aside from offering financial support, Qatar Development Bank is tasked with promoting entrepreneurship in the private sector, facilitating the development of key economic sectors through the provision of capital and advisory services. QDB has also launched several initiatives, including Al Dhameen program, an indirect loan facility to guarantee commercial bank loans to private sector companies, in collaboration with other banks and financial institutions.
QDB’s export arm “Tasdeer” program was created to develop and promote exports from Qatar, providing export credit guarantees in addition to financial products and solutions designed to mitigate the risks imposed on local exporters. The bank also provides consulting services in business development to help entrepreneurs to prepare for business. This will include feasibility studies, the conduct of market research and the selection of appropriate techniques; fundamentally helping to develop the capabilities of SME owners to enhance and refine their skills in the market and establish strong ties with financial and non-financial support entities.
Doha, QatarPO Box: 22789Tel: (+974) 44300000, Fax: (+974) 44316613Email: [email protected], website: www.qdb.qaResearch Project “Home-based Businesses (HbBs) in Qatar: current reality and mechanisms for advancement”A joint research project of Qatar Development Bank in cooperation with The Ministry of Labor and Social Affairs – Social Development Center
First Edition: October 2015Copyright reserved © 2015. Confidential intellectual property of Qatar Development BankThis report remains the property of Qatar Development Bank. Users must cite Qatar Development Bank source of the content as they would material from any printed work.ISBN: 73/ح م ف
32 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
Table of Contents1. INTRODUCTION 5
2. THE UNITED STATES OF AMERICA 9
2.1 Tenancy Contracts and Residential Area Laws 9
2.2 Business Licenses 10
2.3 Regulation of Home-Based Food Preparation Activities 12
2.4 HbB Competitions 14
3. CANADA 17
3.1 HbB Legal Structures 17
3.2 General Permits and Licenses 18
3.3 Permits and Licenses According to Economic Activity 19
3.4 Tax Reductions 21
3.5 HbB Insurance 22
4. SINGAPORE 25
4.1OrganizingtheHomeOffice 25
4.2 Legal Structure for HbBs 27
4.3 Preparing Food at Home for the Purpose of Sale 28
5. THE UNITED ARAB EMIRATES 31
5.1 Intelaq License –Emirate of Dubai 31
5.2 Eitimad License– Emirate of Sharjah 33
5.3 Mubdiah License – Abu Dhabi 37
5.4 The Mohammed bin Rashid Awards for Young Business Leaders 41
6. THE KINGDOM OF SAUDI ARABIA 43
6.1 The Executive Program for Licensing the Practice of Work from Home 43
6.2 The Productive Families Program 46
6.3 Bena’a Productive Families Centre (Jana) 50
7. THE KINGDOM OF BAHRAIN 53
7.1 The Framework Regulating HbBs 53
7.2 “Khatwa” for Home-Based Businesses 54
7.3 The Family Bank 55
7.4 The Productive Family Award 56
8. THE SULTANATE OF OMAN 59
8.1 The Framework Regulating HbBs 59
8.2 HbB Support Services 60
8.3 Small Investor Loans 62
8.4 The Sanad Programme 63
9. OTHER EXPERIENCES 64
9.1 Kuwait 64
9.2 The United Kingdom 65
9.3 New Zealand 67
10. CONCLUSION 70
SOURCES 74
APPENDIX (1): COUNCIL OF SAUDI CHAMBERS: TERMS AND REGULATIONS FOR PRACTICING SOME HbBS 77
APPENDIX (2): THE SULTANATE OF OMAN: APPLICATION FOR LICENSE TO PRACTICE INDIVIDUAL PRODUCTIVE WORK FROM HOME 89
32 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
Table of Contents1. INTRODUCTION 5
2. THE UNITED STATES OF AMERICA 9
2.1 Tenancy Contracts and Residential Area Laws 9
2.2 Business Licenses 10
2.3 Regulation of Home-Based Food Preparation Activities 12
2.4 HbB Competitions 14
3. CANADA 17
3.1 HbB Legal Structures 17
3.2 General Permits and Licenses 18
3.3 Permits and Licenses According to Economic Activity 19
3.4 Tax Reductions 21
3.5 HbB Insurance 22
4. SINGAPORE 25
4.1OrganizingtheHomeOffice 25
4.2 Legal Structure for HbBs 27
4.3 Preparing Food at Home for the Purpose of Sale 28
5. THE UNITED ARAB EMIRATES 31
5.1 Intelaq License –Emirate of Dubai 31
5.2 Eitimad License– Emirate of Sharjah 33
5.3 Mubdiah License – Abu Dhabi 37
5.4 The Mohammed bin Rashid Awards for Young Business Leaders 41
6. THE KINGDOM OF SAUDI ARABIA 43
6.1 The Executive Program for Licensing the Practice of Work from Home 43
6.2 The Productive Families Program 46
6.3 Bena’a Productive Families Centre (Jana) 50
7. THE KINGDOM OF BAHRAIN 53
7.1 The Framework Regulating HbBs 53
7.2 “Khatwa” for Home-Based Businesses 54
7.3 The Family Bank 55
7.4 The Productive Family Award 56
8. THE SULTANATE OF OMAN 59
8.1 The Framework Regulating HbBs 59
8.2 HbB Support Services 60
8.3 Small Investor Loans 62
8.4 The Sanad Programme 63
9. OTHER EXPERIENCES 64
9.1 Kuwait 64
9.2 The United Kingdom 65
9.3 New Zealand 67
10. CONCLUSION 70
SOURCES 74
APPENDIX (1): COUNCIL OF SAUDI CHAMBERS: TERMS AND REGULATIONS FOR PRACTICING SOME HbBS 77
APPENDIX (2): THE SULTANATE OF OMAN: APPLICATION FOR LICENSE TO PRACTICE INDIVIDUAL PRODUCTIVE WORK FROM HOME 89
54 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
1. IntroductionDay after day, interest grows in Home-based Business (HbB) as a core foundation for encouraging entrepreneurship and creating a vibrant, entrepreneurial private sector. An HbB is defined as business whose main headquarters is located in the home of its owner, regardless of its size or the nature of its activity. Then, the home in fact becomes a business incubator founded by the individual himself, developing into a point from which the enterprise is launched into the business world.
On the international level, several studies indicate that two out of every three enterprises (of all sizes) begin their business in the living room or kitchen, or even the basement. In modern times, this model has borne witness to the start of many varied, major companies, including Apple and Baskin Robbins Ice Cream. A number of motivators fueling the phenomenon of a growing number of HbBs may be examined, and they are as follows:
• Technology: Information technology and communications applications have helped increase the scope of access to both technology and networking with individuals, companies, and communities, and these applications can be used at affordable prices. There is no doubt that at present, the Internet plays an essential role in operating such virtual projects more than ever before.
• Company Downsizing: The restructuring witnessed by many major companies as well as their transformation into smaller companies through the phenomenon of downsizing has opened the field to a diversified value chain for their products and services by relying on outsourcing.
• Lifestyle: Some countries are witnessing an increasing emphasis on achieving balance between work and social life, which is hampered by long periods of working outside the home.
• Distance from Congestion and Traffic: Some find that a significant portion of their time is spent in traffic, or need to travel relatively long distances between their places of residence and work.
• Service Sector Gradual Growth: Business opportunities available for entrepreneurs have witnessed both growth and diversification and can be launched and operated from home.
• Aging Population and Early Retirement: This has led to longer life for a larger section of society alongside their continuing ability to work and contribute.
This path is fueled by number of benefits related to operating a business from home, the most important of which involves low start-up costs. This issue is of particular priority among the unemployed. Some are also interested in the savings associated with this type of project, pointing to reductions in transportation, food, and clothing costs. A flexible working environment is also linked to this type of enterprise, which helps achieve balance between work and social life. For these reasons, HbBs are a viable, and often the most preferable option for a range of individuals, especially parents with younger children (Family Office Liaison, 2010:4).
On the other hand, HbBs are linked to a number of disadvantages, at the forefront of which is that the entrepreneur works alone. This may isolate him/her and they are unable to work as part of a team. Also, the fact that the business relies on only one person makes him or her responsible for all associated tasks; this may require long periods of time and increase operation and continuation risks for the business. Another challenge is represented in the difficulty of differentiating between HbB work and personal life.
54 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
1. IntroductionDay after day, interest grows in Home-based Business (HbB) as a core foundation for encouraging entrepreneurship and creating a vibrant, entrepreneurial private sector. An HbB is defined as business whose main headquarters is located in the home of its owner, regardless of its size or the nature of its activity. Then, the home in fact becomes a business incubator founded by the individual himself, developing into a point from which the enterprise is launched into the business world.
On the international level, several studies indicate that two out of every three enterprises (of all sizes) begin their business in the living room or kitchen, or even the basement. In modern times, this model has borne witness to the start of many varied, major companies, including Apple and Baskin Robbins Ice Cream. A number of motivators fueling the phenomenon of a growing number of HbBs may be examined, and they are as follows:
• Technology: Information technology and communications applications have helped increase the scope of access to both technology and networking with individuals, companies, and communities, and these applications can be used at affordable prices. There is no doubt that at present, the Internet plays an essential role in operating such virtual projects more than ever before.
• Company Downsizing: The restructuring witnessed by many major companies as well as their transformation into smaller companies through the phenomenon of downsizing has opened the field to a diversified value chain for their products and services by relying on outsourcing.
• Lifestyle: Some countries are witnessing an increasing emphasis on achieving balance between work and social life, which is hampered by long periods of working outside the home.
• Distance from Congestion and Traffic: Some find that a significant portion of their time is spent in traffic, or need to travel relatively long distances between their places of residence and work.
• Service Sector Gradual Growth: Business opportunities available for entrepreneurs have witnessed both growth and diversification and can be launched and operated from home.
• Aging Population and Early Retirement: This has led to longer life for a larger section of society alongside their continuing ability to work and contribute.
This path is fueled by number of benefits related to operating a business from home, the most important of which involves low start-up costs. This issue is of particular priority among the unemployed. Some are also interested in the savings associated with this type of project, pointing to reductions in transportation, food, and clothing costs. A flexible working environment is also linked to this type of enterprise, which helps achieve balance between work and social life. For these reasons, HbBs are a viable, and often the most preferable option for a range of individuals, especially parents with younger children (Family Office Liaison, 2010:4).
On the other hand, HbBs are linked to a number of disadvantages, at the forefront of which is that the entrepreneur works alone. This may isolate him/her and they are unable to work as part of a team. Also, the fact that the business relies on only one person makes him or her responsible for all associated tasks; this may require long periods of time and increase operation and continuation risks for the business. Another challenge is represented in the difficulty of differentiating between HbB work and personal life.
76 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
As the number of HbBs grows at a rapid pace, especially in recent times, this fact indicates that many individuals have found that the positives associated with this type of business outweigh the disadvantages (Family Office Liaison, 2010: 4). This has prompted some countries to recognize HbBs as a type of regular official business, to facilitate the business environment for HbBs and to adopt programs and initiatives promoting advancement according to the HbB’s specific nature.
At the local level, “Qatar National Vision 2030” aspires to transform Qatar into an advanced, sustainably-developed country that offers a high standard of living for present and future generations. According to “Qatar National Development Strategy 2011-2016”, two basic, complementary objectives may be examined in order to demonstrate the importance of HbBs. They are as follows:
• With regard to economic development, the objective of “strengthening the private sector and encouraging entrepreneurship” is one of the main targets for achieving economic prosperity in order to “build a diverse economy that decreases its dependence on the hydrocarbon industries and the increasingly important role of the private sector, while also maintaining competitiveness.” This is linked to number of challenges, including the limited contribution of SME sector in economic activity (The General Secretariat for Development Planning, 2011: 93).
• With regard to social development, the Qatar National Development Strategy 2011-2016 and the National Family Strategy 2008-2013 aim to “improve the level of economic and social empowerment for Qatari families”. This, to a large extent, is linked to providing adequate opportunities to generate an income that provides a dignified life for all citizens, especially through work opportunities that are productive and encourage entrepreneurship. Current reality points to a low level of economic and social empowerment for Qatari households, especially for vulnerable families and females (General Secretariat for Development Planning, 2011: 160-165)
It is worth noting that females’ opportunities to participate in economic life remain relatively limited. According to the results of the Economic Participation and Opportunity subindex issued by the World Economic Forum in 2014, Qatar was ranked among 101 among the 142 countries included in the report (World Economic Forum, 2014: 309).
In order to help in achieving these objectives, several efforts may be exerted in a view toward establishing a vibrant, active private sector which plays its assigned developmental role with respect to the SME sector on one hand, and contributes to improving economic and social empowerment in Qatari society on the other. In this context, promoting HbBs represents an essential approach which requires work, just as is the case for leading international experiences. HbBs must be integrated within official economic activities and promoted, all while taking into account the needs and special features of HbBs in Qatar and the rest of the world.
Based on the above, the Qatar Development Bank (QDB) in collaboration with the Ministry of Labor and Social Affairs and the Social Development Center, conducted a research project entitled “Home-based Businesses in Qatar: Current Reality and Mechanisms for Advancement,” which accentuates one specific, principle dilemma:
“How can HbBs in the State of Qatar be promoted as an integral part of a vibrant, active private sector which helps in achieving high levels of economic and social empowerment for Qatari households, and, in turn, positively impact the Qatar National Vision 2030?”
In order to accomplish the research project’s mission, the scope of the work included three main, complementary axes, which are as follows:
• Implementing a telephone survey for HbBs registered with the Ministry of Labor and Social Affairs as well as the Social Development Center.
• Exploring distinguished Gulf and international experiences and expertise in order to extract lessons learned.
• Proposing policy options that can be implemented to advance HbBs in the State of Qatar, guided by the results of the survey on current status for these businesses as well as the recommendations of the exploratory study of pioneering regional and international experiences in this field.
This output – which forms the second phase of research project efforts—is concerned with reviewing the results of the exploratory study of Gulf and international experiences and expertise. The study qualitatively analyzed relevant publications with a focus on reviewing government efforts to establish a regulatory and legislative framework to support HbBs, as well as supporting initiatives.
At the international level, the study addressed the main features of experiences in the United States of America, Canada, and the United Kingdom. As for the Gulf, the experiences of the United Arab Emirates, Bahrain, Saudi Arabia, and Oman were discussed.
The study comprises nine sections, the first being the introduction. Following this, sections two through eight discuss the experiences which are the subject of this study. Finally, the ninth section states the most important conclusions of results and final recommendations.
76 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
As the number of HbBs grows at a rapid pace, especially in recent times, this fact indicates that many individuals have found that the positives associated with this type of business outweigh the disadvantages (Family Office Liaison, 2010: 4). This has prompted some countries to recognize HbBs as a type of regular official business, to facilitate the business environment for HbBs and to adopt programs and initiatives promoting advancement according to the HbB’s specific nature.
At the local level, “Qatar National Vision 2030” aspires to transform Qatar into an advanced, sustainably-developed country that offers a high standard of living for present and future generations. According to “Qatar National Development Strategy 2011-2016”, two basic, complementary objectives may be examined in order to demonstrate the importance of HbBs. They are as follows:
• With regard to economic development, the objective of “strengthening the private sector and encouraging entrepreneurship” is one of the main targets for achieving economic prosperity in order to “build a diverse economy that decreases its dependence on the hydrocarbon industries and the increasingly important role of the private sector, while also maintaining competitiveness.” This is linked to number of challenges, including the limited contribution of SME sector in economic activity (The General Secretariat for Development Planning, 2011: 93).
• With regard to social development, the Qatar National Development Strategy 2011-2016 and the National Family Strategy 2008-2013 aim to “improve the level of economic and social empowerment for Qatari families”. This, to a large extent, is linked to providing adequate opportunities to generate an income that provides a dignified life for all citizens, especially through work opportunities that are productive and encourage entrepreneurship. Current reality points to a low level of economic and social empowerment for Qatari households, especially for vulnerable families and females (General Secretariat for Development Planning, 2011: 160-165)
It is worth noting that females’ opportunities to participate in economic life remain relatively limited. According to the results of the Economic Participation and Opportunity subindex issued by the World Economic Forum in 2014, Qatar was ranked among 101 among the 142 countries included in the report (World Economic Forum, 2014: 309).
In order to help in achieving these objectives, several efforts may be exerted in a view toward establishing a vibrant, active private sector which plays its assigned developmental role with respect to the SME sector on one hand, and contributes to improving economic and social empowerment in Qatari society on the other. In this context, promoting HbBs represents an essential approach which requires work, just as is the case for leading international experiences. HbBs must be integrated within official economic activities and promoted, all while taking into account the needs and special features of HbBs in Qatar and the rest of the world.
Based on the above, the Qatar Development Bank (QDB) in collaboration with the Ministry of Labor and Social Affairs and the Social Development Center, conducted a research project entitled “Home-based Businesses in Qatar: Current Reality and Mechanisms for Advancement,” which accentuates one specific, principle dilemma:
“How can HbBs in the State of Qatar be promoted as an integral part of a vibrant, active private sector which helps in achieving high levels of economic and social empowerment for Qatari households, and, in turn, positively impact the Qatar National Vision 2030?”
In order to accomplish the research project’s mission, the scope of the work included three main, complementary axes, which are as follows:
• Implementing a telephone survey for HbBs registered with the Ministry of Labor and Social Affairs as well as the Social Development Center.
• Exploring distinguished Gulf and international experiences and expertise in order to extract lessons learned.
• Proposing policy options that can be implemented to advance HbBs in the State of Qatar, guided by the results of the survey on current status for these businesses as well as the recommendations of the exploratory study of pioneering regional and international experiences in this field.
This output – which forms the second phase of research project efforts—is concerned with reviewing the results of the exploratory study of Gulf and international experiences and expertise. The study qualitatively analyzed relevant publications with a focus on reviewing government efforts to establish a regulatory and legislative framework to support HbBs, as well as supporting initiatives.
At the international level, the study addressed the main features of experiences in the United States of America, Canada, and the United Kingdom. As for the Gulf, the experiences of the United Arab Emirates, Bahrain, Saudi Arabia, and Oman were discussed.
The study comprises nine sections, the first being the introduction. Following this, sections two through eight discuss the experiences which are the subject of this study. Finally, the ninth section states the most important conclusions of results and final recommendations.
98 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
2. The United States of AmericaThe number of HbBs is growing in the United States of America, as well as the rest of the world, especially in light of the economic recession experienced by the state. This has pushed more and more citizens who are unable to work to start their own HbBs with the expectation these numbers will grow in the coming years.
The U.S. Small Business Administration (SBA) – which defines small businesses as those with fewer than 500 employees- has announced that there are approximately 28 million small businesses in the US, more than 22% of which rely solely on their owner and no other staff. Also, 52% of the total number of small businesses are HbBs (Forbes, 2014). Other statistics indicate that over 16 million people own HbBs, and this number is expected to increase over the next four years (as of 2014) up to 64% (Aaron, 2014).
On a similar note, the 2012 Global Entrepreneurship Monitor report indicated that 69% of recently established businesses begin in the home. This is connected to a large extent with female entrepreneurship, as 72% of recently established businesses managed by women utilize the home as their headquarters, compared to 61% of recently established businesses managed by men. Further, 59% of businesses founded three and a half years ago are considered HbBs, and with regard to existing businesses, 68% of those managed by women are home-based, compared to 53% of those managed by men (Campbell, 2013).
This was accompanied by the state taking on efforts to incentivize HbBs in order to ensure that they are integrated into the formal economy. This was achieved by subjecting HbBs to a number of laws and regulations that apply to other business enterprises (non-home-based). This came alongside compelling HbBs to abide by various additional regulatory and licensing frameworks compatible with the nature of HbBs on one hand and grant them limited preferential treatment on the other.
The following aims to demonstrate the nature of the legislative and regulatory framework governing HbBs with a special focus on in-home food preparation for the purpose of sale, as this is one of the main activities conducted by HbBs in the State of Qatar. This is also accompanied by the SBA Home-based Business Champion Initiative.
2.1 Tenancy Contracts and Residential Area LawsIn order to identify the federal legislation applicable to American HbBs, the home tenancy contract forms a starting point if the owner lives in a rented house. In this case the owner must review the terms of the tenancy, which describes permitted and prohibited actions under the contract. In some cases, tenancy contract terms are general, which requires referring back to the landlord to stipulate the terms more clearly, or to obtain his or her agreement to establish an HbB in the residential unit that is the subject of the contract in order to ensure a sound legal position (Rampenthal, 2012).
The second step is represented by the need to check all legislation and restrictions applied to HbBs in the residential area in which the potential business owner resides, at the forefront of which are zoning laws. These laws are concerned with dividing land usage into commercial, residential, agricultural, and industrial fields and are utilized to prevent a certain plot or area from being used in a manner that affects adjacent areas. In this regard, the Local Land Use Department will conduct a review to determine the classification of an HbB owner’s property (Rampenthal, 2012).
98 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
2. The United States of AmericaThe number of HbBs is growing in the United States of America, as well as the rest of the world, especially in light of the economic recession experienced by the state. This has pushed more and more citizens who are unable to work to start their own HbBs with the expectation these numbers will grow in the coming years.
The U.S. Small Business Administration (SBA) – which defines small businesses as those with fewer than 500 employees- has announced that there are approximately 28 million small businesses in the US, more than 22% of which rely solely on their owner and no other staff. Also, 52% of the total number of small businesses are HbBs (Forbes, 2014). Other statistics indicate that over 16 million people own HbBs, and this number is expected to increase over the next four years (as of 2014) up to 64% (Aaron, 2014).
On a similar note, the 2012 Global Entrepreneurship Monitor report indicated that 69% of recently established businesses begin in the home. This is connected to a large extent with female entrepreneurship, as 72% of recently established businesses managed by women utilize the home as their headquarters, compared to 61% of recently established businesses managed by men. Further, 59% of businesses founded three and a half years ago are considered HbBs, and with regard to existing businesses, 68% of those managed by women are home-based, compared to 53% of those managed by men (Campbell, 2013).
This was accompanied by the state taking on efforts to incentivize HbBs in order to ensure that they are integrated into the formal economy. This was achieved by subjecting HbBs to a number of laws and regulations that apply to other business enterprises (non-home-based). This came alongside compelling HbBs to abide by various additional regulatory and licensing frameworks compatible with the nature of HbBs on one hand and grant them limited preferential treatment on the other.
The following aims to demonstrate the nature of the legislative and regulatory framework governing HbBs with a special focus on in-home food preparation for the purpose of sale, as this is one of the main activities conducted by HbBs in the State of Qatar. This is also accompanied by the SBA Home-based Business Champion Initiative.
2.1 Tenancy Contracts and Residential Area LawsIn order to identify the federal legislation applicable to American HbBs, the home tenancy contract forms a starting point if the owner lives in a rented house. In this case the owner must review the terms of the tenancy, which describes permitted and prohibited actions under the contract. In some cases, tenancy contract terms are general, which requires referring back to the landlord to stipulate the terms more clearly, or to obtain his or her agreement to establish an HbB in the residential unit that is the subject of the contract in order to ensure a sound legal position (Rampenthal, 2012).
The second step is represented by the need to check all legislation and restrictions applied to HbBs in the residential area in which the potential business owner resides, at the forefront of which are zoning laws. These laws are concerned with dividing land usage into commercial, residential, agricultural, and industrial fields and are utilized to prevent a certain plot or area from being used in a manner that affects adjacent areas. In this regard, the Local Land Use Department will conduct a review to determine the classification of an HbB owner’s property (Rampenthal, 2012).
1110 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
“Mixed use” is a common residential and commercial land use model, and can take several forms. If an HbB is incompatible with the land classification applied to the residential area it is located in, the owner may submit a form to apply for “variance” in order to obtain an exception to the restrictions of laws applied in the geographic area. It is worth noting that in reality, some within the population may believe that moving homes from one geographic area to another in order to permit the launch of an HbB is preferable to dealing with the local government to receive an exception after requesting “variance” (Rampenthal, 2012).
On a related note, HbB ordinances have come to play an important role in organizing this type of business, which may differ from state to state within the US as the case may be; however, the various branches of legislation originate from the same source. Therefore, a potential HbB owner should familiarize him/herself with the ordinances / legal regulations governing HbBs applied in his or her residential area in order to make sure that they are compatible with his/her plans.
It can be stated that the majority of such regulations forbid operation of a commercial enterprise that may negatively impact a residential area. Some of these regulations also limit the number of employees or prevent hiring employees to work with an HbB (Rampenthal, 2012). In this regard, the restrictions imposed on HbBs can be categorized into four groups as follows (US Small Business Administration, 2014: A:1):
• Restrictions associated with physical changes made to the home, where any internal changes made to the home in order to operate an HbB are prohibited, in addition to any business activities practiced outside the home, including storage and offering goods and products. Using banners or promotional commercials is also forbidden, or sometimes even prohibited
• Restrictions associated with the movement of people at the home, where the number of visitors to the HbB is restricted, in addition to the number of employees assisting the HbB. Such employees are also completely forbidden in some states, while the number of additional parking spaces granted to the HbB for visitors’ or employees’ cars is restricted.
• Restrictions associated with external HbB impacts, where any HbB impacts that bother neighbors (for example, noise, odors, or a glare) are prohibited and the use or storage of any hazardous substances is forbidden.
• Restrictions on HbB activities, where the regulations for such businesses prohibit practicing various types of business activities in residential areas and various other geographic areas.
2.2 Business LicensesIn order to encourage the initiation of actual HbB operation, obtaining a business license is a requirement –representing the fourth step of the process – and failure to obtain one will lead to fines and penalties. In this regard, the American experience indicates that regardless of whether a business is based in a home on not, it is subject to license and permit laws. One of the main reasons for this is that HbB owners must be subject to income tax. Further, HbBs which sell taxable goods and services also need a sales tax permit or license.
The starting point for this process is in the Internal Revenue Service (IRS) Office, which is responsible for collecting taxes in the United States of America. All businesses in operation (home-based and otherwise) are required to provide federal income tax statements and relevant tables. These businesses and their employees—if any— must prepare their tax files and fill out additional forms pertaining to depreciation deductions, home office costs, etc … (The U.S. Small Business Administration, 2004: ES2).
With regard to preferential treatment for HbBs, the IRS points out that HbBs receive a discount due to commercial use of home expense deductions, regardless of whether the HbB owner is a landlord or a tenant. In order for the HbB owner to benefit from this deduction, other requirements must also be fulfilled, as follows (Internal Revenue Service, 2014: 1):
• Regular and exclusive use of the home: The HbB owner must prove that he or she uses his/her home regularly as the exclusive place of work for his/her business activities
• The main headquarters of the business: The HbB owner also must prove that their home is the main headquarters for the activities of their business. It is worth noting that the owner of a non-home-based business is also qualified to receive a discount if they proves that they uses their home to a large and regular extent in order to complete tasks to operate his/her business.
In general, determining the percentage of deduction granted to the HbB is based on the proportion of space allotted to operating the HbB as compared to the total area of the home. Thus the IRS provides a detailed guide on interpreting “tax deductions for HbBs” on its website (Internal Revenue Service, 2013).
In a related context, various licenses and permits associated with protecting the public and consumers’ rights exist, and a number of licenses are related to specific industries/ economic activities. In order to examine the guidelines for licenses and permits required for HbBs, guidance can be drawn from the online tool launched by the U.S. Small Business Administration under the name “Permit Me.” This tool displays all licenses and permits required for HbBs according to their nature and geographic location. The licenses and permits required are as follows (The U.S. Small Business Administration, 2014: C):
• General Business Licenses: This is an annual license that authorizes its holder to operate a commercial business (home-based or otherwise) and its issuance is linked to paying symbolic financial fees.
• Professional and Trade Licenses: State governments request that specific companies/ industries obtain certain professional licenses. An example includes businesses associated with childcare and real estate licenses.
• Home Occupation Permit: In many US states, HbB owners are required to obtain a home occupation permit. In other cases, the laws governing specific geographic areas are referred to, as previously indicated.
• Sales Tax Permit: If an HbB owner plans to sell goods or services which are subject to taxation (regardless of whether this takes place online or through conventional means), local and federal taxes must be collected from HbB clients. Therefore, a sales tax permit must be issued from the IRS.
• Health and Safety Permits: Based on the geographic location and economic activity of the HbB, the HbB owner needs a permit (and in some cases an inspection from the local fire department is necessary, especially if the business requires the use of flammable materials or if it is possible that operation may result in the gathering of several people in one place, (as is the case for childcare activities)
1110 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
“Mixed use” is a common residential and commercial land use model, and can take several forms. If an HbB is incompatible with the land classification applied to the residential area it is located in, the owner may submit a form to apply for “variance” in order to obtain an exception to the restrictions of laws applied in the geographic area. It is worth noting that in reality, some within the population may believe that moving homes from one geographic area to another in order to permit the launch of an HbB is preferable to dealing with the local government to receive an exception after requesting “variance” (Rampenthal, 2012).
On a related note, HbB ordinances have come to play an important role in organizing this type of business, which may differ from state to state within the US as the case may be; however, the various branches of legislation originate from the same source. Therefore, a potential HbB owner should familiarize him/herself with the ordinances / legal regulations governing HbBs applied in his or her residential area in order to make sure that they are compatible with his/her plans.
It can be stated that the majority of such regulations forbid operation of a commercial enterprise that may negatively impact a residential area. Some of these regulations also limit the number of employees or prevent hiring employees to work with an HbB (Rampenthal, 2012). In this regard, the restrictions imposed on HbBs can be categorized into four groups as follows (US Small Business Administration, 2014: A:1):
• Restrictions associated with physical changes made to the home, where any internal changes made to the home in order to operate an HbB are prohibited, in addition to any business activities practiced outside the home, including storage and offering goods and products. Using banners or promotional commercials is also forbidden, or sometimes even prohibited
• Restrictions associated with the movement of people at the home, where the number of visitors to the HbB is restricted, in addition to the number of employees assisting the HbB. Such employees are also completely forbidden in some states, while the number of additional parking spaces granted to the HbB for visitors’ or employees’ cars is restricted.
• Restrictions associated with external HbB impacts, where any HbB impacts that bother neighbors (for example, noise, odors, or a glare) are prohibited and the use or storage of any hazardous substances is forbidden.
• Restrictions on HbB activities, where the regulations for such businesses prohibit practicing various types of business activities in residential areas and various other geographic areas.
2.2 Business LicensesIn order to encourage the initiation of actual HbB operation, obtaining a business license is a requirement –representing the fourth step of the process – and failure to obtain one will lead to fines and penalties. In this regard, the American experience indicates that regardless of whether a business is based in a home on not, it is subject to license and permit laws. One of the main reasons for this is that HbB owners must be subject to income tax. Further, HbBs which sell taxable goods and services also need a sales tax permit or license.
The starting point for this process is in the Internal Revenue Service (IRS) Office, which is responsible for collecting taxes in the United States of America. All businesses in operation (home-based and otherwise) are required to provide federal income tax statements and relevant tables. These businesses and their employees—if any— must prepare their tax files and fill out additional forms pertaining to depreciation deductions, home office costs, etc … (The U.S. Small Business Administration, 2004: ES2).
With regard to preferential treatment for HbBs, the IRS points out that HbBs receive a discount due to commercial use of home expense deductions, regardless of whether the HbB owner is a landlord or a tenant. In order for the HbB owner to benefit from this deduction, other requirements must also be fulfilled, as follows (Internal Revenue Service, 2014: 1):
• Regular and exclusive use of the home: The HbB owner must prove that he or she uses his/her home regularly as the exclusive place of work for his/her business activities
• The main headquarters of the business: The HbB owner also must prove that their home is the main headquarters for the activities of their business. It is worth noting that the owner of a non-home-based business is also qualified to receive a discount if they proves that they uses their home to a large and regular extent in order to complete tasks to operate his/her business.
In general, determining the percentage of deduction granted to the HbB is based on the proportion of space allotted to operating the HbB as compared to the total area of the home. Thus the IRS provides a detailed guide on interpreting “tax deductions for HbBs” on its website (Internal Revenue Service, 2013).
In a related context, various licenses and permits associated with protecting the public and consumers’ rights exist, and a number of licenses are related to specific industries/ economic activities. In order to examine the guidelines for licenses and permits required for HbBs, guidance can be drawn from the online tool launched by the U.S. Small Business Administration under the name “Permit Me.” This tool displays all licenses and permits required for HbBs according to their nature and geographic location. The licenses and permits required are as follows (The U.S. Small Business Administration, 2014: C):
• General Business Licenses: This is an annual license that authorizes its holder to operate a commercial business (home-based or otherwise) and its issuance is linked to paying symbolic financial fees.
• Professional and Trade Licenses: State governments request that specific companies/ industries obtain certain professional licenses. An example includes businesses associated with childcare and real estate licenses.
• Home Occupation Permit: In many US states, HbB owners are required to obtain a home occupation permit. In other cases, the laws governing specific geographic areas are referred to, as previously indicated.
• Sales Tax Permit: If an HbB owner plans to sell goods or services which are subject to taxation (regardless of whether this takes place online or through conventional means), local and federal taxes must be collected from HbB clients. Therefore, a sales tax permit must be issued from the IRS.
• Health and Safety Permits: Based on the geographic location and economic activity of the HbB, the HbB owner needs a permit (and in some cases an inspection from the local fire department is necessary, especially if the business requires the use of flammable materials or if it is possible that operation may result in the gathering of several people in one place, (as is the case for childcare activities)
1312 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
In some cases, air and water pollution resulting from the HbB is also taken into account, and the Environmental Protection Agency (EPA) must conduct a review to examine applicable regulations in this regard. On a related note, permits are often issued from the Department of Health, and the HbB is subject to regular inspections if it sells food items to the public or retail stores. Additionally, more licenses may be required for food production activities practiced from the home, which will be addressed later on.
• Sign Permits: In some geographic areas, there may be separate instructions for distinguishing signs for HbBs, specifying the type, size, and location of the signs and the information written on them.
• Construction Permits: If an HbB owner intends to make structural changes to the inner perimeter of his/ her home with the goal of hosting an HbB, architectural and environmental permits are required to do so and are issued by the Building and Planning Department.
2.3 Regulation of Home-Based Food Preparation ActivitiesCertain activities practiced in the home have witnessed widespread interest in the United States, with food preparation being at the forefront. In this regard, more than 33 US states have issued a legislative framework to organize “home-made food preparation activities.” Examples of this include the state of California, which on 1 January 2013 issued the California Homemade Food Act. California, as do the remainder of US states, suffers from increasing obesity among its citizens in addition to epidemiological diseases associated with obesity. This phenomenon can be reduced by providing fresh, healthy food options alongside the growing movement to support food production processes at home via small businesses using their kitchens to sell to the public (California Legislative Information, 2013).
The framework law of the state of California divides home-based food preparation businesses into two categories (California Legislative Information, 2013) as follows:
• Class A: Includes home-based food preparation production processes for direct sale only.
• Class B: Includes home-based food preparation production processes for sale, directly or indirectly, through a third party (for example, a retail store)
The framework law defines “direct sales” as commercial transactions that take place between the producer of the home-made food and the final consumer, wherein the consumer purchases the home-made food directly from its producer. Examples of this include transactions at bazaars and seasonal exhibitions, and the orders are delivered from the business location directly to the consumer. In contrast, indirect sale reflects commercial transactions that take place between the home-made food producer and a third-party broker who then sells the product via retail to the consumer. Here, the consumer purchases foods made by the producer through a retail merchant.
According to the framework law, HbB owners that fall into the first category may only conduct their business if the HbB is registered with the Local Enforcement Agency (which is responsible for enforcing the law). This agency approves each item on the checklist specified for this purpose in addition to the HbB owners’ personal certificate. The goal of this checklist is to compel the HbB owner to comply with home-made food production requirements as specified under the framework law, which are as follows (California Legislative Information, 2013):
• No work be undertaken to prepare, package, or deliver food from the home’s kitchen simultaneously with any other household activity, such as preparing food for the family, washing clothing or dishes, cleaning the home or kitchen, participating in leisure activities, or receiving visitors
• No infants, small children, or pets may be in the kitchen during the process of preparing, packaging, or delivering food allocated for sale.
• Tools and cooking equipment shall be kept clean and in good condition.
• Cleanliness shall be maintained for all surfaces that come into contact with food as well as equipment and tools used in the cooking process, and all inputs must be clean and subjected to the necessary cleaning processes before use.
• Food preparation and storage areas as well as equipment and tools utilized during the production process must be kept free of rodents or insects.
• Smoking must be prohibited in the areas of the home allocated for food preparation, packaging, or delivery processes, in addition to food and cooking tool and equipment areas.
It is worth noting that the Local Enforcement Agency issues a registration number for each HbB that practices food preparation activities in the home with a Class A classification after making sure that the business fulfills the requirements described above. Class A HbBs are not subject to initial or regular inspection. However, a Local Enforcement Agency representative may conduct inspection procedures for this HbB if a complaint is registered by a consumer, as this would form a reason to doubt the integrity of the home-based food preparation production process. However, this procedure will be conducted exclusively for HbBs registered in the agency’s records and possess a Registration Number.
Regarding Class B, where home-made food is sold directly or indirectly, the HbB must receive a permit from the Local Enforcement Agency reflecting its approval for the business to do so. However, these HbBs also incur all of the requirements which Class A HbBs are subject to—as referred to above—in addition to the following (California Legislative Information, 2013):
• Any person with a contagious disease shall refrain from having a presence in the production, packaging, and delivery of food prepared at the home.
• The hands of the person responsible for processing, packaging, and delivering food prepared at home shall remain clean, and washed well before those processes begin.
• Water used during food preparation operations must be safe, and all drinking water standards must be taken into account. This includes all water used to wash, sterilize, and dry food ingredients, tools, and equipment used in the production process, as well as washing, sterilizing, and drying hands involved in the production process.
• The person who prepares and processes food must complete a four-hour Food Processor Course conducted by the California Department of Public Health. The goal of this is to emphasize the protection of public health operations during the first three months after the permit is issued. The Department, in cooperation with the Agency, also participates in inspection campaigns to ensure that those HbBs comply with the health regulations included in the training course.
• Labeling all products resulting from the food preparation process in the home safely and in accordance with the Federal Food, Drug, and Cosmetic Act. Additionally, the name must be accompanied by other information, including: “Made in my kitchen,” the name of the business which manufactures the product, the registration or permit number, the name of the Local Enforcement Agency which issued the number, and the ingredients used to produce the food product.
1312 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
In some cases, air and water pollution resulting from the HbB is also taken into account, and the Environmental Protection Agency (EPA) must conduct a review to examine applicable regulations in this regard. On a related note, permits are often issued from the Department of Health, and the HbB is subject to regular inspections if it sells food items to the public or retail stores. Additionally, more licenses may be required for food production activities practiced from the home, which will be addressed later on.
• Sign Permits: In some geographic areas, there may be separate instructions for distinguishing signs for HbBs, specifying the type, size, and location of the signs and the information written on them.
• Construction Permits: If an HbB owner intends to make structural changes to the inner perimeter of his/ her home with the goal of hosting an HbB, architectural and environmental permits are required to do so and are issued by the Building and Planning Department.
2.3 Regulation of Home-Based Food Preparation ActivitiesCertain activities practiced in the home have witnessed widespread interest in the United States, with food preparation being at the forefront. In this regard, more than 33 US states have issued a legislative framework to organize “home-made food preparation activities.” Examples of this include the state of California, which on 1 January 2013 issued the California Homemade Food Act. California, as do the remainder of US states, suffers from increasing obesity among its citizens in addition to epidemiological diseases associated with obesity. This phenomenon can be reduced by providing fresh, healthy food options alongside the growing movement to support food production processes at home via small businesses using their kitchens to sell to the public (California Legislative Information, 2013).
The framework law of the state of California divides home-based food preparation businesses into two categories (California Legislative Information, 2013) as follows:
• Class A: Includes home-based food preparation production processes for direct sale only.
• Class B: Includes home-based food preparation production processes for sale, directly or indirectly, through a third party (for example, a retail store)
The framework law defines “direct sales” as commercial transactions that take place between the producer of the home-made food and the final consumer, wherein the consumer purchases the home-made food directly from its producer. Examples of this include transactions at bazaars and seasonal exhibitions, and the orders are delivered from the business location directly to the consumer. In contrast, indirect sale reflects commercial transactions that take place between the home-made food producer and a third-party broker who then sells the product via retail to the consumer. Here, the consumer purchases foods made by the producer through a retail merchant.
According to the framework law, HbB owners that fall into the first category may only conduct their business if the HbB is registered with the Local Enforcement Agency (which is responsible for enforcing the law). This agency approves each item on the checklist specified for this purpose in addition to the HbB owners’ personal certificate. The goal of this checklist is to compel the HbB owner to comply with home-made food production requirements as specified under the framework law, which are as follows (California Legislative Information, 2013):
• No work be undertaken to prepare, package, or deliver food from the home’s kitchen simultaneously with any other household activity, such as preparing food for the family, washing clothing or dishes, cleaning the home or kitchen, participating in leisure activities, or receiving visitors
• No infants, small children, or pets may be in the kitchen during the process of preparing, packaging, or delivering food allocated for sale.
• Tools and cooking equipment shall be kept clean and in good condition.
• Cleanliness shall be maintained for all surfaces that come into contact with food as well as equipment and tools used in the cooking process, and all inputs must be clean and subjected to the necessary cleaning processes before use.
• Food preparation and storage areas as well as equipment and tools utilized during the production process must be kept free of rodents or insects.
• Smoking must be prohibited in the areas of the home allocated for food preparation, packaging, or delivery processes, in addition to food and cooking tool and equipment areas.
It is worth noting that the Local Enforcement Agency issues a registration number for each HbB that practices food preparation activities in the home with a Class A classification after making sure that the business fulfills the requirements described above. Class A HbBs are not subject to initial or regular inspection. However, a Local Enforcement Agency representative may conduct inspection procedures for this HbB if a complaint is registered by a consumer, as this would form a reason to doubt the integrity of the home-based food preparation production process. However, this procedure will be conducted exclusively for HbBs registered in the agency’s records and possess a Registration Number.
Regarding Class B, where home-made food is sold directly or indirectly, the HbB must receive a permit from the Local Enforcement Agency reflecting its approval for the business to do so. However, these HbBs also incur all of the requirements which Class A HbBs are subject to—as referred to above—in addition to the following (California Legislative Information, 2013):
• Any person with a contagious disease shall refrain from having a presence in the production, packaging, and delivery of food prepared at the home.
• The hands of the person responsible for processing, packaging, and delivering food prepared at home shall remain clean, and washed well before those processes begin.
• Water used during food preparation operations must be safe, and all drinking water standards must be taken into account. This includes all water used to wash, sterilize, and dry food ingredients, tools, and equipment used in the production process, as well as washing, sterilizing, and drying hands involved in the production process.
• The person who prepares and processes food must complete a four-hour Food Processor Course conducted by the California Department of Public Health. The goal of this is to emphasize the protection of public health operations during the first three months after the permit is issued. The Department, in cooperation with the Agency, also participates in inspection campaigns to ensure that those HbBs comply with the health regulations included in the training course.
• Labeling all products resulting from the food preparation process in the home safely and in accordance with the Federal Food, Drug, and Cosmetic Act. Additionally, the name must be accompanied by other information, including: “Made in my kitchen,” the name of the business which manufactures the product, the registration or permit number, the name of the Local Enforcement Agency which issued the number, and the ingredients used to produce the food product.
1514 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
It is worth noting that according to the framework law on food prepared in the home, the Local Enforcement Agency conducts an initial inspection before issuing a license number for the home-made food preparation business which engages in direct or indirect sale in order to ensure compliance with the requirements specified by the law. The business will also be the subject of an annual inspection that takes place at least once per year through agency representatives to ensure continuous compliance with those requirements.
For all businesses belonging to either of the two classes, the registration or permit is valid as long as it is issued and may not be transferred to another individual. Thus it is only valid for the person under whose name it was issued, for the geographic location specified, and for producing the foods listed on the document. Sales must take place in the manner described as well. It is also worth noting that the state of California has instituted a maximum ceiling for the sales value of an existing home-based food preparation business at $35,000 per year in 2013. In 2014 this figure was increased to $45,000 and then was modified to $50,000 effective from the start of 2015. The framework law also indicated that home-based food preparation businesses can utilize a full time employee, in addition to family members (California Legislative Information, 2013)
2.4 HbB CompetitionsStriving to incentivize efforts to develop HbBs, the U.S. Small Business Administration organizes an annual competition in each state to choose an “HbB Hero.” The goal of the competition is to value excellence and innovation among members of the Administration’s business network. The competition is open to any individual who fulfills their obligations to improve the climate for HbBs, which may be a small enterprise owner or an individual that does not own a business, guided by the four following fields (SBA, 2015):
• Undertaking volunteer efforts to improve the HbB environment.
• Training efforts for entrepreneurs and developing general policies and associated tools (like the law, legislation, and institutions), or developing business and financial plans designed specifically for HbBs.
• A clear interest in HbBs, whether it be through owning a successful existing or prior HbB.
• Achieving measurable accomplishments in improving performance and developing HBBs, and examples of this include supporting public policies or expanding programs, projects, and initiatives directed at this type of business.
It is worth noting that the regulatory framework for the competition specifies all detailed information required from award candidates.
On a related note, the Startup Nation gateway organizes an annual competition to choose the top 100 performing HbBs in the United States through the Startup Nation Home-Based 100 Competition. The competition includes ten categories of HbBs, and the best business is chosen from among the top HbB in each category. The competition covers the following categories (Startup Nation, 2014):
• Most Innovative: Pioneers in introducing innovative products and services in the market.
• Boomer Back to Business: Businesses that endure for a long period of time and now erform more dynamically than ever.
• Greenest: Businesses with a positive environmental or social impact.
• Yummiest: The yummiest food businesses (food and beverages).
• Wackiest: The funniest or most festive businesses (in the fields of entertainment and communication.
• Savviest in Social Media: Businesses that were able to achieve a record in transforming chatting via social media networks into business opportunities.
• Recession Busters: While everyone fights for their lives, these businesses flourish and grow in times of economic recession.
• Most Slacker Friendly: The business which proves its presence day after day, in contrast to the typical business lifestyle.
• Most Glamourous: Businesses foundationally based on attraction and impressions in its essence, for example, businesses operating in the fields of fashion and celebration, event, conference, and exhibition organizing.
• The winner of the majority of votes of the jury.
In this manner the previous discussion shed light on the main issues associated with organizing and encouraging HbBs in the United States of America. In this context, the following can be extracted:
• Formal Registration: HbBs are considered a (legal) formal business model, must be registered formally, and are subjected to the majority of laws and regulatory regulations applied to other businesses that have a stable headquarters other than the home. This approach maintains the principle of competitiveness among business institutions and organizes all economic activities, both inside and outside the home.
• Special Licenses and Regulatory Frameworks: Taking into account protecting both the public and consumers’ rights with respect to HbB products and services, American legislators have compelled HbBs to obtain a number of licenses and additional regulatory rules associated which practicing in residential areas. This legislation pays special attention to HbBs based on preparing food at home, as some US states have devoted a separate framework law to this field.
• Preferential Treatment: As HbBs practice their activities in the home, legislators have granted HbBs a preferential treatment with respect to taxes imposed.
• Falling under the Definition of a Small Business: In order to encourage HbBs, as they represent a tool for social and economic development, they are categorized as small businesses which also fall within the purview of the Small Business Administration. The Small Business Administration is the official body responsible for developing small businesses in the United States of America.
• Encouraging Excellence: As is the case for small businesses with a stable headquarters, initiatives to encourage and appreciate excellence among HbBs on one hand were examined, and encouraging and appreciating those in charge of developing and improving the environment for HbBs on the other.
1514 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
It is worth noting that according to the framework law on food prepared in the home, the Local Enforcement Agency conducts an initial inspection before issuing a license number for the home-made food preparation business which engages in direct or indirect sale in order to ensure compliance with the requirements specified by the law. The business will also be the subject of an annual inspection that takes place at least once per year through agency representatives to ensure continuous compliance with those requirements.
For all businesses belonging to either of the two classes, the registration or permit is valid as long as it is issued and may not be transferred to another individual. Thus it is only valid for the person under whose name it was issued, for the geographic location specified, and for producing the foods listed on the document. Sales must take place in the manner described as well. It is also worth noting that the state of California has instituted a maximum ceiling for the sales value of an existing home-based food preparation business at $35,000 per year in 2013. In 2014 this figure was increased to $45,000 and then was modified to $50,000 effective from the start of 2015. The framework law also indicated that home-based food preparation businesses can utilize a full time employee, in addition to family members (California Legislative Information, 2013)
2.4 HbB CompetitionsStriving to incentivize efforts to develop HbBs, the U.S. Small Business Administration organizes an annual competition in each state to choose an “HbB Hero.” The goal of the competition is to value excellence and innovation among members of the Administration’s business network. The competition is open to any individual who fulfills their obligations to improve the climate for HbBs, which may be a small enterprise owner or an individual that does not own a business, guided by the four following fields (SBA, 2015):
• Undertaking volunteer efforts to improve the HbB environment.
• Training efforts for entrepreneurs and developing general policies and associated tools (like the law, legislation, and institutions), or developing business and financial plans designed specifically for HbBs.
• A clear interest in HbBs, whether it be through owning a successful existing or prior HbB.
• Achieving measurable accomplishments in improving performance and developing HBBs, and examples of this include supporting public policies or expanding programs, projects, and initiatives directed at this type of business.
It is worth noting that the regulatory framework for the competition specifies all detailed information required from award candidates.
On a related note, the Startup Nation gateway organizes an annual competition to choose the top 100 performing HbBs in the United States through the Startup Nation Home-Based 100 Competition. The competition includes ten categories of HbBs, and the best business is chosen from among the top HbB in each category. The competition covers the following categories (Startup Nation, 2014):
• Most Innovative: Pioneers in introducing innovative products and services in the market.
• Boomer Back to Business: Businesses that endure for a long period of time and now erform more dynamically than ever.
• Greenest: Businesses with a positive environmental or social impact.
• Yummiest: The yummiest food businesses (food and beverages).
• Wackiest: The funniest or most festive businesses (in the fields of entertainment and communication.
• Savviest in Social Media: Businesses that were able to achieve a record in transforming chatting via social media networks into business opportunities.
• Recession Busters: While everyone fights for their lives, these businesses flourish and grow in times of economic recession.
• Most Slacker Friendly: The business which proves its presence day after day, in contrast to the typical business lifestyle.
• Most Glamourous: Businesses foundationally based on attraction and impressions in its essence, for example, businesses operating in the fields of fashion and celebration, event, conference, and exhibition organizing.
• The winner of the majority of votes of the jury.
In this manner the previous discussion shed light on the main issues associated with organizing and encouraging HbBs in the United States of America. In this context, the following can be extracted:
• Formal Registration: HbBs are considered a (legal) formal business model, must be registered formally, and are subjected to the majority of laws and regulatory regulations applied to other businesses that have a stable headquarters other than the home. This approach maintains the principle of competitiveness among business institutions and organizes all economic activities, both inside and outside the home.
• Special Licenses and Regulatory Frameworks: Taking into account protecting both the public and consumers’ rights with respect to HbB products and services, American legislators have compelled HbBs to obtain a number of licenses and additional regulatory rules associated which practicing in residential areas. This legislation pays special attention to HbBs based on preparing food at home, as some US states have devoted a separate framework law to this field.
• Preferential Treatment: As HbBs practice their activities in the home, legislators have granted HbBs a preferential treatment with respect to taxes imposed.
• Falling under the Definition of a Small Business: In order to encourage HbBs, as they represent a tool for social and economic development, they are categorized as small businesses which also fall within the purview of the Small Business Administration. The Small Business Administration is the official body responsible for developing small businesses in the United States of America.
• Encouraging Excellence: As is the case for small businesses with a stable headquarters, initiatives to encourage and appreciate excellence among HbBs on one hand were examined, and encouraging and appreciating those in charge of developing and improving the environment for HbBs on the other.
1716 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
3. CanadaHbBs are considered to be of the fastest-growing business model in all provinces of Canada. This phenomenon has been accompanied by a change in the nature and approach of HbB owners as well. In the past, HbBs were attractive opportunities for housewives or workers facing a transitional phase in their careers as well as retirees, hobbyists, and those with special needs. However, the emergence of e-commerce applications has generated many new professions which represent opportunities to establish HbBs, an example of which can be found in website and computer program designers. Moreover, recent studies emphasize the flexibility of HbBs in keeping pace with changes in information technology and communications when compared to conventional (non-home-based) companies.
All this has been followed by concerned authorities taking a growing interest in HbBs, wherein local agencies are developing legislation, regulations, and restrictions that organize HbBs in order to keep pace with their nature. Insurance companies are innovating new forms of insurance services appropriate for HbBs while simultaneously facilitating borrowing to provide the funding required to initiate the businesses and help continue their activities (Ministry of Competition, Science, and Enterprise et al., 2002: 1)
The following discussion aims to shed light on some issues governing HbB activities in the Canadian experience, in which HbBs are considered formal (registered) businesses (as is the case for the American experience). The discussion is focused on revealing types of HbB legal structures, the licenses and permits required, and insurance.
3.1 HbB Legal StructuresThe legislative framework governing HbBs in the Canadian experience involves a number of legal matters prior to initiating and operating a business. At the start, the entrepreneur shall choose the legal structure that best fits his/her HbB and personal circumstances. In this regard, four models for the legal structure of HbBs may be examined, each with its own advantages and considerations as follows (Ottawa Documents, undated: 5-6):
• Sole Proprietorship: This represents the simplest and most common type of company among those who are self-employed. Ownership and operation of this company goes back to one person and the business may carry his/her name. As the company grows and develops, it may be converted from a sole proprietorship into another legal form. The company owner is bound to provide commercial revenue records and bear the personal income tax for his/ her company.
• Partnership: This model is associated with building a partnership between two or more individuals in an investment, which results in a legally binding commercial relationship wherein each bears all risks and responsibilities for the business. Each partner becomes responsible for the actions of other partners. A name must be chosen for the company – and it may not bear the name of the owner as is the case for a sole proprietorship – with an obligation to provide all required information for each partner. As is the case for a sole proprietorship, each partner is subject to the personal income tax.
• Corporation – Limited Company: This refers to a company with a legal structure separate from the entity of the owner(s)/ shareholder(s), forming a more complicated legal structure, although it allows for a greater degree of flexibility with regard to investments and profits are distributed to shareholders in the form of payments. Assets are owned by the company and not by individuals, and can be registered at the provincial or federal level. Those companies shall maintain detailed accounting records as they are subject to a tax on companies on an annual basis.
1716 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
3. CanadaHbBs are considered to be of the fastest-growing business model in all provinces of Canada. This phenomenon has been accompanied by a change in the nature and approach of HbB owners as well. In the past, HbBs were attractive opportunities for housewives or workers facing a transitional phase in their careers as well as retirees, hobbyists, and those with special needs. However, the emergence of e-commerce applications has generated many new professions which represent opportunities to establish HbBs, an example of which can be found in website and computer program designers. Moreover, recent studies emphasize the flexibility of HbBs in keeping pace with changes in information technology and communications when compared to conventional (non-home-based) companies.
All this has been followed by concerned authorities taking a growing interest in HbBs, wherein local agencies are developing legislation, regulations, and restrictions that organize HbBs in order to keep pace with their nature. Insurance companies are innovating new forms of insurance services appropriate for HbBs while simultaneously facilitating borrowing to provide the funding required to initiate the businesses and help continue their activities (Ministry of Competition, Science, and Enterprise et al., 2002: 1)
The following discussion aims to shed light on some issues governing HbB activities in the Canadian experience, in which HbBs are considered formal (registered) businesses (as is the case for the American experience). The discussion is focused on revealing types of HbB legal structures, the licenses and permits required, and insurance.
3.1 HbB Legal StructuresThe legislative framework governing HbBs in the Canadian experience involves a number of legal matters prior to initiating and operating a business. At the start, the entrepreneur shall choose the legal structure that best fits his/her HbB and personal circumstances. In this regard, four models for the legal structure of HbBs may be examined, each with its own advantages and considerations as follows (Ottawa Documents, undated: 5-6):
• Sole Proprietorship: This represents the simplest and most common type of company among those who are self-employed. Ownership and operation of this company goes back to one person and the business may carry his/her name. As the company grows and develops, it may be converted from a sole proprietorship into another legal form. The company owner is bound to provide commercial revenue records and bear the personal income tax for his/ her company.
• Partnership: This model is associated with building a partnership between two or more individuals in an investment, which results in a legally binding commercial relationship wherein each bears all risks and responsibilities for the business. Each partner becomes responsible for the actions of other partners. A name must be chosen for the company – and it may not bear the name of the owner as is the case for a sole proprietorship – with an obligation to provide all required information for each partner. As is the case for a sole proprietorship, each partner is subject to the personal income tax.
• Corporation – Limited Company: This refers to a company with a legal structure separate from the entity of the owner(s)/ shareholder(s), forming a more complicated legal structure, although it allows for a greater degree of flexibility with regard to investments and profits are distributed to shareholders in the form of payments. Assets are owned by the company and not by individuals, and can be registered at the provincial or federal level. Those companies shall maintain detailed accounting records as they are subject to a tax on companies on an annual basis.
1918 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• Business Cooperative: This is considered a special type of commercial company, where each individual (shareholder) is a part of company business and has one vote in the process of company decision-making. The company may specialize in providing a single product or produce a variety of products that are marketed later en masse. All individuals (shareholders) work from their homes and one home is designated as the main headquarters of the company. This type of company is subject to the Cooperative Act which specifies the requirements of establishing a business cooperative in detail.
3.2 General Permits and LicensesIt can be stated that many legal issues are associated with starting an HbB, and a number of laws and pieces of legislation ensure they are operated in a suitable manner. HbBs must comply with zoning laws, local ordinances, and restrictions on real estate use, as is the case in the American experience. Likewise, some of these businesses must obtain permits for buildings, and the HbB owner must select and register an HbB name.
In the city of Ottawa, for example, the regulations organizing HbBs are contained within the Licenses and Permits By-Law, and Article 127 is concerned with HbBs in urban areas. Article 128 addresses HbBs in the rural countryside and agricultural areas (City of Ottawa, 2014: B) while Article 128 discusses HbBs in villages (City of Ottawa, 2014: C)
According to the Licenses and Permits By-Law applied in the city of Ottawa, Article 127 is concerned with HbBs in urban areas, wherein it is permitted to operate HbBs in any residential unit, secondary residential unit, room within a home, or any area permitted for residential use, taking the following into account (City of Ottawa, 2014: A)
• The HbB must not represent a nuisance by causing noise, odors, dust, fumes, vibrations, radiation, a glow, or traffic jams.
• The HbB must not become a source of risk associated with a fire, construction, or any health risks.
• The HbB must not emit frequencies that interfere with radio, television, and other communications.
• The HbB must be operated by one or two occupants of the home.
Various other aspects regulating HbBs in Ottawa are as follows (City of Ottawa, 2014: A)
• Multiple Businesses in the Same Housing Unit: More than one HbB may be operated within one housing unit as long as the total area occupied by the business not exceed 25% of floor space or 28 square meters of the house, whichever is greater. If the HbB is located in the garage, the total area of the business (businesses) must not exceed 54 square meters, ensuring that the parking spaces required for housing unit residents are available. If the business is operated from one room within a home, there is no limit to the space allocated to the business, but in this case no business may be conducted outside of this room in common areas within the building.
• Restrictions on Using Labor: Only one employee who is not a resident of the home may participate in operating each business and utilizing an employee is prohibited if the HbBs are operated from a secondary unit within the home, from a room within the dwelling, or in homes with low ceilings. Any visitors or clients are prohibited from being present if the HbB is operated from a secondary unit in the home, from a room within the home, or in homes with low ceilings.
• Sale of Household Products Only: If the HbB conducts sale transactions onsite, it shall only conduct transactions for products it produced within the home. Likewise, the business is permitted
to engage in marketing via phone or email provided that the products are delivered directly to the client without the intervention of an intermediary.
• Organizing signs and vehicle parking: If the HbB is in need of vehicle parking spaces, designated waiting spaces on the surrounding road may be utilized. The presence of any signs or banners for the HbB on the street is prohibited.
• Prohibition of Storage Activities: HbBs are prohibited from working in the field of storing cars, buses, boats, or any other type of vehicle. Storing HbB products or any inputs that the HbB depends on outside the home is also prohibited.
• Organizing Care Activities: If an HbB conducts daycare activities, it is authorized to host a maximum of five individuals in the main housing unit only (and they may not be hosted in any secondary unit or room)
• Organizing Non-Professional Activities: Regarding HbBs that practice non-professional activities, they are permitted to practice a limited number of activities which require a license from the municipality to protect public health and safety, namely: electronics and electrical contracting, plumbing work, and finally taxis and driving, which must take place free of intermediaries and utilize a maximum of only two vehicles.
On a related note, the HbB owner shall protect his/ her ownership rights by using copyright, trademarks, and patents where applicable.
3.3 Permits and Licenses According to Economic ActivityAdditionally, the Canadian experience suggests that HbBs must obtain licenses, permits, and certificates related to the nature of the business’s activities in a manner similar to non-home-based businesses. It is worth noting that non-professional activities authorized for HbBs to practice may vary across different geographic regions within Canada’s provinces. The same is true for the restrictions imposed on these businesses, and thus HbB owners must examine the laws and ordinances organizing HbBs in the geographic area which he or she resides.
In a special reference to food processing activities in the home, the Canadian government has added a special section of legislation called the Food Premises Regulation to the framework Public Health Act in February 2013. This legislation applies to any premises in which food materials are prepared for the purpose of sale, whether it be within homes, separate shops, hotels, and so on. The legislation contains provisions relating to food preparation places, approvals and permits required for preparing and storing foods and associated processes, training, food sources and protection, machinery and equipment used for processing and storage, employees, and the food safety department (British Columbia Laws, 2014).
On a related note, the departments of agriculture, fisheries and aquaculture, health, and social services across Canada’s provinces conducted a set of consultations amongst themselves in order to arrive at a set of guiding principles for HbBs food preparation practices. The principles represent the minimum level of effectiveness for individuals that wish to conduct home-based activities related to manufacturing and/or selling food materials to the public, and help protect the public interest of the consumer. Despite a failure to issue these guidelines under a legal text, it was agreed that Environmental Health Services representatives have the authority to monitor and follow-up on compliance with these guidelines. Some of the guidelines are contained in the guide are as follows (Environmental Health, undated):
1918 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• Business Cooperative: This is considered a special type of commercial company, where each individual (shareholder) is a part of company business and has one vote in the process of company decision-making. The company may specialize in providing a single product or produce a variety of products that are marketed later en masse. All individuals (shareholders) work from their homes and one home is designated as the main headquarters of the company. This type of company is subject to the Cooperative Act which specifies the requirements of establishing a business cooperative in detail.
3.2 General Permits and LicensesIt can be stated that many legal issues are associated with starting an HbB, and a number of laws and pieces of legislation ensure they are operated in a suitable manner. HbBs must comply with zoning laws, local ordinances, and restrictions on real estate use, as is the case in the American experience. Likewise, some of these businesses must obtain permits for buildings, and the HbB owner must select and register an HbB name.
In the city of Ottawa, for example, the regulations organizing HbBs are contained within the Licenses and Permits By-Law, and Article 127 is concerned with HbBs in urban areas. Article 128 addresses HbBs in the rural countryside and agricultural areas (City of Ottawa, 2014: B) while Article 128 discusses HbBs in villages (City of Ottawa, 2014: C)
According to the Licenses and Permits By-Law applied in the city of Ottawa, Article 127 is concerned with HbBs in urban areas, wherein it is permitted to operate HbBs in any residential unit, secondary residential unit, room within a home, or any area permitted for residential use, taking the following into account (City of Ottawa, 2014: A)
• The HbB must not represent a nuisance by causing noise, odors, dust, fumes, vibrations, radiation, a glow, or traffic jams.
• The HbB must not become a source of risk associated with a fire, construction, or any health risks.
• The HbB must not emit frequencies that interfere with radio, television, and other communications.
• The HbB must be operated by one or two occupants of the home.
Various other aspects regulating HbBs in Ottawa are as follows (City of Ottawa, 2014: A)
• Multiple Businesses in the Same Housing Unit: More than one HbB may be operated within one housing unit as long as the total area occupied by the business not exceed 25% of floor space or 28 square meters of the house, whichever is greater. If the HbB is located in the garage, the total area of the business (businesses) must not exceed 54 square meters, ensuring that the parking spaces required for housing unit residents are available. If the business is operated from one room within a home, there is no limit to the space allocated to the business, but in this case no business may be conducted outside of this room in common areas within the building.
• Restrictions on Using Labor: Only one employee who is not a resident of the home may participate in operating each business and utilizing an employee is prohibited if the HbBs are operated from a secondary unit within the home, from a room within the dwelling, or in homes with low ceilings. Any visitors or clients are prohibited from being present if the HbB is operated from a secondary unit in the home, from a room within the home, or in homes with low ceilings.
• Sale of Household Products Only: If the HbB conducts sale transactions onsite, it shall only conduct transactions for products it produced within the home. Likewise, the business is permitted
to engage in marketing via phone or email provided that the products are delivered directly to the client without the intervention of an intermediary.
• Organizing signs and vehicle parking: If the HbB is in need of vehicle parking spaces, designated waiting spaces on the surrounding road may be utilized. The presence of any signs or banners for the HbB on the street is prohibited.
• Prohibition of Storage Activities: HbBs are prohibited from working in the field of storing cars, buses, boats, or any other type of vehicle. Storing HbB products or any inputs that the HbB depends on outside the home is also prohibited.
• Organizing Care Activities: If an HbB conducts daycare activities, it is authorized to host a maximum of five individuals in the main housing unit only (and they may not be hosted in any secondary unit or room)
• Organizing Non-Professional Activities: Regarding HbBs that practice non-professional activities, they are permitted to practice a limited number of activities which require a license from the municipality to protect public health and safety, namely: electronics and electrical contracting, plumbing work, and finally taxis and driving, which must take place free of intermediaries and utilize a maximum of only two vehicles.
On a related note, the HbB owner shall protect his/ her ownership rights by using copyright, trademarks, and patents where applicable.
3.3 Permits and Licenses According to Economic ActivityAdditionally, the Canadian experience suggests that HbBs must obtain licenses, permits, and certificates related to the nature of the business’s activities in a manner similar to non-home-based businesses. It is worth noting that non-professional activities authorized for HbBs to practice may vary across different geographic regions within Canada’s provinces. The same is true for the restrictions imposed on these businesses, and thus HbB owners must examine the laws and ordinances organizing HbBs in the geographic area which he or she resides.
In a special reference to food processing activities in the home, the Canadian government has added a special section of legislation called the Food Premises Regulation to the framework Public Health Act in February 2013. This legislation applies to any premises in which food materials are prepared for the purpose of sale, whether it be within homes, separate shops, hotels, and so on. The legislation contains provisions relating to food preparation places, approvals and permits required for preparing and storing foods and associated processes, training, food sources and protection, machinery and equipment used for processing and storage, employees, and the food safety department (British Columbia Laws, 2014).
On a related note, the departments of agriculture, fisheries and aquaculture, health, and social services across Canada’s provinces conducted a set of consultations amongst themselves in order to arrive at a set of guiding principles for HbBs food preparation practices. The principles represent the minimum level of effectiveness for individuals that wish to conduct home-based activities related to manufacturing and/or selling food materials to the public, and help protect the public interest of the consumer. Despite a failure to issue these guidelines under a legal text, it was agreed that Environmental Health Services representatives have the authority to monitor and follow-up on compliance with these guidelines. Some of the guidelines are contained in the guide are as follows (Environmental Health, undated):
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• A layout of the house/floor in which food material preparation activities are planned to be conducted must be provided to an environmental health officer for approval before proceeding with processing.
• The food preparation site in the home must be equipped with equipment and furnishings free of any specifications that damage health or negatively impact the safety or storage of prepared foods and their components.
• All food products must be obtained from an approved source subject to government inspection. Food must be stored or prepared in a place completely separate from the place designated for individual living space in the home, and the material of the floors, walls, and cabinets must be easy to clean
• A number of utilities must be present at the site where food materials are prepared, including: an adequate supply of potable hot and cold water in compliance with Canadian guidelines for potable water quality, as well as separate facilities for staff hand-washing close to the site where food is processed, a suitable area for cooling and preparation in the area to store perishable foods, and spaces suitable and sufficient for maintaining hot, perishable food materials.
• Shelves suitable for storing food with a minimum height of 15 centimeters above the ground must be present
• No utensil with any cracks or fissures may be used to prepare or store food materials, although they may be used after they are sterilized effectively.
• Provision of an acceptable level of sanitation facilities in all throughout the food preparation site in order to prevent any contamination of prepared or stored foods.
• No individual present in the area allocated to food material preparation or storage may allow for live birds or animals to be present or for smoking to take place.
• Frozen foods must be defrosted in accordance with the instructions for doing so, whether it be by placing the foods in the refrigerator or by immersing them in continuously flowing cold water.
• Adequate ventilation must be present and allow for smoke, gases, and odors to exit.
• Adequate containers must be provided for trash, which must be maintained and kept clean, and garbage must be disposed of properly on a daily basis.
• Each person utilizing cooking equipment, appliances, and food material during preparation and storage operations must maintain cleanliness, cover his or her head adequately, wear clean garments, and be free of all contagious or dermal diseases.
3.4 Tax ReductionsThe benefits enjoyed by a business owner if he/she manages a business from the home includes obtaining deductions or reductions for the applicable income tax. The tax deductions that the HbB owner receives are as follows (Susan Ward, 2015):
• Car Expenses: Many Canadian HbB owners use their private cars as the vehicle through which business activities are conducted. The car is a matter of the business according to tax legislation, wherein it is considered within the HbB’s assets as the business assumes car expenses. This is in addition to a deduction for a portion of fuel, license, insurance, repair, and maintenance costs in addition to interest deduction on the sums borrowed from the bank to purchase a car or any other means of transportation which the HbB relies on to obtain income. The cost of renting a car used for the purposes of the business can also be deducted according to Canada Revenue Agency (Canada Revenue Agency, CRA).
In order to obtain a deduction for a portion of private car expenses when used for the purpose of the business in addition to personal use, the Canada Revenue Agency recommends that a record be maintained of the total kilometers the car travels for business purposes. This information is relied upon to ascertain the extent of the deduction for current business expenses.
• Insurance: All traditional commercial insurance installments assumed by any building, tool, or equipment used by the HbB can be deducted. It is worth noting that insuring HbBs forms a main area of interest as will be addressed later.
• Office Expenses: Even in the event that the office/HbB represents a portion of the home’s kitchen, office expenses may be deducted as business costs. However a distinction is made between office expenses (an example of which includes pens, stamps, printing paper, and so on) and “depreciable assets” (an example of which includes file cabinets, printers, and other items included under the regulations pertaining to capital cost allowance).
As depreciable assets amortize over time, the HbB requests a deduction for a portion of the original costs on an annual basis so that it is deducted from the total taxable amount.
• Mortgage and Property Tax Interest: If the HbB owner possesses a mortgage for the home in which he/she resides and manages the activities of his or her business, they may request that a portion of the interest on the mortgage be added within the expenses of using the home as a commercial business if business complies with the requirements for these deductions. This may take place as long as the home is the main headquarters of the work of the business, and is used to acquire income on a regular and ongoing basis in order to meet customer needs. It is also possible to request that real estate tax be considered a portion of HbB expenses.
• Other Expenses: Along with the expenses referred to above, a portion of which may be assumed by the HbB and come to form a tax deduction, there are other expenses incurred by the HbB owner which may be examined. A portion of these expenses may be calculated as private business expenses, including heating, lighting, water, maintenance, cleaning supply, telephone, and Internet subscription costs.
2120 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• A layout of the house/floor in which food material preparation activities are planned to be conducted must be provided to an environmental health officer for approval before proceeding with processing.
• The food preparation site in the home must be equipped with equipment and furnishings free of any specifications that damage health or negatively impact the safety or storage of prepared foods and their components.
• All food products must be obtained from an approved source subject to government inspection. Food must be stored or prepared in a place completely separate from the place designated for individual living space in the home, and the material of the floors, walls, and cabinets must be easy to clean
• A number of utilities must be present at the site where food materials are prepared, including: an adequate supply of potable hot and cold water in compliance with Canadian guidelines for potable water quality, as well as separate facilities for staff hand-washing close to the site where food is processed, a suitable area for cooling and preparation in the area to store perishable foods, and spaces suitable and sufficient for maintaining hot, perishable food materials.
• Shelves suitable for storing food with a minimum height of 15 centimeters above the ground must be present
• No utensil with any cracks or fissures may be used to prepare or store food materials, although they may be used after they are sterilized effectively.
• Provision of an acceptable level of sanitation facilities in all throughout the food preparation site in order to prevent any contamination of prepared or stored foods.
• No individual present in the area allocated to food material preparation or storage may allow for live birds or animals to be present or for smoking to take place.
• Frozen foods must be defrosted in accordance with the instructions for doing so, whether it be by placing the foods in the refrigerator or by immersing them in continuously flowing cold water.
• Adequate ventilation must be present and allow for smoke, gases, and odors to exit.
• Adequate containers must be provided for trash, which must be maintained and kept clean, and garbage must be disposed of properly on a daily basis.
• Each person utilizing cooking equipment, appliances, and food material during preparation and storage operations must maintain cleanliness, cover his or her head adequately, wear clean garments, and be free of all contagious or dermal diseases.
3.4 Tax ReductionsThe benefits enjoyed by a business owner if he/she manages a business from the home includes obtaining deductions or reductions for the applicable income tax. The tax deductions that the HbB owner receives are as follows (Susan Ward, 2015):
• Car Expenses: Many Canadian HbB owners use their private cars as the vehicle through which business activities are conducted. The car is a matter of the business according to tax legislation, wherein it is considered within the HbB’s assets as the business assumes car expenses. This is in addition to a deduction for a portion of fuel, license, insurance, repair, and maintenance costs in addition to interest deduction on the sums borrowed from the bank to purchase a car or any other means of transportation which the HbB relies on to obtain income. The cost of renting a car used for the purposes of the business can also be deducted according to Canada Revenue Agency (Canada Revenue Agency, CRA).
In order to obtain a deduction for a portion of private car expenses when used for the purpose of the business in addition to personal use, the Canada Revenue Agency recommends that a record be maintained of the total kilometers the car travels for business purposes. This information is relied upon to ascertain the extent of the deduction for current business expenses.
• Insurance: All traditional commercial insurance installments assumed by any building, tool, or equipment used by the HbB can be deducted. It is worth noting that insuring HbBs forms a main area of interest as will be addressed later.
• Office Expenses: Even in the event that the office/HbB represents a portion of the home’s kitchen, office expenses may be deducted as business costs. However a distinction is made between office expenses (an example of which includes pens, stamps, printing paper, and so on) and “depreciable assets” (an example of which includes file cabinets, printers, and other items included under the regulations pertaining to capital cost allowance).
As depreciable assets amortize over time, the HbB requests a deduction for a portion of the original costs on an annual basis so that it is deducted from the total taxable amount.
• Mortgage and Property Tax Interest: If the HbB owner possesses a mortgage for the home in which he/she resides and manages the activities of his or her business, they may request that a portion of the interest on the mortgage be added within the expenses of using the home as a commercial business if business complies with the requirements for these deductions. This may take place as long as the home is the main headquarters of the work of the business, and is used to acquire income on a regular and ongoing basis in order to meet customer needs. It is also possible to request that real estate tax be considered a portion of HbB expenses.
• Other Expenses: Along with the expenses referred to above, a portion of which may be assumed by the HbB and come to form a tax deduction, there are other expenses incurred by the HbB owner which may be examined. A portion of these expenses may be calculated as private business expenses, including heating, lighting, water, maintenance, cleaning supply, telephone, and Internet subscription costs.
2322 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
3.5 HbB InsuranceInsuring HbBs is considered one among the other organizational aspects which deserves attention within the Canadian experience. Despite the fact that many individuals who own a private home seem to think that their home insurance also includes their HbBs, yet this perception is incorrect, as HbB activities may invalidate existing home insurance. This is because the insurance is associated with using the home for purposes other than those specified in home insurance documents. Additionally, the “home insurance policy” provides limited coverage of the tools and equipment required for business activities.
The Insurance Bureau of Canada points out that if an HbB is operated, the owner must inform the company insuring the home in which he/she resides to ascertain the limits of the existing insurance policy, as it may not be sufficient to cover all tools and equipment used for home-based economic activities. The HbB owner shall also examine the possibility of obtaining additional coverage to reduce the risk of potential losses if any incidents occur.
Also in this regard, the Insurance Bureau of Canada recommends that HbBs prepare risk management strategies, as such strategies are not only useful for large companies. These strategies formulate a clear and organized approach to determine the risks that the HbB may be vulnerable to, and how to combat them and eliminate any impacts. This helps the owner to ascertain the insurance service(s) required by the HbB. It is worth noting that these strategies are not always complicated and they responding to three specific questions which are as follows: What are the risks that the business may be exposed to, what are the measures that may be undertaken to prevent the occurrence of these damages or minimize their effects, and finally, if they do occur, what are the potential costs? (Insurance Bureau of Canada, 2014).
It is worth noting that the estimated cost of insuring HbBs varies according to the nature of the economic activity, although it usually ranges between $250-500 per year. This value is equal to the cost of losing computer information. Some insurance services for HbBs provide additional insurance worth approximately $2500 per year for commercial property and/or $50 per year to cover the risks of customers slipping or falling on the stairs of the home.
On a related note, the Personal Insurance Company recently made an important additional option available for HbB owners on home insurance policies, among them: coverage for all risks including protecting commercial equipment within and outside of the building, compensation for costs exceeding the insured amount and including the cost of configuring the space, and protection against damages inflicted on property or human injury incurred by any third party who may be injured as a result of business activities (for example, any visitor to the HbB headquarters) (The Credit Union, 2013).
Thus the previous discussion highlighted basic issues connected to HbBs in Canada and the approaches to handling the businesses. In this regard, the following may be concluded:
• Formal Registration: HbBs are considered a formal (normal) business model, wherein they shall be (legally) formally registered and are subject to most laws and regulations applied to other businesses with a fixed headquarters other than the home. This approach means that home based business could remain running from home, however they could be transformed to normal businesses..
• Dedicated Licenses and Regulatory Frameworks: Taking the protection of the public and consumers’ rights from HbB products and services into account, Canadian legislators compelled HbBs to a number of licenses and additional regulations associated with practicing activity in residential areas, as is the case in the American experience.
• Preferential Treatment: As HbBs practice their activities in the home, legislators have granted such businesses preferential treatment with regard to tax rates, wherein a proportion of household expenses may be added to business expenses, which leads to a tax deduction in comparison to non-HbBs.
• Falls under the Definition of SMEs: In the absence of a distinction between HbBs and non-HbBs with respect to registration and regulatory procedures, HbBs fall under the SME sector.
It is worth noting that some Canadian government agencies have focused on developing and publishing guidelines for HbBs including the manual “Starting a Home-based Business: Manual for Success” which was issued in the year 2002. The 141-page manual includes a discussion of a number of issues, among them: is the home the most appropriate location for your business and what products and services will be sold, where the guide indicates possible ideas and how to protect products and understand the legislation and frameworks governing HbBs alongside legal structures for HbBs. The manual also touches on the issue of selling and how to reach vendors, choose markets, and promote the business. The manual also reveals the administrative processes associated with HbBs and strategies that can be adopted to obtain profits. The book includes guidelines on preparing as well financial statements (Ministry of Competition, Science, and Enterprise & Western Economic Diversification Canada, 200).
2322 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
3.5 HbB InsuranceInsuring HbBs is considered one among the other organizational aspects which deserves attention within the Canadian experience. Despite the fact that many individuals who own a private home seem to think that their home insurance also includes their HbBs, yet this perception is incorrect, as HbB activities may invalidate existing home insurance. This is because the insurance is associated with using the home for purposes other than those specified in home insurance documents. Additionally, the “home insurance policy” provides limited coverage of the tools and equipment required for business activities.
The Insurance Bureau of Canada points out that if an HbB is operated, the owner must inform the company insuring the home in which he/she resides to ascertain the limits of the existing insurance policy, as it may not be sufficient to cover all tools and equipment used for home-based economic activities. The HbB owner shall also examine the possibility of obtaining additional coverage to reduce the risk of potential losses if any incidents occur.
Also in this regard, the Insurance Bureau of Canada recommends that HbBs prepare risk management strategies, as such strategies are not only useful for large companies. These strategies formulate a clear and organized approach to determine the risks that the HbB may be vulnerable to, and how to combat them and eliminate any impacts. This helps the owner to ascertain the insurance service(s) required by the HbB. It is worth noting that these strategies are not always complicated and they responding to three specific questions which are as follows: What are the risks that the business may be exposed to, what are the measures that may be undertaken to prevent the occurrence of these damages or minimize their effects, and finally, if they do occur, what are the potential costs? (Insurance Bureau of Canada, 2014).
It is worth noting that the estimated cost of insuring HbBs varies according to the nature of the economic activity, although it usually ranges between $250-500 per year. This value is equal to the cost of losing computer information. Some insurance services for HbBs provide additional insurance worth approximately $2500 per year for commercial property and/or $50 per year to cover the risks of customers slipping or falling on the stairs of the home.
On a related note, the Personal Insurance Company recently made an important additional option available for HbB owners on home insurance policies, among them: coverage for all risks including protecting commercial equipment within and outside of the building, compensation for costs exceeding the insured amount and including the cost of configuring the space, and protection against damages inflicted on property or human injury incurred by any third party who may be injured as a result of business activities (for example, any visitor to the HbB headquarters) (The Credit Union, 2013).
Thus the previous discussion highlighted basic issues connected to HbBs in Canada and the approaches to handling the businesses. In this regard, the following may be concluded:
• Formal Registration: HbBs are considered a formal (normal) business model, wherein they shall be (legally) formally registered and are subject to most laws and regulations applied to other businesses with a fixed headquarters other than the home. This approach means that home based business could remain running from home, however they could be transformed to normal businesses..
• Dedicated Licenses and Regulatory Frameworks: Taking the protection of the public and consumers’ rights from HbB products and services into account, Canadian legislators compelled HbBs to a number of licenses and additional regulations associated with practicing activity in residential areas, as is the case in the American experience.
• Preferential Treatment: As HbBs practice their activities in the home, legislators have granted such businesses preferential treatment with regard to tax rates, wherein a proportion of household expenses may be added to business expenses, which leads to a tax deduction in comparison to non-HbBs.
• Falls under the Definition of SMEs: In the absence of a distinction between HbBs and non-HbBs with respect to registration and regulatory procedures, HbBs fall under the SME sector.
It is worth noting that some Canadian government agencies have focused on developing and publishing guidelines for HbBs including the manual “Starting a Home-based Business: Manual for Success” which was issued in the year 2002. The 141-page manual includes a discussion of a number of issues, among them: is the home the most appropriate location for your business and what products and services will be sold, where the guide indicates possible ideas and how to protect products and understand the legislation and frameworks governing HbBs alongside legal structures for HbBs. The manual also touches on the issue of selling and how to reach vendors, choose markets, and promote the business. The manual also reveals the administrative processes associated with HbBs and strategies that can be adopted to obtain profits. The book includes guidelines on preparing as well financial statements (Ministry of Competition, Science, and Enterprise & Western Economic Diversification Canada, 200).
2524 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
4. SingaporeSingapore has paid special attention to HbBs as a result of the lifestyle which the government and its people aspire to. Singapore believes that traditional jobs which were available in the past were capable of providing an income that could be relied upon to secure a living for most people for a relatively long period of time. However, the present and the future require that business activities be pursued at increasing rates. Since most individuals do not wish to begin full time business work, the HbB model has been encouraged as one of the main tools for encouraging entrepreneurship.
In a move to emphasize the importance of legislating and encouraging this type of business institution, Singapore added this model as a main axis within the SME Toolkit Singapore. This allowed for online cooperation with the International Finance Corporation (IFC) and IBM for many years, in cooperation with the national partner to provide content (My Own Business) – (Singapore SME Toolkit – 2015).
The government also issued a regulatory framework for home offices and compelled HbBs to register their activities in addition to providing various structural models under which a company may be registered. This granted business owners a degree of flexibility for choice and also helped specify authorized and unauthorized activities for the HbB. These issues are addressed in the following discussion.
4.1 Organizing the Home OfficeSingapore has adopted what is called a Home Office Scheme which allows the home owners, tenants, or occupants of private housing units to operate small-scale businesses in their homes as long as they fulfill certain guidelines and performance standards under the system. The activities of these businesses also shall not cause problems for neighbors.
The guidelines point out that the home office must obtain written approval from the Home and Development Board (HDB) in the event that the home is owned by the business owner, or the Urban Redevelopment Authority (URA) if the homes are privately owned. This is required to empower the HbB owner to use his/her home (owned or rented) for the purposes of the “Home Office.”
With regard to the eligibility criteria for establishing an HbB, the owner must be a landlord, tenant, subtenant, or individual authorized to use the house (age 18 or above). In order to be eligible to establish an HbB, he/she must comply with the following conditions (Housing and Development Board, 2015):
• He/she must be an individual running a business from home, provided that they are either a landlord, tenant, individual authorized with house use, or subtenant (a sub-lease).
• The house shall remain the place of residence and be used in parallel with the HbB, and performance of the commercial activity must be completely restricted to the inside the house.
• The company must be (formally) registered with the Accounting and Corporate Regulatory Authority (ACRA) unless they are exempted from registration under the “Business Registration Act”
• The business should not produce noise, smoke, odors, chemical materials/ liquid wastes, or dust so as not to cause more inconvenience than is usually expected from utilizing the location for residential purposes or become a source of inconvenience for neighbors. Examples of this include excessive noise resulting from the use of equipment or devices required for work, smoke, or the smell of liquid wastes resulting from the preparation, processing, or manufacturing of products.
2524 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
4. SingaporeSingapore has paid special attention to HbBs as a result of the lifestyle which the government and its people aspire to. Singapore believes that traditional jobs which were available in the past were capable of providing an income that could be relied upon to secure a living for most people for a relatively long period of time. However, the present and the future require that business activities be pursued at increasing rates. Since most individuals do not wish to begin full time business work, the HbB model has been encouraged as one of the main tools for encouraging entrepreneurship.
In a move to emphasize the importance of legislating and encouraging this type of business institution, Singapore added this model as a main axis within the SME Toolkit Singapore. This allowed for online cooperation with the International Finance Corporation (IFC) and IBM for many years, in cooperation with the national partner to provide content (My Own Business) – (Singapore SME Toolkit – 2015).
The government also issued a regulatory framework for home offices and compelled HbBs to register their activities in addition to providing various structural models under which a company may be registered. This granted business owners a degree of flexibility for choice and also helped specify authorized and unauthorized activities for the HbB. These issues are addressed in the following discussion.
4.1 Organizing the Home OfficeSingapore has adopted what is called a Home Office Scheme which allows the home owners, tenants, or occupants of private housing units to operate small-scale businesses in their homes as long as they fulfill certain guidelines and performance standards under the system. The activities of these businesses also shall not cause problems for neighbors.
The guidelines point out that the home office must obtain written approval from the Home and Development Board (HDB) in the event that the home is owned by the business owner, or the Urban Redevelopment Authority (URA) if the homes are privately owned. This is required to empower the HbB owner to use his/her home (owned or rented) for the purposes of the “Home Office.”
With regard to the eligibility criteria for establishing an HbB, the owner must be a landlord, tenant, subtenant, or individual authorized to use the house (age 18 or above). In order to be eligible to establish an HbB, he/she must comply with the following conditions (Housing and Development Board, 2015):
• He/she must be an individual running a business from home, provided that they are either a landlord, tenant, individual authorized with house use, or subtenant (a sub-lease).
• The house shall remain the place of residence and be used in parallel with the HbB, and performance of the commercial activity must be completely restricted to the inside the house.
• The company must be (formally) registered with the Accounting and Corporate Regulatory Authority (ACRA) unless they are exempted from registration under the “Business Registration Act”
• The business should not produce noise, smoke, odors, chemical materials/ liquid wastes, or dust so as not to cause more inconvenience than is usually expected from utilizing the location for residential purposes or become a source of inconvenience for neighbors. Examples of this include excessive noise resulting from the use of equipment or devices required for work, smoke, or the smell of liquid wastes resulting from the preparation, processing, or manufacturing of products.
2726 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• The commercial activity of the business must be legal and may not have negative, unethical impacts.
• The business must not result in vehicular traffic or human crowding in the surrounding area.
• No ads or posters for the business may be displayed or material goods sold in the house in a manner which causes nuisance to neighbors. Finally, business activities may not influence the atmosphere and environment of the residential area.
• No more than two employees who are not residents of the house may be employed.
• The business owner shall take all necessary safety precautions required to ensure that the commercial activities undertaken do not pose a threat to human life or damage any property.
• Electricity consumption and structural loads on the house may not exceed normal residential loads.
• The storage and use of hazardous chemical materials or other hazardous substances is strictly prohibited.
• The business must comply with fire safety requirements imposed by the Fire Safety and Shelter Department (FSSD) which are: installation of one fire extinguisher (2kg dry chemical powder) in the area in which HbB activities are managed, in addition to the installation of a smoke detector in the same location.
• Before starting to practice HbB activities, HbB owners must comply with any other governmental regulations imposed by government agencies, and obtain the required licenses and approvals.
The HbB system also specifies authorized and unauthorized business activities practiced from the home, which are as follows (Urban Redevelopment Authority, 2015):
• Authorized Activities: Accounting services, architectural design services, consulting services (business, engineering, information technology, management, and education) design and advertising services, insurance and financial planning services, real estate agencies, technology and knowledge-intensive businesses, transport services, and business offices.
• Unauthorized Activities: Cosmetology, hairdressing, and massage services, automotive trade, food and restaurants, medical clinics, pharmacies, commercial schools (including dance, music, and language schools), shipping, knitting and embroidery education, employment agencies, domestic help employment agencies, manufacturing, preparation, and processing of any goods or services, money laundering, repair activities (for example, electronic products, home appliances, shoes), sales and marketing, which includes conducting seminars and meetings with a large number of clients, stores, and any other type of retail trade, including pets.
In addition to this, a “home office” permit must be obtained via the Internet (Enterprise One, 2015), after which the residential headquarters may be used as the home address to register the HbB.
4.2 Legal Structure for HbBsIn Singapore, any person engaged in any commercial activity on an ongoing basis for the purpose of gaining profit must register his/her business. Choosing the legal structure of the company is considered one of the main decisions a company must make when it is established, as it impacts the taxes imposed, the relationship it has with clients and suppliers, and the personal responsibility assumed by the company owner. In order to provide more flexibility for the HbB, it may adopt one of the following legal structures – as is the case for non-HbBs.
• Sole Proprietorship: A sole proprietorship is not considered an independent legal entity, the owner of which is responsible in his/her personal capacity for all company obligations. It is possible for any existing company or natural person aged 18 or older to register a sole proprietorship. The manager must be a natural person aged 21 or above and a normal resident of Singapore – regardless of whether they are a citizen or a holder of permanent residence. In the majority of cases, the manger himself/herself is the owner of the company. The company owner must specify an address for the headquarters of his or her business. Since the sole proprietorship is not a legal entity, it may not register another subsidiary business. All letters, bills, and documents used for the purpose of practicing commercial activities must contain the establishment registration number in writing. Company registration must also be renewed annually.
• Partnership: This is considered more advanced than the sole proprietorship model, and consists of two or more partners (with no specification for the maximum number of partners). This type of company does not have an independent legal identity, and partners are personally responsible for company debts or obligations, as well each partner is responsible for the behavior and actions of other partners. This model is considered the least preferable category among business owners.
• Limited Liability Partnership: This represents a type of commercial partnerships to establish a commercial business as well as the most advanced. It combines the features of partnerships and companies, as the company has a legal identity separate from that of its owners. Thus the company may own property, sue individuals, and be sued. Normally, its activities pertain to an occupation (such as accountants, legal offices, and architects) in which two or more people (without a maximum) who wish to build a joint company meet. The partners may be natural or legal persons and the name of the company shall end with the phrase “limited liability partnership” or its abbreviation.
The owners of the company shall agree to divide profits and administrative responsibilities. No partner may be responsible in his/her personal capacity for any errors committed by the other partners. Work on this legal structure began in 2005 through the implementation of the Limited Liability Partnership Act.
• Private Limited Company: A company whose shares are owned by one person or up to less than 50 people, unavailable to the general public, and this represents the most common model for businesses registered within the country. A name for the company is chosen, and it usually ends with “private limited.” The company manager may be a shareholder or another individual. The minimum value of paid capital is SGD 1 which may be increased at any time after the company is established. The law organizing companies stipulates that the company must have an address within Singapore, regardless of whether it is a residential or commercial address. Private limited companies are among the most advanced and flexible companies that may be founded, and for this reason this has become the most preferred model for establishing a business entity (Guide me Singapore, 2015)
It is worth noting that the process for registering companies in the State of Singapore takes place completely via computer through the Singapore Registrar of Companies, and the process takes only 1-2 days.
2726 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• The commercial activity of the business must be legal and may not have negative, unethical impacts.
• The business must not result in vehicular traffic or human crowding in the surrounding area.
• No ads or posters for the business may be displayed or material goods sold in the house in a manner which causes nuisance to neighbors. Finally, business activities may not influence the atmosphere and environment of the residential area.
• No more than two employees who are not residents of the house may be employed.
• The business owner shall take all necessary safety precautions required to ensure that the commercial activities undertaken do not pose a threat to human life or damage any property.
• Electricity consumption and structural loads on the house may not exceed normal residential loads.
• The storage and use of hazardous chemical materials or other hazardous substances is strictly prohibited.
• The business must comply with fire safety requirements imposed by the Fire Safety and Shelter Department (FSSD) which are: installation of one fire extinguisher (2kg dry chemical powder) in the area in which HbB activities are managed, in addition to the installation of a smoke detector in the same location.
• Before starting to practice HbB activities, HbB owners must comply with any other governmental regulations imposed by government agencies, and obtain the required licenses and approvals.
The HbB system also specifies authorized and unauthorized business activities practiced from the home, which are as follows (Urban Redevelopment Authority, 2015):
• Authorized Activities: Accounting services, architectural design services, consulting services (business, engineering, information technology, management, and education) design and advertising services, insurance and financial planning services, real estate agencies, technology and knowledge-intensive businesses, transport services, and business offices.
• Unauthorized Activities: Cosmetology, hairdressing, and massage services, automotive trade, food and restaurants, medical clinics, pharmacies, commercial schools (including dance, music, and language schools), shipping, knitting and embroidery education, employment agencies, domestic help employment agencies, manufacturing, preparation, and processing of any goods or services, money laundering, repair activities (for example, electronic products, home appliances, shoes), sales and marketing, which includes conducting seminars and meetings with a large number of clients, stores, and any other type of retail trade, including pets.
In addition to this, a “home office” permit must be obtained via the Internet (Enterprise One, 2015), after which the residential headquarters may be used as the home address to register the HbB.
4.2 Legal Structure for HbBsIn Singapore, any person engaged in any commercial activity on an ongoing basis for the purpose of gaining profit must register his/her business. Choosing the legal structure of the company is considered one of the main decisions a company must make when it is established, as it impacts the taxes imposed, the relationship it has with clients and suppliers, and the personal responsibility assumed by the company owner. In order to provide more flexibility for the HbB, it may adopt one of the following legal structures – as is the case for non-HbBs.
• Sole Proprietorship: A sole proprietorship is not considered an independent legal entity, the owner of which is responsible in his/her personal capacity for all company obligations. It is possible for any existing company or natural person aged 18 or older to register a sole proprietorship. The manager must be a natural person aged 21 or above and a normal resident of Singapore – regardless of whether they are a citizen or a holder of permanent residence. In the majority of cases, the manger himself/herself is the owner of the company. The company owner must specify an address for the headquarters of his or her business. Since the sole proprietorship is not a legal entity, it may not register another subsidiary business. All letters, bills, and documents used for the purpose of practicing commercial activities must contain the establishment registration number in writing. Company registration must also be renewed annually.
• Partnership: This is considered more advanced than the sole proprietorship model, and consists of two or more partners (with no specification for the maximum number of partners). This type of company does not have an independent legal identity, and partners are personally responsible for company debts or obligations, as well each partner is responsible for the behavior and actions of other partners. This model is considered the least preferable category among business owners.
• Limited Liability Partnership: This represents a type of commercial partnerships to establish a commercial business as well as the most advanced. It combines the features of partnerships and companies, as the company has a legal identity separate from that of its owners. Thus the company may own property, sue individuals, and be sued. Normally, its activities pertain to an occupation (such as accountants, legal offices, and architects) in which two or more people (without a maximum) who wish to build a joint company meet. The partners may be natural or legal persons and the name of the company shall end with the phrase “limited liability partnership” or its abbreviation.
The owners of the company shall agree to divide profits and administrative responsibilities. No partner may be responsible in his/her personal capacity for any errors committed by the other partners. Work on this legal structure began in 2005 through the implementation of the Limited Liability Partnership Act.
• Private Limited Company: A company whose shares are owned by one person or up to less than 50 people, unavailable to the general public, and this represents the most common model for businesses registered within the country. A name for the company is chosen, and it usually ends with “private limited.” The company manager may be a shareholder or another individual. The minimum value of paid capital is SGD 1 which may be increased at any time after the company is established. The law organizing companies stipulates that the company must have an address within Singapore, regardless of whether it is a residential or commercial address. Private limited companies are among the most advanced and flexible companies that may be founded, and for this reason this has become the most preferred model for establishing a business entity (Guide me Singapore, 2015)
It is worth noting that the process for registering companies in the State of Singapore takes place completely via computer through the Singapore Registrar of Companies, and the process takes only 1-2 days.
2928 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
4.3 Preparing Food at Home for the Purpose of SaleAccording to the Home Office System described above, HbBs may not take on activities to prepare food for the purpose of sale on a large scale, although they may prepare small quantities of food to sell to friends and acquaintances but without converting their residence into a commercial store. In this case, these businesses do not need to issue a permit from the National Environment Agency (NEA) which is concerned with organizing retail sale of food in Singapore.
However, the NEA has published a set of guidelines for maintaining cleanliness and safety of foods prepared at home. These guidelines include a set of general regulations as follows (National Environment Agency, 2015):
• The food shall be prepared for friends or family only, and shall not be sold to retail outlets.
• All activities related to preparing and processing food shall be restricted to the kitchen, and the food may not be prepared or stored in any other room of the home, including the living room and bedrooms
• No pets (such as dogs or cats) may be left to roam freely around the home.
• No children or babies may be present in the kitchen while processing foods for sale.
• Moderately-sized food orders may be executed but the processing of large-sized orders shall be avoided.
• Food preparation or processing devices utilized by related commercial businesses may not be used, and as such devices and tools typically utilized in the kitchen for household purposes shall be used. If there is a desire to accommodate a larger number of orders and use the tools and devices appropriate for such, the business must be converted from an HbB to a non-HbB.
Additionally, instructions for a set of personal hygiene rules are as follows:
• Both hands must be washed thoroughly with soap and water after handling raw foods, before handling cooked and ready-to-eat foods, and after visiting the toilet or handling waste. Hands should be washed repeatedly throughout the food preparation process.
• Gloves must be used during food preparation and bottling operations.
• Food may not be prepared if feeling unwell.
The guide also contains a set of guidelines for using safe food ingredients and storing foods, including the following:
• Food ingredients used to prepare food must be obtained from licensed or approved sources.
• Ingredients that are used must be verified to be fresh, stored at appropriate temperatures, and not expired.
• Ingredients must be cleaned and washed well before use.
• Food must be stored in covered containers.
• Raw food materials must be stored in a tightly closed container in the refrigerator in a location under prepared foods.
• Perishable foods must remain refrigerated or frozen until they are used.
Finally, the guide offers a set of guidelines for safe food melting processes and kitchen cleaning as follows:
• Food must be defrosted thoroughly before cooking.
• Melted food must be used immediately without re-freezing it.
• The melting process must take place either in the refrigerator, in the microwave, or under cold running water.
• Cooking must not take place too early, and refrigeration or freezing of all cooked food shall take place within two hours of cooking.
• Tools, equipment, and cutting boards must be washed thoroughly before each use, especially when cutting raw meat, fish, or poultry.
• All surfaces and equipment must be cleaned regularly.
• The refrigerator must be kept clean, the kitchen shall be protected from pests, and waste shall be managed well.
The previous discussion shed light on basic issues linked to HbBs in Singapore and approaches for handling such businesses. In this regard, the following may be extracted:
• Formal Registration: HbBs are considered (legal) formal business models subject to most laws and regulations applied to other businesses with a fixed headquarters that is not the home, as is the case in the United States and Canada in addition to other countries. The law allows for four models for structuring these businesses, which increases the freedom to choose among them.
• Dedicated Licenses and Regulatory Frameworks: Taking the protection of the public and the right of the consumer against HbB products and services into consideration, legislators issued an “Home Office Scheme” which indicated the importance of obtaining a license to use the home as an HbB. It is worth noting that in the event that an HbB does not comply with the established rules, the business is closed down.
• Falling under the Definition of SMEs: Due to a lack of distinction between HbBs and non-HbBs with regard to registration measures and regulations, HbBs fall under to the SME sector.
• Food Prepared at Home: In contrast to the American experience, HbBs are not authorized to prepare food for the purpose of sale on a large scale, and thus issuing a set of guidelines that shall must taken into account proved sufficient. It is worth noting that some American states have issued a framework law to organize these activities and the spread of activities involving selling foods prepared at home for the purpose of sale as was previously indicated.
2928 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
4.3 Preparing Food at Home for the Purpose of SaleAccording to the Home Office System described above, HbBs may not take on activities to prepare food for the purpose of sale on a large scale, although they may prepare small quantities of food to sell to friends and acquaintances but without converting their residence into a commercial store. In this case, these businesses do not need to issue a permit from the National Environment Agency (NEA) which is concerned with organizing retail sale of food in Singapore.
However, the NEA has published a set of guidelines for maintaining cleanliness and safety of foods prepared at home. These guidelines include a set of general regulations as follows (National Environment Agency, 2015):
• The food shall be prepared for friends or family only, and shall not be sold to retail outlets.
• All activities related to preparing and processing food shall be restricted to the kitchen, and the food may not be prepared or stored in any other room of the home, including the living room and bedrooms
• No pets (such as dogs or cats) may be left to roam freely around the home.
• No children or babies may be present in the kitchen while processing foods for sale.
• Moderately-sized food orders may be executed but the processing of large-sized orders shall be avoided.
• Food preparation or processing devices utilized by related commercial businesses may not be used, and as such devices and tools typically utilized in the kitchen for household purposes shall be used. If there is a desire to accommodate a larger number of orders and use the tools and devices appropriate for such, the business must be converted from an HbB to a non-HbB.
Additionally, instructions for a set of personal hygiene rules are as follows:
• Both hands must be washed thoroughly with soap and water after handling raw foods, before handling cooked and ready-to-eat foods, and after visiting the toilet or handling waste. Hands should be washed repeatedly throughout the food preparation process.
• Gloves must be used during food preparation and bottling operations.
• Food may not be prepared if feeling unwell.
The guide also contains a set of guidelines for using safe food ingredients and storing foods, including the following:
• Food ingredients used to prepare food must be obtained from licensed or approved sources.
• Ingredients that are used must be verified to be fresh, stored at appropriate temperatures, and not expired.
• Ingredients must be cleaned and washed well before use.
• Food must be stored in covered containers.
• Raw food materials must be stored in a tightly closed container in the refrigerator in a location under prepared foods.
• Perishable foods must remain refrigerated or frozen until they are used.
Finally, the guide offers a set of guidelines for safe food melting processes and kitchen cleaning as follows:
• Food must be defrosted thoroughly before cooking.
• Melted food must be used immediately without re-freezing it.
• The melting process must take place either in the refrigerator, in the microwave, or under cold running water.
• Cooking must not take place too early, and refrigeration or freezing of all cooked food shall take place within two hours of cooking.
• Tools, equipment, and cutting boards must be washed thoroughly before each use, especially when cutting raw meat, fish, or poultry.
• All surfaces and equipment must be cleaned regularly.
• The refrigerator must be kept clean, the kitchen shall be protected from pests, and waste shall be managed well.
The previous discussion shed light on basic issues linked to HbBs in Singapore and approaches for handling such businesses. In this regard, the following may be extracted:
• Formal Registration: HbBs are considered (legal) formal business models subject to most laws and regulations applied to other businesses with a fixed headquarters that is not the home, as is the case in the United States and Canada in addition to other countries. The law allows for four models for structuring these businesses, which increases the freedom to choose among them.
• Dedicated Licenses and Regulatory Frameworks: Taking the protection of the public and the right of the consumer against HbB products and services into consideration, legislators issued an “Home Office Scheme” which indicated the importance of obtaining a license to use the home as an HbB. It is worth noting that in the event that an HbB does not comply with the established rules, the business is closed down.
• Falling under the Definition of SMEs: Due to a lack of distinction between HbBs and non-HbBs with regard to registration measures and regulations, HbBs fall under to the SME sector.
• Food Prepared at Home: In contrast to the American experience, HbBs are not authorized to prepare food for the purpose of sale on a large scale, and thus issuing a set of guidelines that shall must taken into account proved sufficient. It is worth noting that some American states have issued a framework law to organize these activities and the spread of activities involving selling foods prepared at home for the purpose of sale as was previously indicated.
3130 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
5. The United Arab EmiratesWith regard to HbBs, whose main activities are carried out within the home, in the Emirati experience, it can be said that this is characterized by taking two basic dimensions into account. The first dimension is the social target, as UAE nationals only are targeted for assistance in taking the first steps toward entering the world of entrepreneurship. This experience is similarly applied on the majority of the Gulf Cooperation Council (GCC) countries but stands in contrast to the previously referred to international experiences. The second dimension reflects a spatial target, as most efforts and initiatives adopted are implemented at the level of one Emirate without generalizing the experience across the United Arab Emirates as a whole.
The following discussion intends to shed light on the main initiatives related to developing HbBs with a focus on licensing HbBs and appreciating HbB excellence through the Mohammed bin Rashed Award, which is directed at such businesses.
5.1 Intelaq (launch) License –Emirate of DubaiThe United Arab Emirates – represented in the Emirate of Dubai and later in the Emirate of Abu Dhabi – is the first Gulf State to issue a license to register HbBs in order to help Emirati citizens begin the first steps of entering the world of entrepreneurship. The program was started in the year 1999 by the Department of Economic Department before it was later embraced by the Mohammed bin Rashid Establishment for SME Development. The first step is to organize these businesses which run from the home and establishing criteria specifically for the goal of activating and integrating these businesses within formal economy activity.
The program idea revolves around issuing license for citizens/residents of Dubai to practice commercial or occupational activities beginning in their homes, subject to compliance with relevant regulations and laws. Licenses are only issued to an individual who practices commercial activities in the location in which he or she lives (owned or rented).
The program aims to provide support for all stages of promising entrepreneurs looking to establish their businesses. In order to achieve this, the Mohammed bin Rashid Establishment for SME Development incubates small- and medium-sized enterprises (SMEs) through a three-year program. Under the program, the Establishment develops the project and those who support it, and advancing them to the highest possible level in order to qualify them to enter and compete in the business world. This is achieved through licensing and periodic follow-up for projects in addition to the provision of a varied package of training courses, and administrative and marketing consultations to owners of these businesses (The Mohamed bin Rashid Establishment for SME Development). The terms of granting licenses include:
• That HbBs be located in the Emirate of Dubai.
• That they employ family-members only with a maximum of ten employed individuals; although the “Intelaq” license does not allow for staff to be hired, it does, however, allow for dealings with contractors from other places if necessary.
• That invested capital not exceed AED 1 million.
This program is keen on determining the nature of business that can be supported, and avoid businesses that result in environmental or health damage as well as businesses that form a nuisance to neighbors. It must be noted that this program does not provide funding assistance. The only legal structure within the framework of the Intelaqprogram is a sole proprietorship.
3130 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
5. The United Arab EmiratesWith regard to HbBs, whose main activities are carried out within the home, in the Emirati experience, it can be said that this is characterized by taking two basic dimensions into account. The first dimension is the social target, as UAE nationals only are targeted for assistance in taking the first steps toward entering the world of entrepreneurship. This experience is similarly applied on the majority of the Gulf Cooperation Council (GCC) countries but stands in contrast to the previously referred to international experiences. The second dimension reflects a spatial target, as most efforts and initiatives adopted are implemented at the level of one Emirate without generalizing the experience across the United Arab Emirates as a whole.
The following discussion intends to shed light on the main initiatives related to developing HbBs with a focus on licensing HbBs and appreciating HbB excellence through the Mohammed bin Rashed Award, which is directed at such businesses.
5.1 Intelaq (launch) License –Emirate of DubaiThe United Arab Emirates – represented in the Emirate of Dubai and later in the Emirate of Abu Dhabi – is the first Gulf State to issue a license to register HbBs in order to help Emirati citizens begin the first steps of entering the world of entrepreneurship. The program was started in the year 1999 by the Department of Economic Department before it was later embraced by the Mohammed bin Rashid Establishment for SME Development. The first step is to organize these businesses which run from the home and establishing criteria specifically for the goal of activating and integrating these businesses within formal economy activity.
The program idea revolves around issuing license for citizens/residents of Dubai to practice commercial or occupational activities beginning in their homes, subject to compliance with relevant regulations and laws. Licenses are only issued to an individual who practices commercial activities in the location in which he or she lives (owned or rented).
The program aims to provide support for all stages of promising entrepreneurs looking to establish their businesses. In order to achieve this, the Mohammed bin Rashid Establishment for SME Development incubates small- and medium-sized enterprises (SMEs) through a three-year program. Under the program, the Establishment develops the project and those who support it, and advancing them to the highest possible level in order to qualify them to enter and compete in the business world. This is achieved through licensing and periodic follow-up for projects in addition to the provision of a varied package of training courses, and administrative and marketing consultations to owners of these businesses (The Mohamed bin Rashid Establishment for SME Development). The terms of granting licenses include:
• That HbBs be located in the Emirate of Dubai.
• That they employ family-members only with a maximum of ten employed individuals; although the “Intelaq” license does not allow for staff to be hired, it does, however, allow for dealings with contractors from other places if necessary.
• That invested capital not exceed AED 1 million.
This program is keen on determining the nature of business that can be supported, and avoid businesses that result in environmental or health damage as well as businesses that form a nuisance to neighbors. It must be noted that this program does not provide funding assistance. The only legal structure within the framework of the Intelaqprogram is a sole proprietorship.
3332 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
In order to obtain the services of this program, the cost of obtaining a Intelaq license has been specified at AED 1060, and it is possible to manage more than one activity under the umbrella of the license. If the business applies to obtain another government license, the HbB owner will assume those additional costs. Under the Intelaq license, the HbB may not hire employees for the business, but is permitted to deal with contractors. With regard to the documents required to obtain a license, they are as follows:
• License registration form (Department of Economic Development)
• Photocopy of valid passport
• Photocopy of the Family Book or original decree (for those who do not hold a Family Book) sent to the Department of Economic Development.
• Photocopy of map of the land or home ownership (Letter of No Objection from the home owner).
• Photocopy of the lease (Letter of No Objection Letter from the lessor)
• Educational and expertise certificates (for consulting activities only)
In support of the Intelaq license program, the Mohamed Bin Rashid Establishment for SME Development– a subsidiary of the Department of Economic Development in Dubai – adopted the “Intelaq Pioneers” Program in October 2012, designated to help citizens take the first steps toward entering the business world through HbBs. This initiative – allocated for Establishment launch Intelaq owners – to provide a work mechanism and training programs to enhance these businesses’ chances for success.
The program – which focuses on operational and developmental issues – provides ten diverse lectures over a total of 40 training hours in the Arabic language, distributed across practical and theoretical courses on how to begin a successful SME from home and methods to achieve this through a number of substantive mechanisms and strategies. The program also offers license-holders a clear vision on how to begin a business and the skills required to manage business successfully, as lecturers and experts provide a series of courses on evaluation mechanisms, choosing a business concept, and how to develop a pioneering business from the perspectives of effective administration, finance, marketing, and planning, as well as strategies for financial supervision of an HbB, understanding the gaps and means to fight challenges by using the most modern means, and knowledge of sound mechanisms to penetrate the market and expand by using social media.
On a related note, the Mohammed Bin Rashid Establishment to Develop SMEs offers a Business Incubation Center service which aims to help entrepreneurs overcome traditional obstacles that impede the growth of their businesses. The Establishment provides the services of this center to businesses launched from home along with new businesses and entrepreneurs working to establish their businesses, in addition to those undertaking research or testing out an idea before establishing a business.
The center’s team allows business owners a chance to manage the path of development for their businesses by thinking about the project and identifying opportunities and challenges. This is achieved through recognizing market requirements and responding to them, as well as reducing the risks of fluctuations in sales and fixed costs. The entrepreneurs establish their businesses through the Business Incubation Center, and the Center helps new businesses by granting them what they need in terms of developing and launching their businesses effectively.
5.2 Eitimad License– Emirate of SharjahOn a related note, the “Business License to Practice Activities from Home” (The Eitimad License) was launched by the Department of Economic Development in the Emirate of Sharjah through the jurisdiction issued by Law No. 1 of 2002 which contains the establishment of economic visions and encourages investment through the ideal exploitation of resources. This program is collaboration between the Department and the Khalifa Fund, the Sharjah Business Women Council, the Sharjah Tatweer Forum, and the Ruwad Establishment.
The idea behind this program is to take a primary interest in encouraging the sons and daughters of the nation, particularly citizens of the Emirate of Sharjah, to work, give, and benefit from time by empowering them to participate in economic life in accordance with an official approach. The issue requires that conditions, regulations, and restrictions be established for this type of activity, because the nature of the location in which they will practice economic activity requires that residential life not be affected in a manner that harms residents’ ability to enjoy a quiet family life. In other words, emphasizing that a housing unit primarily remains a housing unit (Government of Sharjah, Department of Economic Development).
The program includes a set of regulations, restrictions, and conditions to achieve the desired positive results, which are as follows:
• To Issue an Eitimad License: The license is issued by the department as a condition for practicing the activities relevant to this program (“Eitimad”) after the terms and requirements established by the Department are fulfilled by the individual applying for the license, particularly after they pledge not to breach the conditions of the license granted and to practice the activities under the license in the home in which the activities are set to be practiced. For this reason the license owner assumes all legal and administrative fees if violations are committed due to their failure to practice the activities in a sound and legal manner.
• Number of Licenses: No more than one license may be issued for each person living in the house.
• Pledge: The license holder pledges to comply with all legal provisions and regulations pertaining to practicing the licensed activities, whether they are currently practiced or will be developed later on. The license holder is responsible for adhering to all procedures imposed by other government departments or establishments and the Department of Economic Development does not assume any responsibility for such. If the license holder commits a violation, the Department is entitled to impose sanctions, ranging from a fine to revoking the license.
• Supervision of Activity: The Commercial Compliance Administration within the Department of Economic Development makes arrangements and takes measures and actions as it deems necessary, including conducting inspection visits to verify that the license is being used properly after obtaining prior approval from the Department Manager and authorization from the residents of the home. The Department inspector will verify that retail sales do not take place from the home, which causes many people to frequent the location in large groups in a manner provoking the ire of the area’s population. The inspector will write down what he sees during the home inspection in an accurate and complete matter.
• Working Hours: The license holder will work during acceptable working hours so as not to permit home-based activities to cause lead to vehicle traffic, bother residents of the area, or restrict their ability to enjoy their normal lifestyle.
3332 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
In order to obtain the services of this program, the cost of obtaining a Intelaq license has been specified at AED 1060, and it is possible to manage more than one activity under the umbrella of the license. If the business applies to obtain another government license, the HbB owner will assume those additional costs. Under the Intelaq license, the HbB may not hire employees for the business, but is permitted to deal with contractors. With regard to the documents required to obtain a license, they are as follows:
• License registration form (Department of Economic Development)
• Photocopy of valid passport
• Photocopy of the Family Book or original decree (for those who do not hold a Family Book) sent to the Department of Economic Development.
• Photocopy of map of the land or home ownership (Letter of No Objection from the home owner).
• Photocopy of the lease (Letter of No Objection Letter from the lessor)
• Educational and expertise certificates (for consulting activities only)
In support of the Intelaq license program, the Mohamed Bin Rashid Establishment for SME Development– a subsidiary of the Department of Economic Development in Dubai – adopted the “Intelaq Pioneers” Program in October 2012, designated to help citizens take the first steps toward entering the business world through HbBs. This initiative – allocated for Establishment launch Intelaq owners – to provide a work mechanism and training programs to enhance these businesses’ chances for success.
The program – which focuses on operational and developmental issues – provides ten diverse lectures over a total of 40 training hours in the Arabic language, distributed across practical and theoretical courses on how to begin a successful SME from home and methods to achieve this through a number of substantive mechanisms and strategies. The program also offers license-holders a clear vision on how to begin a business and the skills required to manage business successfully, as lecturers and experts provide a series of courses on evaluation mechanisms, choosing a business concept, and how to develop a pioneering business from the perspectives of effective administration, finance, marketing, and planning, as well as strategies for financial supervision of an HbB, understanding the gaps and means to fight challenges by using the most modern means, and knowledge of sound mechanisms to penetrate the market and expand by using social media.
On a related note, the Mohammed Bin Rashid Establishment to Develop SMEs offers a Business Incubation Center service which aims to help entrepreneurs overcome traditional obstacles that impede the growth of their businesses. The Establishment provides the services of this center to businesses launched from home along with new businesses and entrepreneurs working to establish their businesses, in addition to those undertaking research or testing out an idea before establishing a business.
The center’s team allows business owners a chance to manage the path of development for their businesses by thinking about the project and identifying opportunities and challenges. This is achieved through recognizing market requirements and responding to them, as well as reducing the risks of fluctuations in sales and fixed costs. The entrepreneurs establish their businesses through the Business Incubation Center, and the Center helps new businesses by granting them what they need in terms of developing and launching their businesses effectively.
5.2 Eitimad License– Emirate of SharjahOn a related note, the “Business License to Practice Activities from Home” (The Eitimad License) was launched by the Department of Economic Development in the Emirate of Sharjah through the jurisdiction issued by Law No. 1 of 2002 which contains the establishment of economic visions and encourages investment through the ideal exploitation of resources. This program is collaboration between the Department and the Khalifa Fund, the Sharjah Business Women Council, the Sharjah Tatweer Forum, and the Ruwad Establishment.
The idea behind this program is to take a primary interest in encouraging the sons and daughters of the nation, particularly citizens of the Emirate of Sharjah, to work, give, and benefit from time by empowering them to participate in economic life in accordance with an official approach. The issue requires that conditions, regulations, and restrictions be established for this type of activity, because the nature of the location in which they will practice economic activity requires that residential life not be affected in a manner that harms residents’ ability to enjoy a quiet family life. In other words, emphasizing that a housing unit primarily remains a housing unit (Government of Sharjah, Department of Economic Development).
The program includes a set of regulations, restrictions, and conditions to achieve the desired positive results, which are as follows:
• To Issue an Eitimad License: The license is issued by the department as a condition for practicing the activities relevant to this program (“Eitimad”) after the terms and requirements established by the Department are fulfilled by the individual applying for the license, particularly after they pledge not to breach the conditions of the license granted and to practice the activities under the license in the home in which the activities are set to be practiced. For this reason the license owner assumes all legal and administrative fees if violations are committed due to their failure to practice the activities in a sound and legal manner.
• Number of Licenses: No more than one license may be issued for each person living in the house.
• Pledge: The license holder pledges to comply with all legal provisions and regulations pertaining to practicing the licensed activities, whether they are currently practiced or will be developed later on. The license holder is responsible for adhering to all procedures imposed by other government departments or establishments and the Department of Economic Development does not assume any responsibility for such. If the license holder commits a violation, the Department is entitled to impose sanctions, ranging from a fine to revoking the license.
• Supervision of Activity: The Commercial Compliance Administration within the Department of Economic Development makes arrangements and takes measures and actions as it deems necessary, including conducting inspection visits to verify that the license is being used properly after obtaining prior approval from the Department Manager and authorization from the residents of the home. The Department inspector will verify that retail sales do not take place from the home, which causes many people to frequent the location in large groups in a manner provoking the ire of the area’s population. The inspector will write down what he sees during the home inspection in an accurate and complete matter.
• Working Hours: The license holder will work during acceptable working hours so as not to permit home-based activities to cause lead to vehicle traffic, bother residents of the area, or restrict their ability to enjoy their normal lifestyle.
3534 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
An initial registration license must be obtained in order to request the license through the Eitimad Program website. Following this, the remaining steps to register take place in the office. A number of required documents must be presented (printed license form signed by license holder – photocopy of passport – photocopy of home ownership deed or Letter of No Objection from the home owner – photocopy of lease if home is rented and Letter of No Objection from the lessor). The following legal conditions must also be met in order to issue the license:
• No citizen may practice any activity for profit from the home without previously obtaining a license to practice commercial, home-based work from the licensing authorities, and if this does not take place, the citizen will fall under penalty of administrative and legal accountability
• No work permits (recruitment) may be extracted and no third non-citizen party may have a direct role in the business of the license with the exception of those already using the home, although their role shall be of a temporary and intermittent nature and they may not have any relationship to the licensed activities. The license holder assumes administrative and legal responsibility to ensure this.
• The license may not be rented to a third party.
• Practicing the activity may not result in the emission of heat or a glare, sound, smell, light, dust, vibrations, flames, or fumes, nor may it interfere with the electric current or radio, television, or telephone waves, or lead to a gathering of people or crowd or any other issues which limit others’ ability to enjoy their home in any form.
Regarding the conditions that must be met by the license holder, they are as follows:
• All citizens of the United Arab Emirates living in the Emirate of Sharjah are permitted to obtain an Eitimad License.
• The applicant must be twenty-one years old and over
• The term of the license is one year and may be renewed.
• The applicant must possess a home license in the Emirate of Sharjah or a signed a Letter of No Objection from the home owner for one of the members of the household such as the wife, mother, father, or sons (first-degree relatives).
• Approval from the building or villa owner (if the home is rented) to practice the desired activity with the lease attached.
• A pledge must be signed by the license holder to fulfill all required conditions and legal regulations related to practicing the licensed activity.
• The license holder must maintain public health and security and not cause an increase in waste in the residential area.
• Vehicles used for commercial purposes may not spend a night in front of the home in a manner contrary to neighborhood norms, as it is required that the license holder not practice the licensed activity in a manner that leads to pressure on public parking in the area.
• No illuminated or non-illuminated advertising or promotional signs may be placed on the home or external door of the home in accordance with this program, and nothing which reveals that the home is utilized to practice commercial activities or for non-residential purposes may be displayed.
• No goods may be placed outside of the home, as it is not permitted to store medicines, toxic materials, or food harmful to public health or the environment, or any other goods that cause harm or a nuisance to neighbors living in the same area.
• The Department of Economic Development in the Emirate of Sharjah is entitled to undertake all procedures and arrangements it sees fit, including conducting inspection visits (for food and cosmetic activities) to verify proper use of the license, and that the license holder adheres to all laws pertaining to this type of license, provided that prior approval is obtained from the responsible individuals in the Department as well as authorization from residents of the home.
The regulations for obtaining a commercial license to practice business from the home specifies a number of authorized economic activities of a professional nature, which includes the following (for example):
• Sewing and embroidery: fashion design (clothing, shawls, and abayas) – embroidery work – sewing and textile work.
• Event services: filming events and weddings, preparing and packaging gifts, designing hand-made cards and gifts (not for advertising), designing and executing wedding dais, and catering (regulatory)
• Educational services: fashion design education, teaching painting and sculpture, housekeeping education.
• Online services: Designing advertisements via computer, design via computer (commercial sites, web pages), designing wedding dais via computer, designing wedding cards and gift boxes (for advertising and not for advertising) electronically, designing computer programs and systems and equipment and device programs electronically.
• Knowledge-based services: Providing research and study services.
• Business work: Production of non-precious jewelry, antiques, gifts, trading non-precious ornaments and accessories wholesale, trading ready-made clothing, renting wedding dresses, designing jewelry, packaging and binding textbooks.
• Perfumes and cosmetics: Mixing, selling, and packaging perfume, mixing, selling, and packaging fume – salon (cosmetics, hair styling, henna) – reselling authorized perfumes and cosmetics in accordance with specific terms and conditions.
• Food activities: Direct consumption (hot and cold cooking) and hospitality services (which includes food) – long-term consumption foods (canned foods) in accordance with special terms and conditions.
With regard to license issuance fees, a fee of AED 1150 is required to obtain the license to practice activities from the home (AED 250 for initial brand name approval – AED 100 for the advertising panel – AED 300 to print the license – AED 500 to issue the register) in addition to AED 300 for a delegate card if the citizen him- or herself fails to appear. The license is valid for one year only, although it may be renewed for a fee of AED 1000.
It should be noted that adopting the design of the Eitimad Program may represent a basic component of incentivizing citizens to register their HbBs by providing a package of services that the license holders benefit from. These services include, and through this program the license holder enjoys, the following:
3534 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
An initial registration license must be obtained in order to request the license through the Eitimad Program website. Following this, the remaining steps to register take place in the office. A number of required documents must be presented (printed license form signed by license holder – photocopy of passport – photocopy of home ownership deed or Letter of No Objection from the home owner – photocopy of lease if home is rented and Letter of No Objection from the lessor). The following legal conditions must also be met in order to issue the license:
• No citizen may practice any activity for profit from the home without previously obtaining a license to practice commercial, home-based work from the licensing authorities, and if this does not take place, the citizen will fall under penalty of administrative and legal accountability
• No work permits (recruitment) may be extracted and no third non-citizen party may have a direct role in the business of the license with the exception of those already using the home, although their role shall be of a temporary and intermittent nature and they may not have any relationship to the licensed activities. The license holder assumes administrative and legal responsibility to ensure this.
• The license may not be rented to a third party.
• Practicing the activity may not result in the emission of heat or a glare, sound, smell, light, dust, vibrations, flames, or fumes, nor may it interfere with the electric current or radio, television, or telephone waves, or lead to a gathering of people or crowd or any other issues which limit others’ ability to enjoy their home in any form.
Regarding the conditions that must be met by the license holder, they are as follows:
• All citizens of the United Arab Emirates living in the Emirate of Sharjah are permitted to obtain an Eitimad License.
• The applicant must be twenty-one years old and over
• The term of the license is one year and may be renewed.
• The applicant must possess a home license in the Emirate of Sharjah or a signed a Letter of No Objection from the home owner for one of the members of the household such as the wife, mother, father, or sons (first-degree relatives).
• Approval from the building or villa owner (if the home is rented) to practice the desired activity with the lease attached.
• A pledge must be signed by the license holder to fulfill all required conditions and legal regulations related to practicing the licensed activity.
• The license holder must maintain public health and security and not cause an increase in waste in the residential area.
• Vehicles used for commercial purposes may not spend a night in front of the home in a manner contrary to neighborhood norms, as it is required that the license holder not practice the licensed activity in a manner that leads to pressure on public parking in the area.
• No illuminated or non-illuminated advertising or promotional signs may be placed on the home or external door of the home in accordance with this program, and nothing which reveals that the home is utilized to practice commercial activities or for non-residential purposes may be displayed.
• No goods may be placed outside of the home, as it is not permitted to store medicines, toxic materials, or food harmful to public health or the environment, or any other goods that cause harm or a nuisance to neighbors living in the same area.
• The Department of Economic Development in the Emirate of Sharjah is entitled to undertake all procedures and arrangements it sees fit, including conducting inspection visits (for food and cosmetic activities) to verify proper use of the license, and that the license holder adheres to all laws pertaining to this type of license, provided that prior approval is obtained from the responsible individuals in the Department as well as authorization from residents of the home.
The regulations for obtaining a commercial license to practice business from the home specifies a number of authorized economic activities of a professional nature, which includes the following (for example):
• Sewing and embroidery: fashion design (clothing, shawls, and abayas) – embroidery work – sewing and textile work.
• Event services: filming events and weddings, preparing and packaging gifts, designing hand-made cards and gifts (not for advertising), designing and executing wedding dais, and catering (regulatory)
• Educational services: fashion design education, teaching painting and sculpture, housekeeping education.
• Online services: Designing advertisements via computer, design via computer (commercial sites, web pages), designing wedding dais via computer, designing wedding cards and gift boxes (for advertising and not for advertising) electronically, designing computer programs and systems and equipment and device programs electronically.
• Knowledge-based services: Providing research and study services.
• Business work: Production of non-precious jewelry, antiques, gifts, trading non-precious ornaments and accessories wholesale, trading ready-made clothing, renting wedding dresses, designing jewelry, packaging and binding textbooks.
• Perfumes and cosmetics: Mixing, selling, and packaging perfume, mixing, selling, and packaging fume – salon (cosmetics, hair styling, henna) – reselling authorized perfumes and cosmetics in accordance with specific terms and conditions.
• Food activities: Direct consumption (hot and cold cooking) and hospitality services (which includes food) – long-term consumption foods (canned foods) in accordance with special terms and conditions.
With regard to license issuance fees, a fee of AED 1150 is required to obtain the license to practice activities from the home (AED 250 for initial brand name approval – AED 100 for the advertising panel – AED 300 to print the license – AED 500 to issue the register) in addition to AED 300 for a delegate card if the citizen him- or herself fails to appear. The license is valid for one year only, although it may be renewed for a fee of AED 1000.
It should be noted that adopting the design of the Eitimad Program may represent a basic component of incentivizing citizens to register their HbBs by providing a package of services that the license holders benefit from. These services include, and through this program the license holder enjoys, the following:
3736 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• A special annual exhibitions for Eitimad License holders.
• Provision of educational courses and training services.
• Development and follow-up for the Business Incubator.
• Promotion and marketing for SMEs.
• Supporting member businesses in obtaining franchising opportunities.
• Provision of legal consultation.
• Potential support from the Ruwad Establishment for pioneering and successful businesses.
• Success stories displayed on license program website.
In addition to this, the license holder is permitted to market their products and services electronically on the Eitimad Program website (www.eitimad.ae) and the site also displays a list of the HbBs which hold a license. It is worth noting that those in charge of the program published the “Website Marketing Guide for HbB Eitimad License Owners” in order to facilitate the licensee’s use of the website to add their products. The terms and conditions for the businesses displayed on the website are as follows:
• The HbB must be licensed with the Economic Development Department – Sharjah under the Eitimad License Program.
• The goods must be high-quality and attention must be paid to proper packaging.
• All attached photographs must be high-quality and have clear lighting with clear details at a minimum.
• A logo must be provided for the project in application of the art of marketing.
• Goods must be accurately photographed and appropriate locations chosen for photographing.
• The images must be high-quality and displayed on a white background if the product is photographed by itself.
• Exposed body parts must be covered when marketing women’s products like clothing, accessories, and so on, regardless of whether they be displayed on mannequins or models.
• A price must be provided for each product in the designated location beneath the product on the website, and photographs that show the price in a dramatic manner will be rejected.
• Photographs may not be distorted with writing or other photographs (only property rights are permitted to be added to the photograph in a suitable manner).
• Service activities are permitted to add pictures providing evidence of the services or demonstrate the types of services offered in a manner suitable for graphics.
• For activities like consultative or design services, a direct price may be left out due to the nature of this type of design and the prices agreed upon.
• All contact information that the business wishes to provide to customers: telephone/ Mobile Phone/ WhatsApp/ Instagram/ Twitter/ Facebook
• The business must adhere to all activities specified in the license and not add any products under other categories of activity.
• If there is a desire to sell or offer new activities, this can be done after officially adding the name of the activity to the license.
In order to facilitate matters for HbBs in February 2015, the Sharjah Chamber of Commerce and Industry announced that Eitimad Program License holders would be exempted from Chamber membership fees in support of citizen SME owners of both genders.
This resulted in HbB owners benefitting from the facilities and advantages offered by the Chamber to its members, at the forefront of which is the Sharjah Business Incubator Center (Bedaya) which is considered a platform that incubates new businesses for citizens, and helps them overcome all of the difficulties that they face. Other privileges offered by the Chamber for SMEs participating in the national program to support entrepreneurial projects include involving the businesses in important exhibitions and economic events inside and outside the state.
5.3 Mubdia'h License – Abu DhabiIn the Emirate of Abu Dhabi, Abu Dhabi Businesswomen Council adopted the Productive Families Program in 1997 with the goal of supporting heritage and handicraft products made by Emirati women in the home in a step toward improving the economic position of low-income families. The beginnings of this project were limited to an annual event held for productive families which later turned into a permanent exhibition at the headquarters of the Businesswomen Council. The objectives of the project are as follows:
• Encouraging production and self-employment among citizens’ households,
• Strengthening the role of female citizens by presenting their products in local and Arab exhibitions,
• Enriching the business market through creative national energies,
• Creating work opportunities for all family members of society,
• Taking advantage of artistic and professional capabilities for the whole family, and
• Maintaining local heritage and state history,
In order to develop this project, the Mubdia'h Programme was founded in the Emirate under Decree No. 6 issued by the Abu Dhabi Businesswomen Executive Council in 2005, which pertains to permitting nationals to practice various commercial activities from the home through (Abu Dhabi Businesswomen Council 2012):
• Continued use of the home as a primarily residential unit,
• Avoiding compromising the rights of all community residents to live a quiet life in a residential neighborhood, and
• Licensing specific commercial activities whose operational nature is consistent with the characteristics of residential life.
This development sought to legally organize female citizens’ practice of commercial activities through the home and to find a mechanism to help develop and move the practice of commercial work outside of the home. Another goal includes spreading awareness of the correct method through which commercial work may be practiced in order to improve the material situation of all productive families as well as graduates, housewives, divorcees, and widows. Thus the program aims to achieve the following:
3736 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• A special annual exhibitions for Eitimad License holders.
• Provision of educational courses and training services.
• Development and follow-up for the Business Incubator.
• Promotion and marketing for SMEs.
• Supporting member businesses in obtaining franchising opportunities.
• Provision of legal consultation.
• Potential support from the Ruwad Establishment for pioneering and successful businesses.
• Success stories displayed on license program website.
In addition to this, the license holder is permitted to market their products and services electronically on the Eitimad Program website (www.eitimad.ae) and the site also displays a list of the HbBs which hold a license. It is worth noting that those in charge of the program published the “Website Marketing Guide for HbB Eitimad License Owners” in order to facilitate the licensee’s use of the website to add their products. The terms and conditions for the businesses displayed on the website are as follows:
• The HbB must be licensed with the Economic Development Department – Sharjah under the Eitimad License Program.
• The goods must be high-quality and attention must be paid to proper packaging.
• All attached photographs must be high-quality and have clear lighting with clear details at a minimum.
• A logo must be provided for the project in application of the art of marketing.
• Goods must be accurately photographed and appropriate locations chosen for photographing.
• The images must be high-quality and displayed on a white background if the product is photographed by itself.
• Exposed body parts must be covered when marketing women’s products like clothing, accessories, and so on, regardless of whether they be displayed on mannequins or models.
• A price must be provided for each product in the designated location beneath the product on the website, and photographs that show the price in a dramatic manner will be rejected.
• Photographs may not be distorted with writing or other photographs (only property rights are permitted to be added to the photograph in a suitable manner).
• Service activities are permitted to add pictures providing evidence of the services or demonstrate the types of services offered in a manner suitable for graphics.
• For activities like consultative or design services, a direct price may be left out due to the nature of this type of design and the prices agreed upon.
• All contact information that the business wishes to provide to customers: telephone/ Mobile Phone/ WhatsApp/ Instagram/ Twitter/ Facebook
• The business must adhere to all activities specified in the license and not add any products under other categories of activity.
• If there is a desire to sell or offer new activities, this can be done after officially adding the name of the activity to the license.
In order to facilitate matters for HbBs in February 2015, the Sharjah Chamber of Commerce and Industry announced that Eitimad Program License holders would be exempted from Chamber membership fees in support of citizen SME owners of both genders.
This resulted in HbB owners benefitting from the facilities and advantages offered by the Chamber to its members, at the forefront of which is the Sharjah Business Incubator Center (Bedaya) which is considered a platform that incubates new businesses for citizens, and helps them overcome all of the difficulties that they face. Other privileges offered by the Chamber for SMEs participating in the national program to support entrepreneurial projects include involving the businesses in important exhibitions and economic events inside and outside the state.
5.3 Mubdia'h License – Abu DhabiIn the Emirate of Abu Dhabi, Abu Dhabi Businesswomen Council adopted the Productive Families Program in 1997 with the goal of supporting heritage and handicraft products made by Emirati women in the home in a step toward improving the economic position of low-income families. The beginnings of this project were limited to an annual event held for productive families which later turned into a permanent exhibition at the headquarters of the Businesswomen Council. The objectives of the project are as follows:
• Encouraging production and self-employment among citizens’ households,
• Strengthening the role of female citizens by presenting their products in local and Arab exhibitions,
• Enriching the business market through creative national energies,
• Creating work opportunities for all family members of society,
• Taking advantage of artistic and professional capabilities for the whole family, and
• Maintaining local heritage and state history,
In order to develop this project, the Mubdia'h Programme was founded in the Emirate under Decree No. 6 issued by the Abu Dhabi Businesswomen Executive Council in 2005, which pertains to permitting nationals to practice various commercial activities from the home through (Abu Dhabi Businesswomen Council 2012):
• Continued use of the home as a primarily residential unit,
• Avoiding compromising the rights of all community residents to live a quiet life in a residential neighborhood, and
• Licensing specific commercial activities whose operational nature is consistent with the characteristics of residential life.
This development sought to legally organize female citizens’ practice of commercial activities through the home and to find a mechanism to help develop and move the practice of commercial work outside of the home. Another goal includes spreading awareness of the correct method through which commercial work may be practiced in order to improve the material situation of all productive families as well as graduates, housewives, divorcees, and widows. Thus the program aims to achieve the following:
3938 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• Supporting female citizens’ ideas and initiatives to invest in their private businesses,
• Providing work mechanisms to strengthen opportunities for success for female citizens, including training, marketing, and technical support,
• Activating female citizens’ contributions to the economic sector and the fields of business and trade by granting them the opportunity to practice business in the correct manner,
• Regulating the practice of commercial work through the home in the Emirate of Abu Dhabi, and
• Opening new fields and roles for female citizens and encouraging them to be creative and develop their capabilities.
Additionally, a license from the Department of Planning and Economy (Abu Dhabi – Al Ain) may be obtained after initial approval is acquired from the Abu Dhabi Businesswomen Council. The activity must be practiced by the licensed female citizen and within the specified home, and the license must be for one activity only. The licensee pledges not to breach any conditions established by the competent authority, which would nullify the license and render the holder in violation of the law and provisions for licensing. In this case the licensee would assume all legal and administrative fees that arise from such and the body which granted the license reserves the full right to take any measures it deems necessary. Acquiring this license is followed by obtaining membership in the Abu Dhabi Chamber of Commerce and Industry. With regard to the legal requirements that must be met to issue the license, they are as follows:
• A Mubdia'h license is granted to a woman who does not possess any license issued by licensing authorities in the Emirate of Abu Dhabi, whether it be a business, professional, handicraft, or industrial license,
• No female citizen may practice any activity for profit from home without previously obtaining a license to practice commercial work from home from the licensing authorities subject to administrative and legal accountability
• No work permits may be extracted (recruitment) and no third party other than female citizens may play a direct role in the business of the license with the exception of those already using the home. Their involvement must be of a temporary and intermittent nature and must not have any relationship to the licensed activity. The licensee must assume administrative and legal responsibility to ensure this.
• The license may not be leased to a third party.
• Practicing the activity may not result in the emission of heat or a glare, sound, smell, light, dust, vibrations, flames, or fumes, nor may it interfere with the electric current or radio, television, or telephone waves, or lead to a gathering of people or crowds or any other issues which limit others’ ability to enjoy their home in any form.
• The licensee shall maintain public health and security and not cause an increase in waste in the residential area.
• The licensee will work during acceptable working hours so as not to permit home-based activities which lead to vehicular traffic, bother residents of the area, or restrict their ability to enjoy their normal lifestyle.
• Vehicles used for commercial purposes may not spend a night in front of the home in a manner contrary to neighborhood norms, as it is required that the licensee not practice the licensed activity in a manner that creates pressure on public parking in the area.
• Conducting retail sales from the home is prohibited.
• It is prohibited to place any advertising or promotional signs on the home or the exterior wall, and it is only permitted to place a sign at the entrance to the home which states the license name and includes the license number, activity, and the phrase “Mubdiah Program.” The area of the sign shall be no more than two square feet and it must be flat. No illumination is permitted, and flags or banners are not allowed.
• No goods, equipment, or machines may be stored outside of the inner walls of the home, nor is it permitted to store any toxic, dangerous, forbidden, or flammable materials, nor any other materials that may harm the public health. Sheltering or harboring animals whose presence or existence may cause a nuisance to area residents or threaten the residential nature of the area is forbidden.
• Setting out any item that may indicate that the home is utilized to practice a commercial activity or for non-residential purposes (except for the panel) is forbidden, including setting out any products or “displays on the windows or walls” with the intention of drawing the attention of passerby or inviting purchases. If any of these items are set out within the home, they must not be visible from outside at all.
• The Department of Economic Development has the right to take all measures and arrangements it deems necessary, including inspection visits, to verify proper use of the license and the licensee’s adherence to all laws pertaining to this type of license, provided that approval from relevant authorities within the municipality is obtained in advanced in addition to authorization from residents of the home.
• The licensee is subject to inspection and examination on commercial activity conducted by the Abu Dhabi Business Women Council in order to obtain preliminary approval from the Abu Dhabi Business Women Council.
Applicants for a Mubdiah License must meet the following requirements:
• The applicant must be a UAE citizen resident in the Emirate of Abu Dhabi.
• The applicant must be no younger than 21 years old.
• The license shall be for only one activity.
• Preliminary approval must be obtained from the Abu Dhabi Business Women Council.
• Consent from the applicant’s husband or guardian is required to extract the home license, and the applicant’s husband or guardian must pledge that he will assume any material or moral claims toward third parties.
• The term of the license is one year and may be renewed.
• If rented, consent from the owner of the building or villa to practice the desired activity is required.
• A license shall be obtained from the competent authorities, which are the Department of Planning and Economy (Abu Dhabi – Al Ain) and the Abu Dhabi Chamber of Industry and Commerce.
• The licensee must sign a pledge to abide by all required legal conditions and regulations pertaining to practicing the licensed activity.
The framework for the license has determined that the following economic activities are authorized to be conducted from the home:
3938 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• Supporting female citizens’ ideas and initiatives to invest in their private businesses,
• Providing work mechanisms to strengthen opportunities for success for female citizens, including training, marketing, and technical support,
• Activating female citizens’ contributions to the economic sector and the fields of business and trade by granting them the opportunity to practice business in the correct manner,
• Regulating the practice of commercial work through the home in the Emirate of Abu Dhabi, and
• Opening new fields and roles for female citizens and encouraging them to be creative and develop their capabilities.
Additionally, a license from the Department of Planning and Economy (Abu Dhabi – Al Ain) may be obtained after initial approval is acquired from the Abu Dhabi Businesswomen Council. The activity must be practiced by the licensed female citizen and within the specified home, and the license must be for one activity only. The licensee pledges not to breach any conditions established by the competent authority, which would nullify the license and render the holder in violation of the law and provisions for licensing. In this case the licensee would assume all legal and administrative fees that arise from such and the body which granted the license reserves the full right to take any measures it deems necessary. Acquiring this license is followed by obtaining membership in the Abu Dhabi Chamber of Commerce and Industry. With regard to the legal requirements that must be met to issue the license, they are as follows:
• A Mubdia'h license is granted to a woman who does not possess any license issued by licensing authorities in the Emirate of Abu Dhabi, whether it be a business, professional, handicraft, or industrial license,
• No female citizen may practice any activity for profit from home without previously obtaining a license to practice commercial work from home from the licensing authorities subject to administrative and legal accountability
• No work permits may be extracted (recruitment) and no third party other than female citizens may play a direct role in the business of the license with the exception of those already using the home. Their involvement must be of a temporary and intermittent nature and must not have any relationship to the licensed activity. The licensee must assume administrative and legal responsibility to ensure this.
• The license may not be leased to a third party.
• Practicing the activity may not result in the emission of heat or a glare, sound, smell, light, dust, vibrations, flames, or fumes, nor may it interfere with the electric current or radio, television, or telephone waves, or lead to a gathering of people or crowds or any other issues which limit others’ ability to enjoy their home in any form.
• The licensee shall maintain public health and security and not cause an increase in waste in the residential area.
• The licensee will work during acceptable working hours so as not to permit home-based activities which lead to vehicular traffic, bother residents of the area, or restrict their ability to enjoy their normal lifestyle.
• Vehicles used for commercial purposes may not spend a night in front of the home in a manner contrary to neighborhood norms, as it is required that the licensee not practice the licensed activity in a manner that creates pressure on public parking in the area.
• Conducting retail sales from the home is prohibited.
• It is prohibited to place any advertising or promotional signs on the home or the exterior wall, and it is only permitted to place a sign at the entrance to the home which states the license name and includes the license number, activity, and the phrase “Mubdiah Program.” The area of the sign shall be no more than two square feet and it must be flat. No illumination is permitted, and flags or banners are not allowed.
• No goods, equipment, or machines may be stored outside of the inner walls of the home, nor is it permitted to store any toxic, dangerous, forbidden, or flammable materials, nor any other materials that may harm the public health. Sheltering or harboring animals whose presence or existence may cause a nuisance to area residents or threaten the residential nature of the area is forbidden.
• Setting out any item that may indicate that the home is utilized to practice a commercial activity or for non-residential purposes (except for the panel) is forbidden, including setting out any products or “displays on the windows or walls” with the intention of drawing the attention of passerby or inviting purchases. If any of these items are set out within the home, they must not be visible from outside at all.
• The Department of Economic Development has the right to take all measures and arrangements it deems necessary, including inspection visits, to verify proper use of the license and the licensee’s adherence to all laws pertaining to this type of license, provided that approval from relevant authorities within the municipality is obtained in advanced in addition to authorization from residents of the home.
• The licensee is subject to inspection and examination on commercial activity conducted by the Abu Dhabi Business Women Council in order to obtain preliminary approval from the Abu Dhabi Business Women Council.
Applicants for a Mubdiah License must meet the following requirements:
• The applicant must be a UAE citizen resident in the Emirate of Abu Dhabi.
• The applicant must be no younger than 21 years old.
• The license shall be for only one activity.
• Preliminary approval must be obtained from the Abu Dhabi Business Women Council.
• Consent from the applicant’s husband or guardian is required to extract the home license, and the applicant’s husband or guardian must pledge that he will assume any material or moral claims toward third parties.
• The term of the license is one year and may be renewed.
• If rented, consent from the owner of the building or villa to practice the desired activity is required.
• A license shall be obtained from the competent authorities, which are the Department of Planning and Economy (Abu Dhabi – Al Ain) and the Abu Dhabi Chamber of Industry and Commerce.
• The licensee must sign a pledge to abide by all required legal conditions and regulations pertaining to practicing the licensed activity.
The framework for the license has determined that the following economic activities are authorized to be conducted from the home:
4140 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• A calligraphy or drawing store,
• Handicraft and environmental craft work,
• Interior design (décor),
• Printing and document photocopying services,
• Retail sale of milk,
• Retail sale of spices and perfumery,
• Retail sale of cosmetics,
• Beauty and personal care center for women,
• Parties and recreational event planning,
• Tailoring and sewing women’s clothing,
• Arranging natural and artificial flowers,
• Henna tattoos,
• Training for women’s beauty salon work,
• Retail sale of Arab clothing, and
• Thread embroidery and beading.
This is coupled with acquiring a Mubdaih License in order to obtain a number of benefits available for HbBs with the goal of encouraging the businesses to participate and develop their work. These benefits include:
• Women applying to register with Mubdiah Program receives a 50% discount on the business activities fee for the Abu Dhabi Chamber of Industry and Commerce
• The process of obtaining a license is facilitated
• Mubdiah Program members receive membership in the Abu Dhabi Business Women Council
• Women are granted an Emirati Card and enjoy all associated benefits
• The woman is granted the opportunity to participate in exhibitions and conferences organized by the Abu Dhabi Business Woman Council,
• Meetings with business women affiliated with the Council and their counterparts from outside of the country are held to share experience and job opportunities
• The woman is granted the opportunity to participate in training and rehabilitation courses organized by the Abu Dhabi Chamber of Commerce and Industry and the Abu Dhabi Business Woman Council
• Creative products are promoted through: The Abu Dhabi Business Woman Council Website – The Business Woman Manual – Various exhibitions and events
5.4 The Mohammed bin Rashid Awards for Young Business LeadersIn 2004 the Mohammed bin Rashid Establishment launched an annual award program called “The Mohammed bin Rashid Award for Young Business Leaders” with the goal of creating a competitive environment for young business leaders as well as honoring outstanding performance. The award also seeks to honor and incentivize individuals and institutions which have helped develop young business leaders’ performance. The award seeks to create a platform through which the creative energies of young investor SME owners can be celebrated in order to create a new generation of businessmen and women capable of building local economic potential.
The ninth round of the award –that was launched in January 2015 - includes four main categories, which are as follows (Mohammed bin Rashid Award for Young Business Leaders):
• Category I: At the level of the UAE, to honor the best SMEs across the country in the service, industry, and trade sectors, in addition to the category of businesses that are practiced from home in the Emirate of Dubai (Launch) and other Emirates, and the best SMEs in the Islamic economy sector,
• Category II: At the level of the Arab world, to honor the best SMES in the Arab world in the service, industry, and trade sectors, in addition to the best SMEs in Islamic economy,
• Category III: Best entrepreneur in the UAE, and
• Category IV: At the level of supporting entities, to honor the best entities supporting entrepreneurs and SMEs across the following sub-categories: The government procurement program (UAE), schools, universities, networks of business mentors, development banks, commercial banks, and supporting initiatives.
With regard to the first category, which focuses on the UAE, the first three sectors of the prize category represent the sectors that comprise the official definition of SMEs in the Emirate of Dubai – as issued from the Establishment itself – while the allocation of a separate category for businesses managed from the home helps emphasize the importance the Emirate has attached to these projects.
With regard to the conditions for participation on the level of the UAE, the main requirement is that the business is legally registered, headquartered in the UAE, and that it meets the requirements of the official definition of SMES in the Emirate of Dubai. The business must also be completely owned and managed by UAE nationals. Businesses nominated for the award are categorized by age as follows: HbBs, start-ups (up to three years), or existing companies (three years or more).
The previous discussion highlighted the main initiatives and efforts targeting HbB development in the UAE and how they have received an official stamp. In this regard, the following can be extracted:
• Formal Registration: A number of Emirates (Dubai, Sharjah, and Abu Dhabi) have adopted efforts to legalize the status of businesses operating from the home through the Emirate’s Department of Economic Development issuing licenses for businesses. Thus they are treated as an independent category of businesses and a distinction is made between HbBs and businesses which are not managed from the home (conventional businesses).
• Qualitative Targeting: In accordance with the conservative environment of the UAE, the Mubdaih License targets women only in the Emirate of Abu Dhabi. Thus not all citizens may utilize this license so that it is viewed as a mechanism for social empowerment rather than a model for managing economic activity from the home.
4140 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• A calligraphy or drawing store,
• Handicraft and environmental craft work,
• Interior design (décor),
• Printing and document photocopying services,
• Retail sale of milk,
• Retail sale of spices and perfumery,
• Retail sale of cosmetics,
• Beauty and personal care center for women,
• Parties and recreational event planning,
• Tailoring and sewing women’s clothing,
• Arranging natural and artificial flowers,
• Henna tattoos,
• Training for women’s beauty salon work,
• Retail sale of Arab clothing, and
• Thread embroidery and beading.
This is coupled with acquiring a Mubdaih License in order to obtain a number of benefits available for HbBs with the goal of encouraging the businesses to participate and develop their work. These benefits include:
• Women applying to register with Mubdiah Program receives a 50% discount on the business activities fee for the Abu Dhabi Chamber of Industry and Commerce
• The process of obtaining a license is facilitated
• Mubdiah Program members receive membership in the Abu Dhabi Business Women Council
• Women are granted an Emirati Card and enjoy all associated benefits
• The woman is granted the opportunity to participate in exhibitions and conferences organized by the Abu Dhabi Business Woman Council,
• Meetings with business women affiliated with the Council and their counterparts from outside of the country are held to share experience and job opportunities
• The woman is granted the opportunity to participate in training and rehabilitation courses organized by the Abu Dhabi Chamber of Commerce and Industry and the Abu Dhabi Business Woman Council
• Creative products are promoted through: The Abu Dhabi Business Woman Council Website – The Business Woman Manual – Various exhibitions and events
5.4 The Mohammed bin Rashid Awards for Young Business LeadersIn 2004 the Mohammed bin Rashid Establishment launched an annual award program called “The Mohammed bin Rashid Award for Young Business Leaders” with the goal of creating a competitive environment for young business leaders as well as honoring outstanding performance. The award also seeks to honor and incentivize individuals and institutions which have helped develop young business leaders’ performance. The award seeks to create a platform through which the creative energies of young investor SME owners can be celebrated in order to create a new generation of businessmen and women capable of building local economic potential.
The ninth round of the award –that was launched in January 2015 - includes four main categories, which are as follows (Mohammed bin Rashid Award for Young Business Leaders):
• Category I: At the level of the UAE, to honor the best SMEs across the country in the service, industry, and trade sectors, in addition to the category of businesses that are practiced from home in the Emirate of Dubai (Launch) and other Emirates, and the best SMEs in the Islamic economy sector,
• Category II: At the level of the Arab world, to honor the best SMES in the Arab world in the service, industry, and trade sectors, in addition to the best SMEs in Islamic economy,
• Category III: Best entrepreneur in the UAE, and
• Category IV: At the level of supporting entities, to honor the best entities supporting entrepreneurs and SMEs across the following sub-categories: The government procurement program (UAE), schools, universities, networks of business mentors, development banks, commercial banks, and supporting initiatives.
With regard to the first category, which focuses on the UAE, the first three sectors of the prize category represent the sectors that comprise the official definition of SMEs in the Emirate of Dubai – as issued from the Establishment itself – while the allocation of a separate category for businesses managed from the home helps emphasize the importance the Emirate has attached to these projects.
With regard to the conditions for participation on the level of the UAE, the main requirement is that the business is legally registered, headquartered in the UAE, and that it meets the requirements of the official definition of SMES in the Emirate of Dubai. The business must also be completely owned and managed by UAE nationals. Businesses nominated for the award are categorized by age as follows: HbBs, start-ups (up to three years), or existing companies (three years or more).
The previous discussion highlighted the main initiatives and efforts targeting HbB development in the UAE and how they have received an official stamp. In this regard, the following can be extracted:
• Formal Registration: A number of Emirates (Dubai, Sharjah, and Abu Dhabi) have adopted efforts to legalize the status of businesses operating from the home through the Emirate’s Department of Economic Development issuing licenses for businesses. Thus they are treated as an independent category of businesses and a distinction is made between HbBs and businesses which are not managed from the home (conventional businesses).
• Qualitative Targeting: In accordance with the conservative environment of the UAE, the Mubdaih License targets women only in the Emirate of Abu Dhabi. Thus not all citizens may utilize this license so that it is viewed as a mechanism for social empowerment rather than a model for managing economic activity from the home.
4342 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
6. The Kingdom of Saudi ArabiaThe Kingdom of Saudi Arabia has expressed a significant interest in productive families in their capacity as the main model for businesses managed from the home for social and economic reasons utilized by a wide range of women in light of the conservative environment of Saudi society, and Islamic teachings which control the mixing of the sexes at work. Despite state encouragement for these businesses on the one hand and the growing demand for such businesses on the other, an urgent need has emerged to regulate this informal sector.
Thus, at the moment the Kingdom is moving toward regulating businesses managed from the home in light of a serious initiative presented to the National Women’s Committee in the Council of Saudi Chambers through the participation of eight ministries. The Council also seeks to cooperate with the Saudi Arabian Ministry of Commerce and Industry to create a legislative and regulatory framework for businesses managed from the home, and as such the issuance of a law addressing this subject is under consideration. The following discussion strives to shed light on these issues.
6.1 The Executive Program for Licensing the Practice of Work from Home In light of a lack of work opportunities capable of accommodating the workforce in general and women in particular, as well as the conservative nature of society, the Council of Saudi Chambers and the National Women’s Committee took on efforts to develop the Executive Program for Licensing the Practice of Work from Home in cooperation with eight governmental bodies in 2014. This is linked to reviewing the home-based work project as a way to mitigate the problem of unemployment and avoid the resulting social and economic implications. The program may also increase the volume of goods and services, enhance living standards, and push the wheel of economic development forward.
This program has been developed by utilizing various relevant experiences, at the forefront of which is the Emirati experience as embodied in the Intilaq Program. Thus this was accompanied by a recommendation sent to the Ministry of Commerce and Industry on a home-based work law in the Kingdom, which allows individuals and families to establish commercial businesses from their homes through a special license. This helped reduce evasion of commercial licensing systems on the one hand and achieving a positive economic impact on the other, as follows:
• Strengthening the role that low-income individuals and families play in contributing to productivity and development and enhancing their standard of living,
• Providing opportunities for creativity for specific groups in the community, such as women, the disabled, and those with special needs,
• Opening channels for Saudis of both genders and reducing unemployment, and
• Facilitating youth of both genders to begin self-employment.
With regard to formulating a general framework for the executive program, a working group has been formed to do so through the participation of the National Women’s Council, the General Organization for Technical and Vocational Training, the Riyadh Chamber of Commerce and Industry, the Human Resource Development Fund, and the Council of Saudi Chambers. The overall objective of the Women’s Council was specified as “supporting and organizing women’s work from the home.”
In this context, a working group formulated the general regulations and conditions for HbBs, which applies to all activities that may be licensed by the concerned authorities. These regulations are as follows:
4342 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
6. The Kingdom of Saudi ArabiaThe Kingdom of Saudi Arabia has expressed a significant interest in productive families in their capacity as the main model for businesses managed from the home for social and economic reasons utilized by a wide range of women in light of the conservative environment of Saudi society, and Islamic teachings which control the mixing of the sexes at work. Despite state encouragement for these businesses on the one hand and the growing demand for such businesses on the other, an urgent need has emerged to regulate this informal sector.
Thus, at the moment the Kingdom is moving toward regulating businesses managed from the home in light of a serious initiative presented to the National Women’s Committee in the Council of Saudi Chambers through the participation of eight ministries. The Council also seeks to cooperate with the Saudi Arabian Ministry of Commerce and Industry to create a legislative and regulatory framework for businesses managed from the home, and as such the issuance of a law addressing this subject is under consideration. The following discussion strives to shed light on these issues.
6.1 The Executive Program for Licensing the Practice of Work from Home In light of a lack of work opportunities capable of accommodating the workforce in general and women in particular, as well as the conservative nature of society, the Council of Saudi Chambers and the National Women’s Committee took on efforts to develop the Executive Program for Licensing the Practice of Work from Home in cooperation with eight governmental bodies in 2014. This is linked to reviewing the home-based work project as a way to mitigate the problem of unemployment and avoid the resulting social and economic implications. The program may also increase the volume of goods and services, enhance living standards, and push the wheel of economic development forward.
This program has been developed by utilizing various relevant experiences, at the forefront of which is the Emirati experience as embodied in the Intilaq Program. Thus this was accompanied by a recommendation sent to the Ministry of Commerce and Industry on a home-based work law in the Kingdom, which allows individuals and families to establish commercial businesses from their homes through a special license. This helped reduce evasion of commercial licensing systems on the one hand and achieving a positive economic impact on the other, as follows:
• Strengthening the role that low-income individuals and families play in contributing to productivity and development and enhancing their standard of living,
• Providing opportunities for creativity for specific groups in the community, such as women, the disabled, and those with special needs,
• Opening channels for Saudis of both genders and reducing unemployment, and
• Facilitating youth of both genders to begin self-employment.
With regard to formulating a general framework for the executive program, a working group has been formed to do so through the participation of the National Women’s Council, the General Organization for Technical and Vocational Training, the Riyadh Chamber of Commerce and Industry, the Human Resource Development Fund, and the Council of Saudi Chambers. The overall objective of the Women’s Council was specified as “supporting and organizing women’s work from the home.”
In this context, a working group formulated the general regulations and conditions for HbBs, which applies to all activities that may be licensed by the concerned authorities. These regulations are as follows:
4544 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• The activity owner must be a female Saudi Arabian citizen residing in the Kingdom of Saudi Arabia.
• She must pledge to assume any material or moral claims toward others.
• The license shall be for one activity only.
• The activity must fall within the list of permitted activities, as specified by the concerned authorities.
• The business must not cause any damage to public health or the environment and may not form a burden on public utilities.
• Adherence to the principles and teachings of Islam and prevailing social traditions and customs is required.
• The licensee must practice the work on her own or with the help of her family.
• Knowledge of the skills needed to practice the craft or productive activity is required and must be proven through either an academic qualification or a certificate to practice the profession.
• The space must be suitable and equipped with anything required for the licensed activity, including safety and security regulations.
• The licensee must hold a health certificate which proves her ability to practice the activity for the activities that require such.
• Personal identification or valid residency for non-Saudi Arabians is required if it is absolutely necessary that they are present, while keeping adherence to the residency and work law in mind.
• The home must be owned by the licensee or one of her first-degree relatives, or she must hold approval from the landlord (if the dwelling is rented) for activities which require receiving clients on an ongoing basis.
• The licensing body must be notified if the activity headquarters is changed.
• The activity must be practiced in a separate area of the home.
• The license number must be displayed in a clear location on the external door of the activity headquarters and in advertisements.
• The licensing body must be entitled to end or stop any activity that does not comply with regulations and conditions.
In order to determine the activities authorized to be practiced as HbB, a work team met separately with representatives of the authorities charged with issuing licenses and reviewed licensing measures for existing businesses in order to specify the activities and regulations pertaining to the businesses and which activities may be licensed for practice from the home. Based on this, the activities authorized to be practiced as an HbB according to the licensing body are as follows. Appendix 1 shows the conditions and regulations pertaining to activities of a special nature (Saudi Council of Chambers, 2014):
• The Ministry of Municipal and Rural Affairs (Secretariats and Municipalities): Sewing, embroidering, and designing runners of all kinds, design and manufacture of women’s abayas, design, sale, and renting of ready-made clothes, hairdressing and makeup, selling cosmetics, preparing and cooking food, food manufacturing, such as jams, pickles, cheese, and desserts, packaging, manufacturing, and selling dates, holding bazaars, printing and photocopying research studies and lectures, manufacturing and selling perfumes and incense, catering and wedding services, laboratories to make wax, nurseries selling houseplants, production and marketing of accessories, production of artifacts and handicrafts, and beautifying, decorating, and selling pots.
• Ministry of Commerce and Industry: Interior design, consultations (administration, finance, technical, economic, social, child-rearing, health, educational, engineering, security, media, environmental, communications and information technology, Zakat and income tax, mining, geology, computers, safety, pharmacy, industry, hotels, physics, laboratory, chemical, agriculture, customs, engineering safety)
Maintaining and configurating computers, maintaining electronic devices, jewelry design, importing and wholesale trade, commercial supplies and marketing on behalf of others, real estate marketing.
Submitting proposals and technical solutions in the communications and information technology field, providing protection solutions for software and technical equipment, providing information systems services and document administration and electronic archiving programs, designing and developing computer programs, e-marketing, selling mobile communications devices, licensed fixed communications, and accessories, spare parts, and maintenance, establishing, programming, and supporting computer network systems and Internet networks, manufacturing and assembling communications devices and licensed information technology, supporting, maintaining, and developing communications and information technology systems and programs, designing databases, GIS, and E-commerce.
• The General Organization for Technical Education and Vocational Training: Licensing for fashion design and sewing training, food manufacturing, cooking, photography, cosmetology, training female workers, interior design, development courses, web design, technical support (maintaining computer and desktop devices, designing jewelry)
Conditions for issuing a license from the Female Trainers’ Association to practice the training occupation from the home: a certificate must be issued by a trainer accredited by the Association, the training package must be approved by the Association, and the applicant may be no younger than 21 years old.
• The General Authority for Tourism and Antiques: In the field of tourism: Tour guide, designing tourism programs, organizing tourism trips, travel and tourism services. In the field of antiques: Renovating an artifact of cultural heritage, museum guide, heritage event organizer, and producing copies of artifacts and commemorative statues.
• Ministry of Education: Reinforcement lessons, designing educational curricula, kindergarten, activity center, and designing teaching aids.
• The Ministry of Social Affairs: Hosting children, hosting the elderly, and hosting those with special needs.
4544 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• The activity owner must be a female Saudi Arabian citizen residing in the Kingdom of Saudi Arabia.
• She must pledge to assume any material or moral claims toward others.
• The license shall be for one activity only.
• The activity must fall within the list of permitted activities, as specified by the concerned authorities.
• The business must not cause any damage to public health or the environment and may not form a burden on public utilities.
• Adherence to the principles and teachings of Islam and prevailing social traditions and customs is required.
• The licensee must practice the work on her own or with the help of her family.
• Knowledge of the skills needed to practice the craft or productive activity is required and must be proven through either an academic qualification or a certificate to practice the profession.
• The space must be suitable and equipped with anything required for the licensed activity, including safety and security regulations.
• The licensee must hold a health certificate which proves her ability to practice the activity for the activities that require such.
• Personal identification or valid residency for non-Saudi Arabians is required if it is absolutely necessary that they are present, while keeping adherence to the residency and work law in mind.
• The home must be owned by the licensee or one of her first-degree relatives, or she must hold approval from the landlord (if the dwelling is rented) for activities which require receiving clients on an ongoing basis.
• The licensing body must be notified if the activity headquarters is changed.
• The activity must be practiced in a separate area of the home.
• The license number must be displayed in a clear location on the external door of the activity headquarters and in advertisements.
• The licensing body must be entitled to end or stop any activity that does not comply with regulations and conditions.
In order to determine the activities authorized to be practiced as HbB, a work team met separately with representatives of the authorities charged with issuing licenses and reviewed licensing measures for existing businesses in order to specify the activities and regulations pertaining to the businesses and which activities may be licensed for practice from the home. Based on this, the activities authorized to be practiced as an HbB according to the licensing body are as follows. Appendix 1 shows the conditions and regulations pertaining to activities of a special nature (Saudi Council of Chambers, 2014):
• The Ministry of Municipal and Rural Affairs (Secretariats and Municipalities): Sewing, embroidering, and designing runners of all kinds, design and manufacture of women’s abayas, design, sale, and renting of ready-made clothes, hairdressing and makeup, selling cosmetics, preparing and cooking food, food manufacturing, such as jams, pickles, cheese, and desserts, packaging, manufacturing, and selling dates, holding bazaars, printing and photocopying research studies and lectures, manufacturing and selling perfumes and incense, catering and wedding services, laboratories to make wax, nurseries selling houseplants, production and marketing of accessories, production of artifacts and handicrafts, and beautifying, decorating, and selling pots.
• Ministry of Commerce and Industry: Interior design, consultations (administration, finance, technical, economic, social, child-rearing, health, educational, engineering, security, media, environmental, communications and information technology, Zakat and income tax, mining, geology, computers, safety, pharmacy, industry, hotels, physics, laboratory, chemical, agriculture, customs, engineering safety)
Maintaining and configurating computers, maintaining electronic devices, jewelry design, importing and wholesale trade, commercial supplies and marketing on behalf of others, real estate marketing.
Submitting proposals and technical solutions in the communications and information technology field, providing protection solutions for software and technical equipment, providing information systems services and document administration and electronic archiving programs, designing and developing computer programs, e-marketing, selling mobile communications devices, licensed fixed communications, and accessories, spare parts, and maintenance, establishing, programming, and supporting computer network systems and Internet networks, manufacturing and assembling communications devices and licensed information technology, supporting, maintaining, and developing communications and information technology systems and programs, designing databases, GIS, and E-commerce.
• The General Organization for Technical Education and Vocational Training: Licensing for fashion design and sewing training, food manufacturing, cooking, photography, cosmetology, training female workers, interior design, development courses, web design, technical support (maintaining computer and desktop devices, designing jewelry)
Conditions for issuing a license from the Female Trainers’ Association to practice the training occupation from the home: a certificate must be issued by a trainer accredited by the Association, the training package must be approved by the Association, and the applicant may be no younger than 21 years old.
• The General Authority for Tourism and Antiques: In the field of tourism: Tour guide, designing tourism programs, organizing tourism trips, travel and tourism services. In the field of antiques: Renovating an artifact of cultural heritage, museum guide, heritage event organizer, and producing copies of artifacts and commemorative statues.
• Ministry of Education: Reinforcement lessons, designing educational curricula, kindergarten, activity center, and designing teaching aids.
• The Ministry of Social Affairs: Hosting children, hosting the elderly, and hosting those with special needs.
4746 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• The Communications and Information Technology Commission: Audio text services, short message services, electronic communication via subscription services, email services, network monitoring, domain name registration services in accordance with the rules and regulations organizing such, Internet content publishing services, and Internet advertising services.
• The Ministry of Culture and Information: Pre-printing services, drawing and calligraphy, photography—advertising, public relations, press services, production, sale, and renting of computer programs, consultative media studies, online printing, translation, photocopying and printing documents.
The executive mechanisms presented within the executive program document contain a set of mechanisms to facilitate the practice of work from the home, which are as follows (Council of Saudi Chambers, 2014):
• Sending a request to the Shura Council to adopt the “Work from Home” project and issuing a recommendation to the Cabinet to issue a royal decree approving the issuance of licenses for work from the home by licensing authorities according to their jurisdiction.
• Encouraging government agencies to facilitate licensing processes for work from home according to the jurisdiction of each.
• Encouraging government agencies which license businesses to take responsibility for establishing all mechanisms pertaining to licenses for work from home, including license issuing mechanisms, conditions for granting licenses, preparing the required forms and documents, preparing online systems, establishing benefits and mechanisms for supervision and assessment, and other administrative measures, taking care to publish all of this information on their websites.
• Coordination and cooperation between the Ministry of Culture and Information and the Council of Saudi Chambers with respect to the media aspect of the project.
• Encouraging entities supporting the project to design suitable support programs.
• Requesting that concerned government agencies ensure that the term of the license be no less than five years and that fees not exceed half of the fee for issuing licenses for the same activities conducted for a commercial purpose in order to facilitate and support men and women wishing to work from the home.
• Requesting that state officials issue a decision allowing female employees of government agencies to practice work from home under the condition that their position not be above the fifth ranking and that she spent three or more years at her job.
• Working to eliminate or reduce conditions impeding some government agencies from granting licenses to work from home.
6.2 The Productive Families ProgramThe Kingdom of Saudi Arabia, like many Arab countries, has adopted a program to support productive families which aims to develop the capabilities of these families through improving their skills and training, and provides opportunities to market their products. The program foundationally strives to support low-income families and transform them from dependent families (as most are beneficiaries of the social security program) into productive families that contribute to economic and social development and develop the national handicraft and home-based industries. In order to obtain services from productive families, a number of requirements must be fulfilled, the most important of which are as follows (The Saudi Arabian Ministry of Social Affairs, 2014):
• The applicant for support of a productive business must be a beneficiary of social security or a companion program.
• The applicant must be no younger than 20 and no older than 65.
• The applicant must be able to undertake the business and the business must fit the capabilities and experience of the applicant.
• The business must be competitive and economically feasible for the beneficiary.
• The cost of the project must be specified in detail in an attached statement along with quotes from suppliers.
• The project may not utilize migrant laborers.
• Preliminary approval must be obtained from the municipality and concerned authorities, and if this condition is met, the request for support submitted will be reviewed.
• The amount of support will be sent in one batch to the beneficiary HbB owner to his or her bank account.
• The office or administration responsible by proxy for productive businesses will follow up on the business in the field.
This program is implemented through two main mechanisms, the first of which provides material support and assistance to social security beneficiaries who wish to establish their own business. The second takes place through offering training programs to social security beneficiaries to develop their capabilities and energies.
A multiplicity of productive family projects have been supported by social security across two categories. The first category includes projects that benefit one individual and includes: Eastern perfumes, ma’mool, and incense, popular foods, leather goods and accessories, candles, the craft of sewing, shops selling fruits and vegetables, games, mobile phones, small grocery stores, women’s workshops, and student services. The second category includes collective businesses, meaning businesses that a group of families or individuals may benefit from, such as establishing a set of kiosks simultaneously to market a variety products which a number of individuals may enjoy.
On a related note, the General Administration for Social Development, a subsidiary of the Ministry of Social Affairs, launched the Intaje Initiative for Productive Families in December 2014. The Ministry began preparing this initiative in 2013, and through the program strives to activate productive families and help them market their products. The initiative also works to locate marketing outlets for productive families and propose legislation to protect and support such families by issuing marketing guides to be published widely.
The launch of this program involves a number of activities, the most important of which includes launching “The Marketing Guide for Productive Families in the Kingdom” after it is printed, which includes 5555 productive families from various parts of the Kingdom. This marketing guide was prepared by a specialized work team which inventoried productive families using a scientific approach based on field visits and interviews. The guide seeks to introduce productive families in all geographic regions across the Kingdom as well as the products they are known for and how to contact them.
4746 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• The Communications and Information Technology Commission: Audio text services, short message services, electronic communication via subscription services, email services, network monitoring, domain name registration services in accordance with the rules and regulations organizing such, Internet content publishing services, and Internet advertising services.
• The Ministry of Culture and Information: Pre-printing services, drawing and calligraphy, photography—advertising, public relations, press services, production, sale, and renting of computer programs, consultative media studies, online printing, translation, photocopying and printing documents.
The executive mechanisms presented within the executive program document contain a set of mechanisms to facilitate the practice of work from the home, which are as follows (Council of Saudi Chambers, 2014):
• Sending a request to the Shura Council to adopt the “Work from Home” project and issuing a recommendation to the Cabinet to issue a royal decree approving the issuance of licenses for work from the home by licensing authorities according to their jurisdiction.
• Encouraging government agencies to facilitate licensing processes for work from home according to the jurisdiction of each.
• Encouraging government agencies which license businesses to take responsibility for establishing all mechanisms pertaining to licenses for work from home, including license issuing mechanisms, conditions for granting licenses, preparing the required forms and documents, preparing online systems, establishing benefits and mechanisms for supervision and assessment, and other administrative measures, taking care to publish all of this information on their websites.
• Coordination and cooperation between the Ministry of Culture and Information and the Council of Saudi Chambers with respect to the media aspect of the project.
• Encouraging entities supporting the project to design suitable support programs.
• Requesting that concerned government agencies ensure that the term of the license be no less than five years and that fees not exceed half of the fee for issuing licenses for the same activities conducted for a commercial purpose in order to facilitate and support men and women wishing to work from the home.
• Requesting that state officials issue a decision allowing female employees of government agencies to practice work from home under the condition that their position not be above the fifth ranking and that she spent three or more years at her job.
• Working to eliminate or reduce conditions impeding some government agencies from granting licenses to work from home.
6.2 The Productive Families ProgramThe Kingdom of Saudi Arabia, like many Arab countries, has adopted a program to support productive families which aims to develop the capabilities of these families through improving their skills and training, and provides opportunities to market their products. The program foundationally strives to support low-income families and transform them from dependent families (as most are beneficiaries of the social security program) into productive families that contribute to economic and social development and develop the national handicraft and home-based industries. In order to obtain services from productive families, a number of requirements must be fulfilled, the most important of which are as follows (The Saudi Arabian Ministry of Social Affairs, 2014):
• The applicant for support of a productive business must be a beneficiary of social security or a companion program.
• The applicant must be no younger than 20 and no older than 65.
• The applicant must be able to undertake the business and the business must fit the capabilities and experience of the applicant.
• The business must be competitive and economically feasible for the beneficiary.
• The cost of the project must be specified in detail in an attached statement along with quotes from suppliers.
• The project may not utilize migrant laborers.
• Preliminary approval must be obtained from the municipality and concerned authorities, and if this condition is met, the request for support submitted will be reviewed.
• The amount of support will be sent in one batch to the beneficiary HbB owner to his or her bank account.
• The office or administration responsible by proxy for productive businesses will follow up on the business in the field.
This program is implemented through two main mechanisms, the first of which provides material support and assistance to social security beneficiaries who wish to establish their own business. The second takes place through offering training programs to social security beneficiaries to develop their capabilities and energies.
A multiplicity of productive family projects have been supported by social security across two categories. The first category includes projects that benefit one individual and includes: Eastern perfumes, ma’mool, and incense, popular foods, leather goods and accessories, candles, the craft of sewing, shops selling fruits and vegetables, games, mobile phones, small grocery stores, women’s workshops, and student services. The second category includes collective businesses, meaning businesses that a group of families or individuals may benefit from, such as establishing a set of kiosks simultaneously to market a variety products which a number of individuals may enjoy.
On a related note, the General Administration for Social Development, a subsidiary of the Ministry of Social Affairs, launched the Intaje Initiative for Productive Families in December 2014. The Ministry began preparing this initiative in 2013, and through the program strives to activate productive families and help them market their products. The initiative also works to locate marketing outlets for productive families and propose legislation to protect and support such families by issuing marketing guides to be published widely.
The launch of this program involves a number of activities, the most important of which includes launching “The Marketing Guide for Productive Families in the Kingdom” after it is printed, which includes 5555 productive families from various parts of the Kingdom. This marketing guide was prepared by a specialized work team which inventoried productive families using a scientific approach based on field visits and interviews. The guide seeks to introduce productive families in all geographic regions across the Kingdom as well as the products they are known for and how to contact them.
4948 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
This was also accompanied by the launch of the website for productive families called “Entaje” (http://entaje.com) which provides a database for the productive families contained in the guide. The website is searchable and can be downloaded as an application on mobile phones, also provides an introduction to the main products produced by productive families in addition to the latest relevant news. It is worth noting that a number of entities take part in this initiative, including the General Administration for Social Development and the Social Charity Fund in addition to the Social Security Administration, charity, cooperative, and handicraft associations, and the Saudi Credit and Saving Bank. The initiative plans to conduct a number of other supporting activities, at the forefront of which is:
• Launching a media campaign to explain the initiative and its goals and preparing an introductory leaflet,
• Striving to create marketing outlets in 13 different regions of the Kingdom,
• Organizing marketing exhibitions in various areas of the Kingdom and holding academic seminars for productive families each day,
In order to provide the funding required by productive families, the Saudi Credit and Savings Bank has adopted the Productive Families Track, a financial product which aims to finance productive families to encourage female engagement in self-employment from their homes and utilize their skills to find a permanent source of income. The project will be funded by the bank with no more than SAR 50,000 and the HbB owner is not required to provide any self-funding. With regard to the general requirements that must be met by the funding applicant, they are based on Article Five of the Executive Regulations for funding small and emerging enterprises, which describes the requirements as follows (Saudi Credit and Savings Bank, 2015):
• The woman requesting the funding must be a Saudi citizen and meet the application requirements.
• She must have the appropriate experience or qualifications to work on the business and manage it.
• She may not be younger than 18 years old.
• She may not own any entity other than the one she is requesting funding for, nor may she be a partner in another business at the time of applying.
• She must not be an applicant in two or more bank financing programs.
• She must be free to devote herself to managing the business.
The bank has also specified technical conditions required for productive (home-based) family businesses in order to grant funding as follows:
• The business must be among the businesses that the bank funds.
• The business must be economically feasible.
• The business may not interfere with environmental, health, or occupational safety requirements.
With regard to the provisions and obligations for applying for funding, the bank requires that the applicant adhere to a number of pledges. If the applicant breaches such pledges, the bank shall be entitled to cancel the request at any time, and the applicant is required to return the entire amount of the loan. These pledges are as follows:
• A pledge regarding the authenticity and accuracy of information provided on the funding application, personal interview, and documents submitted,
• A pledge to be available to manage the business which requires funding after signing the funding contract with the bank,
• Acknowledgement of having reviewed the bank’s executive regulations for funding and supporting small and emerging enterprises, and full commitment to the contents in terms of instructions and procedures,
• The provision of an adversarial bond signed by the women’s guardian or a relative in order to bring the borrower to the bank upon the bank’s request to do so,
• A pledge to provide all information about the business during its establishment and after it begins operating as well as a pledge to inform the bank of all information requested by the bank regarding the business, and
• Acknowledgement of awareness that the loan will be repaid through monthly installments.
In order to obtain funding from the Productive Families Track, the HbB owner submits a funding application online which is received by the bank. The bank then verifies whether the application complies with general and technical requirements. If it is compatible with these requirements, a personal interview is held with the applicant. If the applicant passes the interview successfully, a simple study of the business is provided (upon request) and a loan agreement signed. The funding amount is then disbursed.
In addition to providing funding services to productive family businesses, Saudi Credit and Savings Bank presents an Outstanding Business Award in light of the bank’s role in encouraging SME owners and highlighting successful experiences and models within the community. This forms part of the bank’s strategic plan to support self-employment and entrepreneurs in the Kingdom and generate a competitive spirit surrounding performance quality for SMEs. This award is granted annually to the most successful business funded by the bank, and the top ten successful businesses are also honored. It is worth noting that the award involves three tracks, which are: the invention and excellence track, the start-up track, and the productive families track. The five key evaluation criteria are:
• Financial performance: This includes the existence of an accounting system, business profitability, and sales growth rates.
• Administrative performance: This includes the presence of an effective administrative system as well as planning, organization, direction, and supervision.
• Quality: This includes product and service quality, adherence to deadlines, and the existence of standards to measure services and customer satisfaction.
• Marketing Performance: This includes the presence of a marketing plan, business reputation, new means for marketing and serving customers, geographic expansion, and expansion in terms of products and services.
• Competitive advantage: Saudization, innovating new methods for work, exportation, and receiving appreciative awards.
4948 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
This was also accompanied by the launch of the website for productive families called “Entaje” (http://entaje.com) which provides a database for the productive families contained in the guide. The website is searchable and can be downloaded as an application on mobile phones, also provides an introduction to the main products produced by productive families in addition to the latest relevant news. It is worth noting that a number of entities take part in this initiative, including the General Administration for Social Development and the Social Charity Fund in addition to the Social Security Administration, charity, cooperative, and handicraft associations, and the Saudi Credit and Saving Bank. The initiative plans to conduct a number of other supporting activities, at the forefront of which is:
• Launching a media campaign to explain the initiative and its goals and preparing an introductory leaflet,
• Striving to create marketing outlets in 13 different regions of the Kingdom,
• Organizing marketing exhibitions in various areas of the Kingdom and holding academic seminars for productive families each day,
In order to provide the funding required by productive families, the Saudi Credit and Savings Bank has adopted the Productive Families Track, a financial product which aims to finance productive families to encourage female engagement in self-employment from their homes and utilize their skills to find a permanent source of income. The project will be funded by the bank with no more than SAR 50,000 and the HbB owner is not required to provide any self-funding. With regard to the general requirements that must be met by the funding applicant, they are based on Article Five of the Executive Regulations for funding small and emerging enterprises, which describes the requirements as follows (Saudi Credit and Savings Bank, 2015):
• The woman requesting the funding must be a Saudi citizen and meet the application requirements.
• She must have the appropriate experience or qualifications to work on the business and manage it.
• She may not be younger than 18 years old.
• She may not own any entity other than the one she is requesting funding for, nor may she be a partner in another business at the time of applying.
• She must not be an applicant in two or more bank financing programs.
• She must be free to devote herself to managing the business.
The bank has also specified technical conditions required for productive (home-based) family businesses in order to grant funding as follows:
• The business must be among the businesses that the bank funds.
• The business must be economically feasible.
• The business may not interfere with environmental, health, or occupational safety requirements.
With regard to the provisions and obligations for applying for funding, the bank requires that the applicant adhere to a number of pledges. If the applicant breaches such pledges, the bank shall be entitled to cancel the request at any time, and the applicant is required to return the entire amount of the loan. These pledges are as follows:
• A pledge regarding the authenticity and accuracy of information provided on the funding application, personal interview, and documents submitted,
• A pledge to be available to manage the business which requires funding after signing the funding contract with the bank,
• Acknowledgement of having reviewed the bank’s executive regulations for funding and supporting small and emerging enterprises, and full commitment to the contents in terms of instructions and procedures,
• The provision of an adversarial bond signed by the women’s guardian or a relative in order to bring the borrower to the bank upon the bank’s request to do so,
• A pledge to provide all information about the business during its establishment and after it begins operating as well as a pledge to inform the bank of all information requested by the bank regarding the business, and
• Acknowledgement of awareness that the loan will be repaid through monthly installments.
In order to obtain funding from the Productive Families Track, the HbB owner submits a funding application online which is received by the bank. The bank then verifies whether the application complies with general and technical requirements. If it is compatible with these requirements, a personal interview is held with the applicant. If the applicant passes the interview successfully, a simple study of the business is provided (upon request) and a loan agreement signed. The funding amount is then disbursed.
In addition to providing funding services to productive family businesses, Saudi Credit and Savings Bank presents an Outstanding Business Award in light of the bank’s role in encouraging SME owners and highlighting successful experiences and models within the community. This forms part of the bank’s strategic plan to support self-employment and entrepreneurs in the Kingdom and generate a competitive spirit surrounding performance quality for SMEs. This award is granted annually to the most successful business funded by the bank, and the top ten successful businesses are also honored. It is worth noting that the award involves three tracks, which are: the invention and excellence track, the start-up track, and the productive families track. The five key evaluation criteria are:
• Financial performance: This includes the existence of an accounting system, business profitability, and sales growth rates.
• Administrative performance: This includes the presence of an effective administrative system as well as planning, organization, direction, and supervision.
• Quality: This includes product and service quality, adherence to deadlines, and the existence of standards to measure services and customer satisfaction.
• Marketing Performance: This includes the presence of a marketing plan, business reputation, new means for marketing and serving customers, geographic expansion, and expansion in terms of products and services.
• Competitive advantage: Saudization, innovating new methods for work, exportation, and receiving appreciative awards.
5150 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
6.3 Bena’a Productive Families Centre (Jana)Alongside government efforts to support productive families, civil society plays an important role in the same field. Thus Bena’a Productive Families Centre (Jana) was established in the year 2010 as a center specializing in building productive families. The Centre is managed by Sulaiman Bin Abdul Aziz Al Rajhi Charitable Foundation—and offers financial services and technical consultations to help families make a decent living and maintain their social independence.
Jana mainly targets women, working to empower them and strengthen their roles within the family and society, in addition to providing work opportunities for women in light of the scarcity of opportunities available on the market. In many cases, these women are the sole breadwinners for their families, and there is a dearth of entities providingthis type of service to such an important segment of society. Women are also capable of mastering and marketing many types of handicrafts.
The services offered by Jana include favorable loans for clients that don’t come with traditional guarantees and instead rely on the principle of a collective guarantee for women amongst themselves. Loans are provided gradually in order to allow the beneficiary to access an individual loan for a small business over the following stages: First – SAR 3,000, second – SAR 4,800, third – 7,500, fourth – 9,000, and fifth – 12,000. It is worth noting that after the third phase, the business may move to the ‘promising projects’ category, which is worth SAR 15,000 - SAR100,000.
It is worth noting that Centre performance indicators point out that 99% of loans have been paid and the businesses supported by the Centre boast a 93% Saudization rate. Additionally, the percentage of businesses who made profits reached 92%. Through partnerships with civil society organizations and finance and businessmen, Jana has helped promote corporate social responsibility and establish the concept of social capital. Bena’a Productive Families Centre has signed agreements with Bank AlJizira, ATCO, the Saudi Steel Pipe Company, the Social Takafol Project, and the National Committee for Prisoners, their Families and Ex-Convicts (Tarahum).
A joint venture with Saudi Arabia’s Aramco was implemented to train productive families in some regions of the Kingdom. Likewise, the Centre concluded an agreement with the Al Rajhi Bank which is considered the first of its kind to provide a funding portfolio for productive families and small businesses. The bank provided support valuing SAR 3,000,000 in 2013 to develop Centre clients, with SAR 300,000 allocated to each operationto develop their distinctive businesses and move away from home-based, unregistered work. This allows women to become owners of registered businesses that are competitive in the market and boast commercial locations.
On a related note, the Saudi Credit and Savings Bank signed an agreement with the Centre in the year 2014 to make the latter one of the main sponsors of the SME sector. The agreement seeks to support, sponsor, and fund productive families and micro-businesses whose investment costs do not exceed SAR 50,000. The program has been allocated a portfolio worth SAR 36,000,000.
The previous discussion highlighted basic issues pertaining to productive families in the Kingdom of Saudi Arabia and current approaches to legislating and regulating HbBs. The following can be extracted:
• The Kingdom pays special interest to productive family businesses as well as existing HbBs for economic and social purposes with a focus on strengthening female entrepreneurship. The objective is to reduce female unemployment in a manner consistent with societal customs and Islamic Sharia.
• The Kingdom has taken a special interest in productive family businesses, having provided them both support through the Ministry of Social Affairs as well as necessary funding on favorable terms through the Saudi Credit and Savings Bank. The Bank also celebrates distinction among these businesses by allocating them a track within the Outstanding Business Award which is given out each year.
• The executive program to regulate the practice of HbBs follows in the footsteps of Dubai, through providing a license for a limited term. Thus a distinction is made between HbB’s and non-HbBs established in accordance with the country’s laws.
• The executive program to regulate the practice of HbBs in coordination with eight main ministries, allows for a wide sector of activities to be practiced from the home, as the regulations and conditions required for some of these activities have been specified in detail. The Kingdom is also currently studying a proposal to issue a law regulating HbBs through the Ministry of Commerce and Industry.
• The role that could be played by financial and business institutions to provide financial and technical support to productive family/home-based businesses through strengthening corporate social responsibility
5150 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
6.3 Bena’a Productive Families Centre (Jana)Alongside government efforts to support productive families, civil society plays an important role in the same field. Thus Bena’a Productive Families Centre (Jana) was established in the year 2010 as a center specializing in building productive families. The Centre is managed by Sulaiman Bin Abdul Aziz Al Rajhi Charitable Foundation—and offers financial services and technical consultations to help families make a decent living and maintain their social independence.
Jana mainly targets women, working to empower them and strengthen their roles within the family and society, in addition to providing work opportunities for women in light of the scarcity of opportunities available on the market. In many cases, these women are the sole breadwinners for their families, and there is a dearth of entities providingthis type of service to such an important segment of society. Women are also capable of mastering and marketing many types of handicrafts.
The services offered by Jana include favorable loans for clients that don’t come with traditional guarantees and instead rely on the principle of a collective guarantee for women amongst themselves. Loans are provided gradually in order to allow the beneficiary to access an individual loan for a small business over the following stages: First – SAR 3,000, second – SAR 4,800, third – 7,500, fourth – 9,000, and fifth – 12,000. It is worth noting that after the third phase, the business may move to the ‘promising projects’ category, which is worth SAR 15,000 - SAR100,000.
It is worth noting that Centre performance indicators point out that 99% of loans have been paid and the businesses supported by the Centre boast a 93% Saudization rate. Additionally, the percentage of businesses who made profits reached 92%. Through partnerships with civil society organizations and finance and businessmen, Jana has helped promote corporate social responsibility and establish the concept of social capital. Bena’a Productive Families Centre has signed agreements with Bank AlJizira, ATCO, the Saudi Steel Pipe Company, the Social Takafol Project, and the National Committee for Prisoners, their Families and Ex-Convicts (Tarahum).
A joint venture with Saudi Arabia’s Aramco was implemented to train productive families in some regions of the Kingdom. Likewise, the Centre concluded an agreement with the Al Rajhi Bank which is considered the first of its kind to provide a funding portfolio for productive families and small businesses. The bank provided support valuing SAR 3,000,000 in 2013 to develop Centre clients, with SAR 300,000 allocated to each operationto develop their distinctive businesses and move away from home-based, unregistered work. This allows women to become owners of registered businesses that are competitive in the market and boast commercial locations.
On a related note, the Saudi Credit and Savings Bank signed an agreement with the Centre in the year 2014 to make the latter one of the main sponsors of the SME sector. The agreement seeks to support, sponsor, and fund productive families and micro-businesses whose investment costs do not exceed SAR 50,000. The program has been allocated a portfolio worth SAR 36,000,000.
The previous discussion highlighted basic issues pertaining to productive families in the Kingdom of Saudi Arabia and current approaches to legislating and regulating HbBs. The following can be extracted:
• The Kingdom pays special interest to productive family businesses as well as existing HbBs for economic and social purposes with a focus on strengthening female entrepreneurship. The objective is to reduce female unemployment in a manner consistent with societal customs and Islamic Sharia.
• The Kingdom has taken a special interest in productive family businesses, having provided them both support through the Ministry of Social Affairs as well as necessary funding on favorable terms through the Saudi Credit and Savings Bank. The Bank also celebrates distinction among these businesses by allocating them a track within the Outstanding Business Award which is given out each year.
• The executive program to regulate the practice of HbBs follows in the footsteps of Dubai, through providing a license for a limited term. Thus a distinction is made between HbB’s and non-HbBs established in accordance with the country’s laws.
• The executive program to regulate the practice of HbBs in coordination with eight main ministries, allows for a wide sector of activities to be practiced from the home, as the regulations and conditions required for some of these activities have been specified in detail. The Kingdom is also currently studying a proposal to issue a law regulating HbBs through the Ministry of Commerce and Industry.
• The role that could be played by financial and business institutions to provide financial and technical support to productive family/home-based businesses through strengthening corporate social responsibility
5352 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
7. The Kingdom of BahrainThe Bahraini experience is among the most distinctive in the Arabian Gulf with regard to developing HbBs. Bahrain has presented the Developing HbBs and Productive Family Businesses in the State of Bahrain to Become Major Industry Inputs Initiative to be discussed through the fourth session of the Arab Economic and Social Development Summit, which is planned to be held in Cairo in March 2015. This initiative is based on the successes achieved by the Step Program to develop HBBs in Bahrain alongside other efforts to develop productive families. Those efforts are highlighted in the following discussion.
7.1 The Framework Regulating HbBsThe businesses which craftsmen and women conduct from home form a part of the culture of a productive society, helping preserve identity and cultural and human legacy. A mechanism guiding work from home is expected to meet the many needs of individuals who wish to start a business of this variety.
Forming an effort to advance these businesses, a framework regulating HbBs was established through the issuance of Cabinet Decree No. 39 of the year 2010 regarding regulation of the practice of productive activities from the producer’s home by providing fixed buildings and facilities as productive units and a center for productive families in each province. The Decree principally strove to bring about a qualitative and quantitative change in productive family activities and also to advance the economic activities which family members carry out from the home.
The Decree also serves to encourage a culture of self-employment and private business and makes it possible to integrate individuals conducting many productive activities within the commerce, service, and handicrafts sectors specified by the Decree. Thus the Decree also allows families to utilize services which the Bahraini Social Development Ministry offers to productive families, including training, marketing, product development, and funding through the Family Bank.
It should be noted that the Ministry has established a number of centers supporting productive families which HbBs may also benefit from, which are as follows:
• Productive Families in the Free Market: A permanent exhibition was opened for productive families in the Bahrain International Airport as a center where Bahraini hand-made products can reach the multitude of nationalities that frequent the international airport,
• House of Khous and Barroy: This is considered a specialist shop for products made from palm leaves and where traditional children’s toys made by productive Bahraini families are sold.
• Al-Saya for the Productive Families Centre: This is an organization which helps and assists productive families’ businesses as well as micro-businesses by implementing a number of programs and initiatives to permanently promote and market their products. All of this takes place in the framework of a partnership with the Municipal Council and the Muharraq Governorate.
• Sitra Centre for Productive Families: This was established in the year 2006 to become a specialized center that works to develop handicrafts made from home by providing a healthy, suitable location for the businesses, helping productive families’ market food products, and providing a space that contains the largest number of productive families.
5352 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
7. The Kingdom of BahrainThe Bahraini experience is among the most distinctive in the Arabian Gulf with regard to developing HbBs. Bahrain has presented the Developing HbBs and Productive Family Businesses in the State of Bahrain to Become Major Industry Inputs Initiative to be discussed through the fourth session of the Arab Economic and Social Development Summit, which is planned to be held in Cairo in March 2015. This initiative is based on the successes achieved by the Step Program to develop HBBs in Bahrain alongside other efforts to develop productive families. Those efforts are highlighted in the following discussion.
7.1 The Framework Regulating HbBsThe businesses which craftsmen and women conduct from home form a part of the culture of a productive society, helping preserve identity and cultural and human legacy. A mechanism guiding work from home is expected to meet the many needs of individuals who wish to start a business of this variety.
Forming an effort to advance these businesses, a framework regulating HbBs was established through the issuance of Cabinet Decree No. 39 of the year 2010 regarding regulation of the practice of productive activities from the producer’s home by providing fixed buildings and facilities as productive units and a center for productive families in each province. The Decree principally strove to bring about a qualitative and quantitative change in productive family activities and also to advance the economic activities which family members carry out from the home.
The Decree also serves to encourage a culture of self-employment and private business and makes it possible to integrate individuals conducting many productive activities within the commerce, service, and handicrafts sectors specified by the Decree. Thus the Decree also allows families to utilize services which the Bahraini Social Development Ministry offers to productive families, including training, marketing, product development, and funding through the Family Bank.
It should be noted that the Ministry has established a number of centers supporting productive families which HbBs may also benefit from, which are as follows:
• Productive Families in the Free Market: A permanent exhibition was opened for productive families in the Bahrain International Airport as a center where Bahraini hand-made products can reach the multitude of nationalities that frequent the international airport,
• House of Khous and Barroy: This is considered a specialist shop for products made from palm leaves and where traditional children’s toys made by productive Bahraini families are sold.
• Al-Saya for the Productive Families Centre: This is an organization which helps and assists productive families’ businesses as well as micro-businesses by implementing a number of programs and initiatives to permanently promote and market their products. All of this takes place in the framework of a partnership with the Municipal Council and the Muharraq Governorate.
• Sitra Centre for Productive Families: This was established in the year 2006 to become a specialized center that works to develop handicrafts made from home by providing a healthy, suitable location for the businesses, helping productive families’ market food products, and providing a space that contains the largest number of productive families.
5554 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• Capital Mall for Hand-made Bahraini Products: This initiative helps and assists productive family businesses and micro-businesses by first supplying them with a store to sell or display products and regular public exhibitions in addition to a chain of specialized services, consultations, and guidance. The Mall also provides public services the center’s administration or a network of local cooperatives that work in the field of developing productive family businesses. The Mall represents one of the main tourism areas within the Kingdom and contains an integrated group of hand-made heritage Bahraini products which are difficult to find in one place.
7.2 “Khatwa” for Home-Based BusinessesThe Khatwa Program for HbBs is considered an extension of the productive families project which the Ministry of Social Development embraced by developing new productive families and advanced training programs, marketing centers, and centers to support the businesses. This project opens the field to attract youth, the unemployed, and Bahraini women who aspire toward economic empowerment and increasing family income. The field is also flexible for the elderly and the retired, and every Bahrain family or individual that does not have a commercial register and wish to work from home are entitled to apply to the Ministry to obtain a “productive home” license. This license allows them the advantage of legal registration without any financial costs required to do so.
The Ministry is keen to meet all needs and provide all facilities required for families and individuals to begin their HbBs and empower them economically and socially. Working from home provides an easy, flexible environment in terms of time and the business owner can be productive from the comfort of their home and in accordance with their other family obligations.
With regard to the registration mechanism for HbBs, a form for productive families—which is available in all social centers including the Capital Mall, the Sitra Centre, and the Al-Saya Centre—must be filled out along with a written letter. The activities authorized for HbBs to conduct are as follows:
• Groups of people with special skills: HbBs attract people who wish to work from the home in an occupation which can be practiced from the home and for which the commercial register law is not applicable,
• Groups of people that do not have a specific skill and wish to increase their income: This occurs after they receive specialized training in social centers for a period of three months and includes the following fields: The hair and makeup program, the women’s sewing program, the handicrafts program, glass art, candle-making, incense production, crochet, Bahraini quilting, gift wrapping, porcelain, household agriculture, computers, cooking, sewing abayas, decoupage, and doll-making.
It is worth mentioning that the Ministry designed a national system for the Khatwa Program for HbBs to ensure that all services offered to support HbBs are taken advantage of. These services are identified as follows in figure (1).
Thus there are a multiplicity of advantages available to productive home license holders, as they are able to obtain the following services:
• Obtaining a license to work from the producer’s home and registering the name commercially,
• Providing the funding required by the HbB through Family Bank,
• Enrolling in advanced training courses to help practice work from home,
• Enrolling in advanced training courses for occupational professionalism,
• Developing products through the innovation and design center at the Capital Mall for Home-made Bahraini Products,
• Receiving advice on entering the business world through the Excellence Center for Developing Micro Businesses at the Capital Mall, and
• Marketing products through product marketing centers and local and international exhibitions.
7.3 The Family BankThe establishment of the Family Bank, which was inaugurated in 2012, represents one of the most outstanding initiatives of the Bahraini experience over the past few years. This bank is an Islamic bank for financing micro-enterprises and works to empower low-income families to increase their income and by financing medium, small, and micro-enterprises, whether they be individuals or groups, including HbBs. The bank also offers technical assistance in the form of feasibility studies for businesses and training courses.
Financing
Marketing
Training
Encouragement
Legal Registration
Developing Products
In accordance with Cabinet Decree No. 39 of the year 2010 regarding regulating the productive home, a record entitled the Productive Home Register was created which contains information pertaining to productive activities practiced in the home, the identity of the
production activity owner. This is handled by the Ministry of Social Affairs which is called the ‘Registration Office’
Family Bank
The Capital Complex
Al Saya for the Productive Families Center
Design and Innovation Center – Advanced Sessions for Products
The Her Highness Princess Sabika Bint Ibrahim Al Khalifa Award
Workshops and Training Centers in Social Centers
Sitra Center for Productive Families
Exhibitions (The Made at Home Exhibition)
Excellence Center for Micro-Business Development
Figure 1: The Kingdom of Bahrain: The National System for the Khatwa Program for HbBs
5554 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• Capital Mall for Hand-made Bahraini Products: This initiative helps and assists productive family businesses and micro-businesses by first supplying them with a store to sell or display products and regular public exhibitions in addition to a chain of specialized services, consultations, and guidance. The Mall also provides public services the center’s administration or a network of local cooperatives that work in the field of developing productive family businesses. The Mall represents one of the main tourism areas within the Kingdom and contains an integrated group of hand-made heritage Bahraini products which are difficult to find in one place.
7.2 “Khatwa” for Home-Based BusinessesThe Khatwa Program for HbBs is considered an extension of the productive families project which the Ministry of Social Development embraced by developing new productive families and advanced training programs, marketing centers, and centers to support the businesses. This project opens the field to attract youth, the unemployed, and Bahraini women who aspire toward economic empowerment and increasing family income. The field is also flexible for the elderly and the retired, and every Bahrain family or individual that does not have a commercial register and wish to work from home are entitled to apply to the Ministry to obtain a “productive home” license. This license allows them the advantage of legal registration without any financial costs required to do so.
The Ministry is keen to meet all needs and provide all facilities required for families and individuals to begin their HbBs and empower them economically and socially. Working from home provides an easy, flexible environment in terms of time and the business owner can be productive from the comfort of their home and in accordance with their other family obligations.
With regard to the registration mechanism for HbBs, a form for productive families—which is available in all social centers including the Capital Mall, the Sitra Centre, and the Al-Saya Centre—must be filled out along with a written letter. The activities authorized for HbBs to conduct are as follows:
• Groups of people with special skills: HbBs attract people who wish to work from the home in an occupation which can be practiced from the home and for which the commercial register law is not applicable,
• Groups of people that do not have a specific skill and wish to increase their income: This occurs after they receive specialized training in social centers for a period of three months and includes the following fields: The hair and makeup program, the women’s sewing program, the handicrafts program, glass art, candle-making, incense production, crochet, Bahraini quilting, gift wrapping, porcelain, household agriculture, computers, cooking, sewing abayas, decoupage, and doll-making.
It is worth mentioning that the Ministry designed a national system for the Khatwa Program for HbBs to ensure that all services offered to support HbBs are taken advantage of. These services are identified as follows in figure (1).
Thus there are a multiplicity of advantages available to productive home license holders, as they are able to obtain the following services:
• Obtaining a license to work from the producer’s home and registering the name commercially,
• Providing the funding required by the HbB through Family Bank,
• Enrolling in advanced training courses to help practice work from home,
• Enrolling in advanced training courses for occupational professionalism,
• Developing products through the innovation and design center at the Capital Mall for Home-made Bahraini Products,
• Receiving advice on entering the business world through the Excellence Center for Developing Micro Businesses at the Capital Mall, and
• Marketing products through product marketing centers and local and international exhibitions.
7.3 The Family BankThe establishment of the Family Bank, which was inaugurated in 2012, represents one of the most outstanding initiatives of the Bahraini experience over the past few years. This bank is an Islamic bank for financing micro-enterprises and works to empower low-income families to increase their income and by financing medium, small, and micro-enterprises, whether they be individuals or groups, including HbBs. The bank also offers technical assistance in the form of feasibility studies for businesses and training courses.
Financing
Marketing
Training
Encouragement
Legal Registration
Developing Products
In accordance with Cabinet Decree No. 39 of the year 2010 regarding regulating the productive home, a record entitled the Productive Home Register was created which contains information pertaining to productive activities practiced in the home, the identity of the
production activity owner. This is handled by the Ministry of Social Affairs which is called the ‘Registration Office’
Family Bank
The Capital Complex
Al Saya for the Productive Families Center
Design and Innovation Center – Advanced Sessions for Products
The Her Highness Princess Sabika Bint Ibrahim Al Khalifa Award
Workshops and Training Centers in Social Centers
Sitra Center for Productive Families
Exhibitions (The Made at Home Exhibition)
Excellence Center for Micro-Business Development
Figure 1: The Kingdom of Bahrain: The National System for the Khatwa Program for HbBs
5756 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
The bank offers two basic funding products, the first being the Grameen Program which has been implemented in over forty countries around the world. Through this project the bank offers funding ranging from BHD 500 to BHD 3,000 according to the HbB owner’s expertise and performance on previous funding opportunities. New individuals participating in the program are able to obtain funding worth between BHD 500 to BHD 1500 only. It is worth noting that Grameen program members must open an account worth BHD 10 in the Family Bank added to their savings, and the beneficiary is required to add a minimum of BHD 5 per month to the account with each installment. Business owners must join the Taziz Program before receiving financing. The Taziz Program is a guidance program to strengthen awareness of project management before the business obtains financing. The program targets citizens only (Bahrainis) and the 21-58 age group. An application may be submitted through the Internet (the bank’s website).
The second product is the Small- and Micro-Business Support Program which provides both financial and consultative support to small- and micro-businesses. The financial support is directed toward the bank to cover operational expenses and purchase assets. The term of this financing ranges from 6-36 months and the value of financing ranges from BHD 3000-7000. This program also is for citizens only, targets the 21-58 age group, and requires that the applicant possess a commercial register.
On a related note, the Family Bank offers a number of non-financial services with the goal of strengthening clients’ ability to achieve success in commercial business by providing opportunities to obtain appropriate training and facilitate preparation of a business plan. The Bank also hosts and organizes professional training programs and workshops to strengthen talents and skills. Additionally, the Bank coordinates with the client guidance program through the leadership of professionals and experts to enhance the services provided and strengthen successes via press coverage and marketing techniques.
The bank further provides its clients the ability to participate in local and foreign exhibitions and markets with the goal of benefitting from experiences, building business relationship networks, displaying and selling existing products, or offering and testing new products. These exhibitions are held on a regular basis throughout the year and are considered basic channels for supporting business owners.
7.4 The Productive Family AwardWith a view toward providing moral support to productive families and HbBs, an incentive award is granted to the best productive family business in the Kingdom of Bahrain every two years. The award is called “The Her Royal Highness Princess Sabika Bint Ibrahim Al Khalifa Award.” Eventually the award was developed to include productive families in the Arab countries, and it is granted to the best productive Arab family, the best product, and the best supporter and sponsor of productive families.
This initiative helps incentivize low-income families to create small businesses and encourages and embraces the development of their talents and skills. The initiative also makes opportunities available to research additional sources to improve their economic situation and create self-employment opportunities for them. According to the decision to create the award, the main goals are as follows:
• Providing an introduction to the value of productive families’ businesses and their roles in strengthening social well-being
• Developing productive family businesses and doubling the productivity value of their goods and services
• Encouraging low-income families to become production units and increase their contributions to local economic development
• Unifying visions and exchanging experiences among productive Arab families, and introducing a variety of methods that help enhance the productive capacity of productive families
• Incentivizing financial, economic, and commercial institutions in Arab countries to support productive families’ businesses and helping finance and market their products
• Helping encourage families to develop their products to strengthens their financial yields as well as facilitating marketing efforts
The entities and people targeted by the award are: low-income Arab families, housewives who are capable of producing, governmental and non-governmental private institutions who support productive family businesses, and individuals that provide support and sponsorship to productive family businesses.
The first branch, the Best Productive Family Award, is given to the best family working to increase their income through both producing and relying on their capabilities to develop themselves by researching local development components available near the family and their environment. The family should develop these components and convert them into outstanding products which help them achieve a decent standard of living. The conditions for applying to the award are: That the business be the family’s main source of income, that the family members have a skill which they developed through training programs and practice, and that a significant change has occurred in the family’s standard of living.
The second branch, the Best Product Award, is given to the best product made by a productive family, regardless of whether this product is invented, designed, or developed directly by the family. The conditions for applying to the award are: That the product be designed and produced by a productive family by using raw materials and any equipment available, that the product have the potential to be marketed domestically and abroad, that the product be characterized by innovation, development, quality, and originality, and that there be evidence of product development since the start of the business.
The third branch, the Best Sponsor and Supporter of Productive Families Award, is designated for governmental, civil, and private institutions as well as individuals that contributed to supporting productive family businesses. The conditions for applying to the award are: That the sponsor play a main role in providing material, technical, and moral support to develop and market productive family products, that the sponsor make a clear contribution in previous years, and that the sponsor present a summary to the quality of support granted and the positive impact on beneficiary families that resulted from this support.
Thus the previous discussion shed light on basic issues related to developing HbBs in the Kingdom of Bahrain, the most important dimensions of which can be summarized as follows:
• The Kingdom took on a significant interest in HbBs and issued a Cabinet Decree to regulate them, wherein a commercial register must be issued for HbBs just as is the case for non-HbBs, without a fee.
• The Ministry of Social Development manages the HbB system, which is based on legal registration for the businesses, and provides them with funding opportunities through the Family Bank in addition to training, marketing, and product development opportunities.
• Likewise, the Kingdom adopted an annual award to encourage productive families/ HbBs under the name “The Her Royal Highness Princess Sabika Bint Ibrahim Al Khalifa Award.”
• HbBs in the Kingdom are characterized by a concentration within vulnerable and low-income segments of society more than they comprise a main economy activity, which is evidenced by the Ministry of Social Development taking over HbBs.
5756 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
The bank offers two basic funding products, the first being the Grameen Program which has been implemented in over forty countries around the world. Through this project the bank offers funding ranging from BHD 500 to BHD 3,000 according to the HbB owner’s expertise and performance on previous funding opportunities. New individuals participating in the program are able to obtain funding worth between BHD 500 to BHD 1500 only. It is worth noting that Grameen program members must open an account worth BHD 10 in the Family Bank added to their savings, and the beneficiary is required to add a minimum of BHD 5 per month to the account with each installment. Business owners must join the Taziz Program before receiving financing. The Taziz Program is a guidance program to strengthen awareness of project management before the business obtains financing. The program targets citizens only (Bahrainis) and the 21-58 age group. An application may be submitted through the Internet (the bank’s website).
The second product is the Small- and Micro-Business Support Program which provides both financial and consultative support to small- and micro-businesses. The financial support is directed toward the bank to cover operational expenses and purchase assets. The term of this financing ranges from 6-36 months and the value of financing ranges from BHD 3000-7000. This program also is for citizens only, targets the 21-58 age group, and requires that the applicant possess a commercial register.
On a related note, the Family Bank offers a number of non-financial services with the goal of strengthening clients’ ability to achieve success in commercial business by providing opportunities to obtain appropriate training and facilitate preparation of a business plan. The Bank also hosts and organizes professional training programs and workshops to strengthen talents and skills. Additionally, the Bank coordinates with the client guidance program through the leadership of professionals and experts to enhance the services provided and strengthen successes via press coverage and marketing techniques.
The bank further provides its clients the ability to participate in local and foreign exhibitions and markets with the goal of benefitting from experiences, building business relationship networks, displaying and selling existing products, or offering and testing new products. These exhibitions are held on a regular basis throughout the year and are considered basic channels for supporting business owners.
7.4 The Productive Family AwardWith a view toward providing moral support to productive families and HbBs, an incentive award is granted to the best productive family business in the Kingdom of Bahrain every two years. The award is called “The Her Royal Highness Princess Sabika Bint Ibrahim Al Khalifa Award.” Eventually the award was developed to include productive families in the Arab countries, and it is granted to the best productive Arab family, the best product, and the best supporter and sponsor of productive families.
This initiative helps incentivize low-income families to create small businesses and encourages and embraces the development of their talents and skills. The initiative also makes opportunities available to research additional sources to improve their economic situation and create self-employment opportunities for them. According to the decision to create the award, the main goals are as follows:
• Providing an introduction to the value of productive families’ businesses and their roles in strengthening social well-being
• Developing productive family businesses and doubling the productivity value of their goods and services
• Encouraging low-income families to become production units and increase their contributions to local economic development
• Unifying visions and exchanging experiences among productive Arab families, and introducing a variety of methods that help enhance the productive capacity of productive families
• Incentivizing financial, economic, and commercial institutions in Arab countries to support productive families’ businesses and helping finance and market their products
• Helping encourage families to develop their products to strengthens their financial yields as well as facilitating marketing efforts
The entities and people targeted by the award are: low-income Arab families, housewives who are capable of producing, governmental and non-governmental private institutions who support productive family businesses, and individuals that provide support and sponsorship to productive family businesses.
The first branch, the Best Productive Family Award, is given to the best family working to increase their income through both producing and relying on their capabilities to develop themselves by researching local development components available near the family and their environment. The family should develop these components and convert them into outstanding products which help them achieve a decent standard of living. The conditions for applying to the award are: That the business be the family’s main source of income, that the family members have a skill which they developed through training programs and practice, and that a significant change has occurred in the family’s standard of living.
The second branch, the Best Product Award, is given to the best product made by a productive family, regardless of whether this product is invented, designed, or developed directly by the family. The conditions for applying to the award are: That the product be designed and produced by a productive family by using raw materials and any equipment available, that the product have the potential to be marketed domestically and abroad, that the product be characterized by innovation, development, quality, and originality, and that there be evidence of product development since the start of the business.
The third branch, the Best Sponsor and Supporter of Productive Families Award, is designated for governmental, civil, and private institutions as well as individuals that contributed to supporting productive family businesses. The conditions for applying to the award are: That the sponsor play a main role in providing material, technical, and moral support to develop and market productive family products, that the sponsor make a clear contribution in previous years, and that the sponsor present a summary to the quality of support granted and the positive impact on beneficiary families that resulted from this support.
Thus the previous discussion shed light on basic issues related to developing HbBs in the Kingdom of Bahrain, the most important dimensions of which can be summarized as follows:
• The Kingdom took on a significant interest in HbBs and issued a Cabinet Decree to regulate them, wherein a commercial register must be issued for HbBs just as is the case for non-HbBs, without a fee.
• The Ministry of Social Development manages the HbB system, which is based on legal registration for the businesses, and provides them with funding opportunities through the Family Bank in addition to training, marketing, and product development opportunities.
• Likewise, the Kingdom adopted an annual award to encourage productive families/ HbBs under the name “The Her Royal Highness Princess Sabika Bint Ibrahim Al Khalifa Award.”
• HbBs in the Kingdom are characterized by a concentration within vulnerable and low-income segments of society more than they comprise a main economy activity, which is evidenced by the Ministry of Social Development taking over HbBs.
5958 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
8. The Sultanate of OmanThe experience of the Sultanate of Oman in developing HbBs is characterized by the adoption of a regulatory framework that allows for legal registration of businesses. The businesses are licensed and sponsored through the General Authority for the Development of SMEs, a subsidiary of the Ministry of Commerce and Industry. The Authority provides support to both HbBs and non-HbBs, and published a Home-based Business Manual which it also made available on the website. The Manual brings information on such businesses together in a database (while making a distinction between HbB licenses and commercial registration) in order to facilitate communication with the businesses. What follows is a description of the framework regulating HBBs and the main services available to them.
8.1 The Framework Regulating HbBsThe Omani experience in the HbB field is characterized by various features, the most important of which is the presence of a legal framework. A Ministerial Decree issued by the Minister of Commerce and Industry No. 4 of 2011 served to regulate the practice of some individual productive work within the home. With regard to the activities authorized for practice from home, the Decree stipulated that citizens may be licensed to practice a number of individual productive work from the home, which are:
• Packaging dates
• Preparing general dishes (for some exceptional cases – low-income individuals – those with special needs), and preparing spices and coffee seeds (general)
• Arranging natural and artificial flowers
• Tailoring and sewing women’s clothing and renting party and wedding dresses
• Preparing perfumes and incense
• Gift-wrapping
• Detailing shawls, abayas, and handmade textiles
• Wedding and event planning
• Printing and photocopying documents and computer services
• Henna, hairdressing, and cosmetology
The Decree stated that the license to practice these works be issued by the General Authority for the Development of SMEs – a subsidiary of the Ministry of Commerce and Industry – in accordance with the following requirements:
• The license applicant must be an Omani national.
• The applicant may be no younger than 18 years old.
• The license must limited to one activity only.
• The license applicant may not have another license issued by a competent authority in the Sultanate, regardless of whether the license be for a commercial, craft, or industrial activity.
5958 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
8. The Sultanate of OmanThe experience of the Sultanate of Oman in developing HbBs is characterized by the adoption of a regulatory framework that allows for legal registration of businesses. The businesses are licensed and sponsored through the General Authority for the Development of SMEs, a subsidiary of the Ministry of Commerce and Industry. The Authority provides support to both HbBs and non-HbBs, and published a Home-based Business Manual which it also made available on the website. The Manual brings information on such businesses together in a database (while making a distinction between HbB licenses and commercial registration) in order to facilitate communication with the businesses. What follows is a description of the framework regulating HBBs and the main services available to them.
8.1 The Framework Regulating HbBsThe Omani experience in the HbB field is characterized by various features, the most important of which is the presence of a legal framework. A Ministerial Decree issued by the Minister of Commerce and Industry No. 4 of 2011 served to regulate the practice of some individual productive work within the home. With regard to the activities authorized for practice from home, the Decree stipulated that citizens may be licensed to practice a number of individual productive work from the home, which are:
• Packaging dates
• Preparing general dishes (for some exceptional cases – low-income individuals – those with special needs), and preparing spices and coffee seeds (general)
• Arranging natural and artificial flowers
• Tailoring and sewing women’s clothing and renting party and wedding dresses
• Preparing perfumes and incense
• Gift-wrapping
• Detailing shawls, abayas, and handmade textiles
• Wedding and event planning
• Printing and photocopying documents and computer services
• Henna, hairdressing, and cosmetology
The Decree stated that the license to practice these works be issued by the General Authority for the Development of SMEs – a subsidiary of the Ministry of Commerce and Industry – in accordance with the following requirements:
• The license applicant must be an Omani national.
• The applicant may be no younger than 18 years old.
• The license must limited to one activity only.
• The license applicant may not have another license issued by a competent authority in the Sultanate, regardless of whether the license be for a commercial, craft, or industrial activity.
6160 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
The Decree also compels the licensee to the following rules:
• The licensee may not recruit any third party who is not an Omani citizen to play a direct role in the business of the license, with the exception of those already recruited among members of the household.
• The license may not be rented or waived to a third party.
• Practicing the licensed activity may not result in the emission of heat, a glare, sounds that bother others, a smell, a strong light, dust, vibrations, flames, or fumes, nor may it interfere with radio, television, or telephone waves, or cause human gatherings or crowding or anything else that limits another individual’s ability to enjoy their residence in any form.
• Public health, security, tranquility, and the environment must be maintained and the business must not cause an increase in waste in the residential area.
• No advertising or promotional signs may be placed outside of the home or on the external wall, and it is only permitted to place a small sign outside of the entrance to the home revealing the licensee name, activity type, and the phrase “individual productive work.” The sign may not be larger than 60x30 cm and must be flat.
• No goods, equipment, or machines may be stored outside of the home.
• No toxic, hazardous, or flammable materials may be stored, in addition to any materials that may damage to public health.
• The cost of the license is OMR 3 and its term is three years. The license may be renewed again for the same fee.
The documents required in order to obtain a license are: a copy of personal identification, a copy of the home ownership document if the applicant owns the home (if the applicant rents the home they must provide a copy of the lessor and lessee’s personal identification and a Letter of No Objection to practice the activity from the owner as well as a copy of the lease agreement and the ownership deed). The application form to obtain the license also must be filled out, and the document is available on the Authority’s website.
8.2 HbB Support ServicesFor the sake of developing SMEs, which includes HbBs, Royal Decree No. 36 of the year 2013 was issued to create the General Authority for the Development of SMEs. The Decree also issued the statute of the Authority in its capacity as a subsidiary of the Ministry of Commerce and Industry. The Authority has a legal personality and enjoys financial and administrative independence. The services provided by the Authority are as follows:
• Company registration: The Authority aims at developing SMEs by recording these businesses’ information, both for those which have a commercial register or an HbB register, in order to establish a detailed database which contains these businesses as a means to facilitate communication therein and provide technical support services. The Authority provides an opportunity to register directly through its website.
• The SME Conference and Exhibition: This is an annual opportunity to promote these businesses and allow them to meet with supporting entities, educational institutions, NGOs, and experts, bodies, and individuals engaging with this sector. These exhibitions and conferences began to be organized in 2009 and started to include HbBs beginning from the exhibition’s fifth year (2013).
The Authority also offers an Entrepreneurship Award which strives to promote a culture of entrepreneurship in the community and develop the performance and capabilities of micro-businesses and SMEs. These efforts are aimed at encouraging competition, distinction, and the ability to innovate. The award also seeks to appreciate people and institutions which have helped support entrepreneurs and SMEs and create an environment conducive to building networks of knowledge and an exchange of experiences in the field of entrepreneurship and SME development. The award has three main categories, which are as follows:
• The Pioneering Award, which includes the sub-categories of best female pioneer, best male pioneer, best business idea, best HbB, best educational initiative, and best media initiative.
• The Best SMEs Award, which includes the sub-categories of best micro-business, best small business in the service, industry, trade, agriculture, fishery, and tourism sectors, and best medium-sized business in the service, industry, trade, agriculture, fishery, and tourism sectors.
• The Entrepreneurship Supporters Award, which includes the sub-categories of best supporting funding institution, best supporting government agency, and best supporting private company, noting that all branches of the award compete to offer the best services.
The conditions for the best HbB award, which seeks to appreciate and honor productive families working from home who hold a license to practice individual productive work from the home, the HbB owner must be an Omani national and hold a license from the General Authority for the Development of SMEs. The business must be current and registered with the Authority on its website, and its operational life must extend 12 months or more. The business is also required to have achieved income. It is worth noting that the Ministry of Commerce and Industry, in cooperation with the Authority, conducted a study in 2012 to ascertain the results of the Decree on licensing productive individual work from within the home as a means to analyze the current reality of these businesses and understand their successes, the challenges they face, and their suggestions on how to develop their situation. Another study and opinion poll was conducted for entities supporting productive HbBs. The most important results of the HbB opinion poll are as follows:
• Licenses are concentrated in certain provinces, wherein three provinces (Muscat – Al-Dakhiliyah—Dhofar) acquired 80% of the number of licenses issued by the Ministry of Commerce and Industry.
• 83.5% of licenses issued were for HbBs run by women.
• 86.7% of homes for which a license has been issued are completely owned by the license holders.
• 92% of licensed HbB owners relied on personal or family funding.
• 29% of licensed businesses engage in detailing and sewing work for women’s clothing or renting party and wedding dresses, which topped the list of licensed activities.
• 85% of HbBs fall within the category of micro-businesses, as the number of employees does not exceed two.
• 86.7% of HbB owners are satisfied with the procedures and requirements for obtaining a license and the ease of conducting business after obtaining a license.
• 49% of licensed projects have capital less than 500 OMR.
• The most important challenges faced by licensed HbBs are: obtaining funding, competing in the market and marketing difficulties, the small size of the license panel, low customer confidence in their businesses, and the inability to recruit a labor force.
6160 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
The Decree also compels the licensee to the following rules:
• The licensee may not recruit any third party who is not an Omani citizen to play a direct role in the business of the license, with the exception of those already recruited among members of the household.
• The license may not be rented or waived to a third party.
• Practicing the licensed activity may not result in the emission of heat, a glare, sounds that bother others, a smell, a strong light, dust, vibrations, flames, or fumes, nor may it interfere with radio, television, or telephone waves, or cause human gatherings or crowding or anything else that limits another individual’s ability to enjoy their residence in any form.
• Public health, security, tranquility, and the environment must be maintained and the business must not cause an increase in waste in the residential area.
• No advertising or promotional signs may be placed outside of the home or on the external wall, and it is only permitted to place a small sign outside of the entrance to the home revealing the licensee name, activity type, and the phrase “individual productive work.” The sign may not be larger than 60x30 cm and must be flat.
• No goods, equipment, or machines may be stored outside of the home.
• No toxic, hazardous, or flammable materials may be stored, in addition to any materials that may damage to public health.
• The cost of the license is OMR 3 and its term is three years. The license may be renewed again for the same fee.
The documents required in order to obtain a license are: a copy of personal identification, a copy of the home ownership document if the applicant owns the home (if the applicant rents the home they must provide a copy of the lessor and lessee’s personal identification and a Letter of No Objection to practice the activity from the owner as well as a copy of the lease agreement and the ownership deed). The application form to obtain the license also must be filled out, and the document is available on the Authority’s website.
8.2 HbB Support ServicesFor the sake of developing SMEs, which includes HbBs, Royal Decree No. 36 of the year 2013 was issued to create the General Authority for the Development of SMEs. The Decree also issued the statute of the Authority in its capacity as a subsidiary of the Ministry of Commerce and Industry. The Authority has a legal personality and enjoys financial and administrative independence. The services provided by the Authority are as follows:
• Company registration: The Authority aims at developing SMEs by recording these businesses’ information, both for those which have a commercial register or an HbB register, in order to establish a detailed database which contains these businesses as a means to facilitate communication therein and provide technical support services. The Authority provides an opportunity to register directly through its website.
• The SME Conference and Exhibition: This is an annual opportunity to promote these businesses and allow them to meet with supporting entities, educational institutions, NGOs, and experts, bodies, and individuals engaging with this sector. These exhibitions and conferences began to be organized in 2009 and started to include HbBs beginning from the exhibition’s fifth year (2013).
The Authority also offers an Entrepreneurship Award which strives to promote a culture of entrepreneurship in the community and develop the performance and capabilities of micro-businesses and SMEs. These efforts are aimed at encouraging competition, distinction, and the ability to innovate. The award also seeks to appreciate people and institutions which have helped support entrepreneurs and SMEs and create an environment conducive to building networks of knowledge and an exchange of experiences in the field of entrepreneurship and SME development. The award has three main categories, which are as follows:
• The Pioneering Award, which includes the sub-categories of best female pioneer, best male pioneer, best business idea, best HbB, best educational initiative, and best media initiative.
• The Best SMEs Award, which includes the sub-categories of best micro-business, best small business in the service, industry, trade, agriculture, fishery, and tourism sectors, and best medium-sized business in the service, industry, trade, agriculture, fishery, and tourism sectors.
• The Entrepreneurship Supporters Award, which includes the sub-categories of best supporting funding institution, best supporting government agency, and best supporting private company, noting that all branches of the award compete to offer the best services.
The conditions for the best HbB award, which seeks to appreciate and honor productive families working from home who hold a license to practice individual productive work from the home, the HbB owner must be an Omani national and hold a license from the General Authority for the Development of SMEs. The business must be current and registered with the Authority on its website, and its operational life must extend 12 months or more. The business is also required to have achieved income. It is worth noting that the Ministry of Commerce and Industry, in cooperation with the Authority, conducted a study in 2012 to ascertain the results of the Decree on licensing productive individual work from within the home as a means to analyze the current reality of these businesses and understand their successes, the challenges they face, and their suggestions on how to develop their situation. Another study and opinion poll was conducted for entities supporting productive HbBs. The most important results of the HbB opinion poll are as follows:
• Licenses are concentrated in certain provinces, wherein three provinces (Muscat – Al-Dakhiliyah—Dhofar) acquired 80% of the number of licenses issued by the Ministry of Commerce and Industry.
• 83.5% of licenses issued were for HbBs run by women.
• 86.7% of homes for which a license has been issued are completely owned by the license holders.
• 92% of licensed HbB owners relied on personal or family funding.
• 29% of licensed businesses engage in detailing and sewing work for women’s clothing or renting party and wedding dresses, which topped the list of licensed activities.
• 85% of HbBs fall within the category of micro-businesses, as the number of employees does not exceed two.
• 86.7% of HbB owners are satisfied with the procedures and requirements for obtaining a license and the ease of conducting business after obtaining a license.
• 49% of licensed projects have capital less than 500 OMR.
• The most important challenges faced by licensed HbBs are: obtaining funding, competing in the market and marketing difficulties, the small size of the license panel, low customer confidence in their businesses, and the inability to recruit a labor force.
6362 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
8.3 Small Investor LoansOman Development Bank plays an effective role in supporting fruitful development projects by funding SMEs that fall within the fields of industry, agriculture, animal husbandry, fishery, tourism, education, health, information technology, professional offices, and traditional handicrafts. While the scope of the Bank’s financing does not cover commercial, contracting, and real estate development businesses, according to the bank’s policy, owners of traditional handicraft and industry HbBs which are registered with the HbB registers issued by the Ministry of Commerce and Industry form one category of those eligible to receive these loans (Oman Development Bank, 2015).
The effective role of the bank is represented in providing loans with a maximum ceiling of OMR 1,000,000 and interest rates no greater than 3% for SMEs. There are also loans for small investors with no interest if the businesses have less than OMR 20,000 in capital. In this manner, the bank funds the equivalent of 90% of the total cost under the condition that the value of the loan not exceed OMR 5,000.
Individuals applying to obtain a loan pay OMR 10 against application consideration fees. The applicable procedures include four stages, which are as follows:
• Application Receipt: The applicant must complete the loan application form, which will be studied, and then an interview will be conducted with the Bank working group with you in order to discuss the application. Depending on the results of the interview, the initial recommendation to accept or reject the request will be made.
• Evaluation: This phase involves evaluating the request and the risks, followed by a final recommendation and the Bank management’s approval offer.
• Authentication and Disbursement: The guarantees, agreement, and contracts are authenticated and the loan amount is disbursed.
• Follow-up and Repayment: This takes place throughout the term of the loan.
The loan term may be extended to seven years including a maximum one-year grace period. It is worth noting that the guarantees that must be provided are represented in mortgaging business assets (mortgaging the commercial register), providing a personal guarantee from a sponsor with a stable income, and providing checks for repayment.
The applicant must hold Omani nationality and be no younger than 19 years old. The forms and documents required to fill out an application to obtain a loan are as follows:
• Initial loan application form,
• Photocopy of the license, registration, or approval issued by the competent authority, regardless of whether this be for a new or existing project,
• Official documents that specify the legal form of the project,
• Documents with three quotations from supply companies or entities specialized in supplying the assets that must be funded, explaining each price offer for the assets and their technical specifications,
8.4 The Sanad ProgrammeThe Sanad Programme supports HbBs and is sponsored by the Ministry of Manpower to provide a source of income for a large segment of citizens looking for work. This can be achieved by encouraging and supporting self-employment businesses as well as developing small businesses. The program targets Omanis searching for work and provides them with loans for individuals worth OMR 5000; four individuals may apply for one loan as a joint venture. The financial guarantees required for the loan include the commercial register certificate/an HbB license in addition to undated bank checks to cover the amount of the loan and mortgage the business’ assets. At least two offers must be submitted to quote prices for equipment upon purchasing in order to operate the business (capital expenditures are included under the process of purchasing equipment).
The application to receive a loan may be submitted for free (no charge) and involves the following steps (The Omani Sanad Programme, 2015):
• The application form for the Sanad Programme must be submitted along with the required attachments,
• The application form for the candidate must be submitted along with any attachments to the nearest Sanad Programme Office (there are eight offices available).
• After obtaining approval for the application and loan, the applicant is called to complete other procedures and submit the documents required for the transaction.
• The applicant shall appear at the Sanad Office and sign a document acknowledging application receipt and approval.
• The amounts will be collected by the Oman Development Bank.
The documents required to complete procedures to obtain the loan are as follows:
• A letter addressed to the Executive Director of the Sanad Programme stating a desire to begin the business,
• A photocopy of personal identification as well as a recent color photocopy (on a blue background) size 4x6 (formal attire for males),
• A photocopy of identification for those looking for work (from the Ministry of Manpower),
• A letter from the tribe Sheikh approved by the Wali supporting the authenticity of the permanent address,
• Certificate of No Conviction (from the Royal Oman Police),
The previous discussion shed light on basic issues related to developing HBBs in the Sultanate of Oman, the most important dimensions of which may be summarized as follows:
• The Sultanate has taken a growing interest in HbBs and considers them to fall within the category of SMEs. The Public Authority for Development of SMEs is responsible for sponsoring and developing HbBs.
• The Sultanate issued a legal framework regulating HbBs, represented in the Minister of Commerce and Industry’s Decree regarding registration of these businesses within the commercial register, which distinguishes between commercial licenses and HbB licenses.
6362 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
8.3 Small Investor LoansOman Development Bank plays an effective role in supporting fruitful development projects by funding SMEs that fall within the fields of industry, agriculture, animal husbandry, fishery, tourism, education, health, information technology, professional offices, and traditional handicrafts. While the scope of the Bank’s financing does not cover commercial, contracting, and real estate development businesses, according to the bank’s policy, owners of traditional handicraft and industry HbBs which are registered with the HbB registers issued by the Ministry of Commerce and Industry form one category of those eligible to receive these loans (Oman Development Bank, 2015).
The effective role of the bank is represented in providing loans with a maximum ceiling of OMR 1,000,000 and interest rates no greater than 3% for SMEs. There are also loans for small investors with no interest if the businesses have less than OMR 20,000 in capital. In this manner, the bank funds the equivalent of 90% of the total cost under the condition that the value of the loan not exceed OMR 5,000.
Individuals applying to obtain a loan pay OMR 10 against application consideration fees. The applicable procedures include four stages, which are as follows:
• Application Receipt: The applicant must complete the loan application form, which will be studied, and then an interview will be conducted with the Bank working group with you in order to discuss the application. Depending on the results of the interview, the initial recommendation to accept or reject the request will be made.
• Evaluation: This phase involves evaluating the request and the risks, followed by a final recommendation and the Bank management’s approval offer.
• Authentication and Disbursement: The guarantees, agreement, and contracts are authenticated and the loan amount is disbursed.
• Follow-up and Repayment: This takes place throughout the term of the loan.
The loan term may be extended to seven years including a maximum one-year grace period. It is worth noting that the guarantees that must be provided are represented in mortgaging business assets (mortgaging the commercial register), providing a personal guarantee from a sponsor with a stable income, and providing checks for repayment.
The applicant must hold Omani nationality and be no younger than 19 years old. The forms and documents required to fill out an application to obtain a loan are as follows:
• Initial loan application form,
• Photocopy of the license, registration, or approval issued by the competent authority, regardless of whether this be for a new or existing project,
• Official documents that specify the legal form of the project,
• Documents with three quotations from supply companies or entities specialized in supplying the assets that must be funded, explaining each price offer for the assets and their technical specifications,
8.4 The Sanad ProgrammeThe Sanad Programme supports HbBs and is sponsored by the Ministry of Manpower to provide a source of income for a large segment of citizens looking for work. This can be achieved by encouraging and supporting self-employment businesses as well as developing small businesses. The program targets Omanis searching for work and provides them with loans for individuals worth OMR 5000; four individuals may apply for one loan as a joint venture. The financial guarantees required for the loan include the commercial register certificate/an HbB license in addition to undated bank checks to cover the amount of the loan and mortgage the business’ assets. At least two offers must be submitted to quote prices for equipment upon purchasing in order to operate the business (capital expenditures are included under the process of purchasing equipment).
The application to receive a loan may be submitted for free (no charge) and involves the following steps (The Omani Sanad Programme, 2015):
• The application form for the Sanad Programme must be submitted along with the required attachments,
• The application form for the candidate must be submitted along with any attachments to the nearest Sanad Programme Office (there are eight offices available).
• After obtaining approval for the application and loan, the applicant is called to complete other procedures and submit the documents required for the transaction.
• The applicant shall appear at the Sanad Office and sign a document acknowledging application receipt and approval.
• The amounts will be collected by the Oman Development Bank.
The documents required to complete procedures to obtain the loan are as follows:
• A letter addressed to the Executive Director of the Sanad Programme stating a desire to begin the business,
• A photocopy of personal identification as well as a recent color photocopy (on a blue background) size 4x6 (formal attire for males),
• A photocopy of identification for those looking for work (from the Ministry of Manpower),
• A letter from the tribe Sheikh approved by the Wali supporting the authenticity of the permanent address,
• Certificate of No Conviction (from the Royal Oman Police),
The previous discussion shed light on basic issues related to developing HBBs in the Sultanate of Oman, the most important dimensions of which may be summarized as follows:
• The Sultanate has taken a growing interest in HbBs and considers them to fall within the category of SMEs. The Public Authority for Development of SMEs is responsible for sponsoring and developing HbBs.
• The Sultanate issued a legal framework regulating HbBs, represented in the Minister of Commerce and Industry’s Decree regarding registration of these businesses within the commercial register, which distinguishes between commercial licenses and HbB licenses.
6564 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• A number of government agencies – an example of which includes the Oman Development Bank and the Sanad Programme of the Ministry of Manpower – support HbBs and provide them with financing services as long as the businesses are licensed.
• The regulatory framework for HbBs provides a wide range of activities that may be conducted from the home, and women’s clothing continues to occupy first place according to the distribution of HbB license activities.
• The Omani experience is distinctive in that the state followed up on the results of issuing the Decree to regulate HbBs through the Public Authority and Ministry of Commerce and Trade sponsoring a research study to ascertain licensed HbB and owners’ and existing service providers’ opinions.
9. Other ExperiencesThe previous discussion presented a review of a number of key experiences in the field of developing HbBs with a focus on regulatory frameworks which govern the businesses, supporting services, and incentivizing initiatives offered to HbBs. The experiences of the United States of America, Canada, and Singapore were reviewed in addition to experiences from the Gulf (the United Arab Emirates, Saudi Arabia, Bahrain, and Oman). In order to further benefit from regional and international experiences, the following discussion seeks to shed light on some efforts adopted by other countries, including Kuwait, the United Kingdom, and Australia.
9.1 KuwaitOn 15 January 2015, Kuwait witnessed the launch of the “Mosharka” Initiative to rehabilitate and operate small businesses which work from home, under the auspices of the Minister of State for Cabinet Affairs. The idea for the initiative came from a group of youth volunteers, and they began preparing the program in January 2012 in order to participate in the process of advancing the national youth small business and industry sector within the framework of social responsibility. On the other hand, “the National Mosharka Company for Organizing Exhibitions and Conferences” organizes the transactions of the work team as well as the legal initiative (Mosharka, 2015).
Strategic partners for the initiative are: The Ministry of State for Youth Affairs, the Ministry of Awqaf and Islamic Affairs, the Amiri Diwan’s Higher Advisory Committee on Completion of the Application of Islamic Sharia Provisions. The Ali Al-Ghanim & Sons Automotive Company is the Platinum Sponsor for the Initiative, while HumanFocus is the Gold Sponsor, and Inspiring Minds Middle East Group is the Silver Sponsor. Al-Anba is the initiative’s Media Sponsor.
The idea of the initiative is to establish an integrated, rehabilitative incubator for small HbBs to develop the businesses by providing all aspects of technical and material support required to turn the HbB into a company capable of competing in the local market. The initiative also seeks to activate a role for Islamic economic institutions and entities in supporting small businesses both to ensure that they spread widely and to entrench the concept of conducting transactions in accordance with Islamic Sharia.
The vision behind the initiative is to create an incubator approved by the Small Enterprise Fund to become a link between the Fund and HbBs that are not capable of meeting the Fund’s requirements. The incubator targets a group of small, national, youth businesses and industries that work within the framework of the home and whose owners fall within the 18-34 age group. The total is an estimated
2000 businesses and industries. The objectives of the initiative are as follows:
• Helping eliminate the problems and obstacles faced by national youth businesses and industries,
• Creating a group of companies managed by youth that work according to Islamic practice,
• Organizing youth commercial activities which are not organized and transforming them into competitive youth businesses and industries,
• Establishing a new pillar to enhance the value and weight of the Kuwaiti national economy,
• Employing youth energies to serve the national economy, and
• Publishing and marketing a business culture in accordance with Islamic economic practice.
The initiative selects 55 businesses among those that apply via the initiative website. The businesses are classified within the following two categories:
• The Grameen Program: This includes 40 businesses that compete in a final exhibition for the title of Best Business. The top five enrolled projects win a price of KWD 500.
• The Rehabilitative Training Program SE15: Alongside 10-12 existing HbBs, 3-5 new projects enroll in this program and are granted KWD 500 as a gift to fund capital. The HbB owner must hold Kuwaiti nationality and be between 21-34 years of age.
9.2 The United KingdomHbBs are considered a main business model in the UK in light of the fact that more than 60% of business institution owners utilize the home as the main headquarters for their activities, as is the case in the United States and Canada. This led the British government to take an interest in this type of business and develop a regulatory and legislative framework for them. These businesses are incorporated within the business sector, and a government guide for HbBs has been developed by the Department for Business Innovation and Skills (BIS), which strives to offer guidance on starting and expanding an HbB.
With regard to the regulatory framework for these businesses, at the start, an HbB must obtain approval from Planning & Building Control if the home will not be used as a private residence or if the HbB will result in traffic or extra movement of employees or clients, if the HbB will involve any activities that are not usually carried out in a residential area, or if the project will cause an inconvenience to neighbors or any other source of nuisance, from noise to odors and otherwise. In order to the extent to which this type of permit is required, the entrepreneur shall visit the local council in the residential area in which he/she lives in order to obtain advice.
If the home is rented, the business owner must inform the homeowner. It is worth noting that the British government announced on 1 November 2010 that any rent contracts which prohibit a tenant from conducting commercial activities from the home must be reviewed in order to encourage citizens to begin their own HbBs. If the HbB owner has a mortgage, the HbB owner must also inform the mortgaging entity, as starting the HbB must not alter mortgage payments or conditions.
To begin an HbB, the owner must obtain a license to register the business—as is the case for non-HbBs—in addition to obtaining approval from the Planning and Building Control if amendments must be made to the interior design of the home. The owner must also register with HM Revenue & Customs and publicly announce all profits.
6564 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• A number of government agencies – an example of which includes the Oman Development Bank and the Sanad Programme of the Ministry of Manpower – support HbBs and provide them with financing services as long as the businesses are licensed.
• The regulatory framework for HbBs provides a wide range of activities that may be conducted from the home, and women’s clothing continues to occupy first place according to the distribution of HbB license activities.
• The Omani experience is distinctive in that the state followed up on the results of issuing the Decree to regulate HbBs through the Public Authority and Ministry of Commerce and Trade sponsoring a research study to ascertain licensed HbB and owners’ and existing service providers’ opinions.
9. Other ExperiencesThe previous discussion presented a review of a number of key experiences in the field of developing HbBs with a focus on regulatory frameworks which govern the businesses, supporting services, and incentivizing initiatives offered to HbBs. The experiences of the United States of America, Canada, and Singapore were reviewed in addition to experiences from the Gulf (the United Arab Emirates, Saudi Arabia, Bahrain, and Oman). In order to further benefit from regional and international experiences, the following discussion seeks to shed light on some efforts adopted by other countries, including Kuwait, the United Kingdom, and Australia.
9.1 KuwaitOn 15 January 2015, Kuwait witnessed the launch of the “Mosharka” Initiative to rehabilitate and operate small businesses which work from home, under the auspices of the Minister of State for Cabinet Affairs. The idea for the initiative came from a group of youth volunteers, and they began preparing the program in January 2012 in order to participate in the process of advancing the national youth small business and industry sector within the framework of social responsibility. On the other hand, “the National Mosharka Company for Organizing Exhibitions and Conferences” organizes the transactions of the work team as well as the legal initiative (Mosharka, 2015).
Strategic partners for the initiative are: The Ministry of State for Youth Affairs, the Ministry of Awqaf and Islamic Affairs, the Amiri Diwan’s Higher Advisory Committee on Completion of the Application of Islamic Sharia Provisions. The Ali Al-Ghanim & Sons Automotive Company is the Platinum Sponsor for the Initiative, while HumanFocus is the Gold Sponsor, and Inspiring Minds Middle East Group is the Silver Sponsor. Al-Anba is the initiative’s Media Sponsor.
The idea of the initiative is to establish an integrated, rehabilitative incubator for small HbBs to develop the businesses by providing all aspects of technical and material support required to turn the HbB into a company capable of competing in the local market. The initiative also seeks to activate a role for Islamic economic institutions and entities in supporting small businesses both to ensure that they spread widely and to entrench the concept of conducting transactions in accordance with Islamic Sharia.
The vision behind the initiative is to create an incubator approved by the Small Enterprise Fund to become a link between the Fund and HbBs that are not capable of meeting the Fund’s requirements. The incubator targets a group of small, national, youth businesses and industries that work within the framework of the home and whose owners fall within the 18-34 age group. The total is an estimated
2000 businesses and industries. The objectives of the initiative are as follows:
• Helping eliminate the problems and obstacles faced by national youth businesses and industries,
• Creating a group of companies managed by youth that work according to Islamic practice,
• Organizing youth commercial activities which are not organized and transforming them into competitive youth businesses and industries,
• Establishing a new pillar to enhance the value and weight of the Kuwaiti national economy,
• Employing youth energies to serve the national economy, and
• Publishing and marketing a business culture in accordance with Islamic economic practice.
The initiative selects 55 businesses among those that apply via the initiative website. The businesses are classified within the following two categories:
• The Grameen Program: This includes 40 businesses that compete in a final exhibition for the title of Best Business. The top five enrolled projects win a price of KWD 500.
• The Rehabilitative Training Program SE15: Alongside 10-12 existing HbBs, 3-5 new projects enroll in this program and are granted KWD 500 as a gift to fund capital. The HbB owner must hold Kuwaiti nationality and be between 21-34 years of age.
9.2 The United KingdomHbBs are considered a main business model in the UK in light of the fact that more than 60% of business institution owners utilize the home as the main headquarters for their activities, as is the case in the United States and Canada. This led the British government to take an interest in this type of business and develop a regulatory and legislative framework for them. These businesses are incorporated within the business sector, and a government guide for HbBs has been developed by the Department for Business Innovation and Skills (BIS), which strives to offer guidance on starting and expanding an HbB.
With regard to the regulatory framework for these businesses, at the start, an HbB must obtain approval from Planning & Building Control if the home will not be used as a private residence or if the HbB will result in traffic or extra movement of employees or clients, if the HbB will involve any activities that are not usually carried out in a residential area, or if the project will cause an inconvenience to neighbors or any other source of nuisance, from noise to odors and otherwise. In order to the extent to which this type of permit is required, the entrepreneur shall visit the local council in the residential area in which he/she lives in order to obtain advice.
If the home is rented, the business owner must inform the homeowner. It is worth noting that the British government announced on 1 November 2010 that any rent contracts which prohibit a tenant from conducting commercial activities from the home must be reviewed in order to encourage citizens to begin their own HbBs. If the HbB owner has a mortgage, the HbB owner must also inform the mortgaging entity, as starting the HbB must not alter mortgage payments or conditions.
To begin an HbB, the owner must obtain a license to register the business—as is the case for non-HbBs—in addition to obtaining approval from the Planning and Building Control if amendments must be made to the interior design of the home. The owner must also register with HM Revenue & Customs and publicly announce all profits.
6766 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
On a related note, insuring HbBs is considered one of the hallmarks of the British experience. There are various categories of coverage which HbBs are subject to, as follows:
• Professional Indemnity: This relates to businesses based on providing services and knowledge, and the businesses are protected in the event of alleged negligence or errors associated with the professional activities of the business.
• Public Liability: This type of insurance coverage is preferable if the HbB receives clients at its headquarters and insurance protection is provided to them in case of potential injury.
• Business Interruption: This covers potential revenue losses if the business incurs material losses and damages that negatively affect its activities.
• Employer’s Liability: This is applied in the event that employees are working for the business, so that it is on the owner to protect them from the risk of injury during work and in case of death.
• Motor Insurance: This field is different from conventional car insurance, which does not include use of the vehicle for economic purposes or activities. If the vehicle is designated for business work and used to transport production inputs, products, and inventory, it must be insured. If a personal vehicle is used for the purpose of economic activity, this purpose must be added to the car insurance policy.
• Home Insurance: If an insurance policy for residential purposes exists, this does not mean that the insurance covers economic activities run within the home. For this reason the HbB owner must contact the insurance company which issued the policy and discuss the possibility of adding economic activities within the insurance coverage.
With regard to recruitment of employees, HbB legislation allows for employees to be hired, and the same employment rules applied to employees within non-HbBs are applied to employees within HbBs. These businesses are also permitted to conduct outsourcing and sub-contracting operations. If employees are hired for the HbB, the HbB owner must conduct a health and safety risk assessment and be familiar with the Employment Law as the law governing relations between the HbB owner and employees (The Start Up Donut, 2014).
HbBs which prepare food must be verified by the Local Trading Standards Agency and they are obliged to comply with the Agency. If the HbB fails to comply, the HbB owner will be forced to stop their activities. It is worth noting that in order for the HbB to begin selling food products prepared in the home, several measures shall be taken, including obtaining counsel from the Environmental Health Department as well as the necessary food health certificates.
For more information, the Food Standards Agency has a Distance Selling Guide for Food on its website which covers several important issues, including the following:
• When beginning to sell some products over the Internet, the HbB owner shall register the product with the Environmental Health Department and seek advice on any legal requirements by reviewing Trading Standards.
• The main law for online trading is the Protection, Distance Selling, Consumer Regulations Law of the year 2000 which applies to all goods sold online, including food.
9.3 New ZealandGrowing numbers of people in New Zealand are gravitating toward work from home by beginning their own HbBs. Among the activities authorized to be conducted from the home are (ANA Bank New Zealand, 2015):
• Service and consulting businesses, examples of which include marketing and financial consulting, cosmetology consulting, home-cleaning services, and horticultural services,
• Technology projects, examples of which includes creating websites on the Internet, consultations in the field of information technology, and software development,
• Businesses pertaining to online work, examples of which include online marketing and promotional and online campaigns, and
• Businesses that rely on the owner’s hobby, examples of which include preparing food, knitting, and making toys.
At the same time, some activities are not appropriate for HbBs and are not authorized by the Local Council or Regional Authority. Examples include the following:
• Activities which require labor, wherein many local councils restrict the number of employees working on an HbB, with some stipulating that only family members and people living in the home may be utilized. This is linked to guaranteeing that the area remains a residential one and that the business not become detrimental to residents.
• Activities which result in noise inappropriate with the nature of the residential area, which led many local councils to ban work in light industrial activities so as not to cause a reduction in the value of existing real estate in the area and harm real estate owners’ interests.
• Retail sale companies and other activities which require many clients’ presence in the HbB headquarters. This is linked to increasing vehicular traffic and congestion in the area in addition to a need to provide parking spaces for cars.
• Activities which require storage of hazardous goods or chemicals.
As for an example of this, the city of Tauranga in New Zealand established a number of rules which regulate HbB activities and defined HbBs as “a job, craft, business, or activity which utilizes a residential location in order to conduct repeated activities to generate commercial revenue (including headquarters used to host children at home).
It is worth noting that within each area of the city, a set of criteria must be followed in order to receive approval to operate an HbB. There are different criteria for the outskirts of the city and others for residential units in rural areas, and so on. The conditions are as follows:
• No more than two individuals may be employed with the business full time, except for family members who permanently live in the home and own and manage this business from home.
• The HbB activity may be conducted inside the home or on an outside patio (the open area) of the home designed to suit that activity.
• The maximum area that may be utilized for the HbB is only 50 square meters.
• With regard to use of the outside patio of the home, the HbB owner may not negatively impact the area of the street.
6766 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
On a related note, insuring HbBs is considered one of the hallmarks of the British experience. There are various categories of coverage which HbBs are subject to, as follows:
• Professional Indemnity: This relates to businesses based on providing services and knowledge, and the businesses are protected in the event of alleged negligence or errors associated with the professional activities of the business.
• Public Liability: This type of insurance coverage is preferable if the HbB receives clients at its headquarters and insurance protection is provided to them in case of potential injury.
• Business Interruption: This covers potential revenue losses if the business incurs material losses and damages that negatively affect its activities.
• Employer’s Liability: This is applied in the event that employees are working for the business, so that it is on the owner to protect them from the risk of injury during work and in case of death.
• Motor Insurance: This field is different from conventional car insurance, which does not include use of the vehicle for economic purposes or activities. If the vehicle is designated for business work and used to transport production inputs, products, and inventory, it must be insured. If a personal vehicle is used for the purpose of economic activity, this purpose must be added to the car insurance policy.
• Home Insurance: If an insurance policy for residential purposes exists, this does not mean that the insurance covers economic activities run within the home. For this reason the HbB owner must contact the insurance company which issued the policy and discuss the possibility of adding economic activities within the insurance coverage.
With regard to recruitment of employees, HbB legislation allows for employees to be hired, and the same employment rules applied to employees within non-HbBs are applied to employees within HbBs. These businesses are also permitted to conduct outsourcing and sub-contracting operations. If employees are hired for the HbB, the HbB owner must conduct a health and safety risk assessment and be familiar with the Employment Law as the law governing relations between the HbB owner and employees (The Start Up Donut, 2014).
HbBs which prepare food must be verified by the Local Trading Standards Agency and they are obliged to comply with the Agency. If the HbB fails to comply, the HbB owner will be forced to stop their activities. It is worth noting that in order for the HbB to begin selling food products prepared in the home, several measures shall be taken, including obtaining counsel from the Environmental Health Department as well as the necessary food health certificates.
For more information, the Food Standards Agency has a Distance Selling Guide for Food on its website which covers several important issues, including the following:
• When beginning to sell some products over the Internet, the HbB owner shall register the product with the Environmental Health Department and seek advice on any legal requirements by reviewing Trading Standards.
• The main law for online trading is the Protection, Distance Selling, Consumer Regulations Law of the year 2000 which applies to all goods sold online, including food.
9.3 New ZealandGrowing numbers of people in New Zealand are gravitating toward work from home by beginning their own HbBs. Among the activities authorized to be conducted from the home are (ANA Bank New Zealand, 2015):
• Service and consulting businesses, examples of which include marketing and financial consulting, cosmetology consulting, home-cleaning services, and horticultural services,
• Technology projects, examples of which includes creating websites on the Internet, consultations in the field of information technology, and software development,
• Businesses pertaining to online work, examples of which include online marketing and promotional and online campaigns, and
• Businesses that rely on the owner’s hobby, examples of which include preparing food, knitting, and making toys.
At the same time, some activities are not appropriate for HbBs and are not authorized by the Local Council or Regional Authority. Examples include the following:
• Activities which require labor, wherein many local councils restrict the number of employees working on an HbB, with some stipulating that only family members and people living in the home may be utilized. This is linked to guaranteeing that the area remains a residential one and that the business not become detrimental to residents.
• Activities which result in noise inappropriate with the nature of the residential area, which led many local councils to ban work in light industrial activities so as not to cause a reduction in the value of existing real estate in the area and harm real estate owners’ interests.
• Retail sale companies and other activities which require many clients’ presence in the HbB headquarters. This is linked to increasing vehicular traffic and congestion in the area in addition to a need to provide parking spaces for cars.
• Activities which require storage of hazardous goods or chemicals.
As for an example of this, the city of Tauranga in New Zealand established a number of rules which regulate HbB activities and defined HbBs as “a job, craft, business, or activity which utilizes a residential location in order to conduct repeated activities to generate commercial revenue (including headquarters used to host children at home).
It is worth noting that within each area of the city, a set of criteria must be followed in order to receive approval to operate an HbB. There are different criteria for the outskirts of the city and others for residential units in rural areas, and so on. The conditions are as follows:
• No more than two individuals may be employed with the business full time, except for family members who permanently live in the home and own and manage this business from home.
• The HbB activity may be conducted inside the home or on an outside patio (the open area) of the home designed to suit that activity.
• The maximum area that may be utilized for the HbB is only 50 square meters.
• With regard to use of the outside patio of the home, the HbB owner may not negatively impact the area of the street.
6968 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• With regard to retail sales, only products made within the HbB or as a result of the businesses may be sold, and an area for sales must be allocated within the total area specified for the HbB (a maximum of 50 square meters as previously specified).
• The rules governing HbB activities address a number of other matters, including:
o Advertising signs for the business, both in terms of dimensions and that they be flat and contain no moving parts,
o Parking spaces for the business, allowing for two spaces for residents of the home and only one space for guests,
o Noise: The provisions set the maximum limit for noise intensity emanating from the HbB as follows: 50 dB during the day and 40-70 dB at night.
• The HbB owner must comply with requirements and criteria pertaining to: building height, the character of the street, lighting, and traffic, and the owner must have a contingency plan in the event of natural disasters such as floods.
With regard to the New Zealand experience, it may be observed that legislators paid significant attention to home-based services. In the year 1989, the Education Act defined home-based education and care services as “the provision of education or care, for gain or reward, to fewer than 5 children under the age of 6 (in addition to any child enrolled at school who is the child of the person who provides education or care), in their own home; or the home of the person providing the education or care; or any other home nominated by the parents of the children.”
It is worth noting that home-based child services and childcare businesses differ from early childhood education, as the children are still in a home environment. The home-based teacher provides a day of education or care full- or part-time to children in private homes, is supervised by qualified observers, and is registered with the Ministry of Education.
The legislation governing home-based child education and childcare businesses includes the following:
• Education legislation (early childhood services) issued in the year 2008 which sets out the main responsibilities that must be undertaken by those providing home-based education and childcare services. They are as follows:
o Service Provider: This is an entity, agency, or person that arranges or provides education and childcare services. The service provider shall be the permit holder and shall be an individual qualified to manage the service in accordance with the requirements stipulated in the legislation. They also have a responsibility to comply with rules and regulations for HbBs.
o Coordinator: This is a person who bears the main responsibility for overseeing education and childcare services, and is responsible for the health, safety, and comfort of the children. This person provides professional leadership and support to teachers who provide the service.
o Educator: A person who provides education or childcare services directly to children and who is responsible for their security, safety, and comfort. This person must have a first aid certification.
• Home-based childcare and education licensing standards issued in the year 2008: The Ministry published these standards in a detailed manual which includes all information and guidance pertaining to the home environment and conditions for providing the service (Ministry of Education, 2011).
It is worth noting that such HbBs are eligible to receive funding and government financial support and must comply with the regulations issued by the Ministry of Education. The service providers may use the Ministry of Education’s Licensing Assessment Tool in order to establish an HbB.
With regard to how these businesses are taxed, HbBs enjoy several tax benefits. For instance, if your HbB occupies an area representing 10% of the home, the business may obtain a 10% tax deduction (if the HbB owner owns the home) as this area represents a business expense. With regard to the cost of consuming utilities such as water and electricity, the proportion consumed by the HbB may be estimated and considered a business expenditure (ANA Bank New Zealand Limited, 2015).
Thus the previous discussion shed light on basic aspects of the HbB experience in Kuwait, the United Kingdom, and New Zealand, and the most important dimensions of these experiences may be summarized as follows:
• The social responsibility role that can be played by companies and voluntary initiatives to support HbB development, similar to the Musharka Initiative in Kuwait which seeks to rehabilitate and operate HbBs
• The importance of insuring HbBs just as non-HbBs. This requires that insurance companies create and provide insurance services suited to the nature of these businesses, like in the British experience.
• The British experience also concluded the importance of HbBs that prepare foods for the purpose of sale complying with the same sales standards imposed on non-HbBs. This is organized by both the Trading Standards Institute and Environmental Health and the business must also obtain the required food hygiene certificates. Other conditions must be fulfilled for selling food products via the Internet.
• According to the New Zealand experience, it is possible to define HbBs more widely as “a job, craft, business, or activity which utilizes a residential location in order to conduct repeated activities to generate commercial revenue (including headquarters used to host children at home).” It is also possible to create a sub-definition for HbBs which provide education and childcare services as determined by the law since the year 1989.
• The New Zealand experience has also shown that it is possible to apply different standards which vary according to the region or territory in which an HbB is operated, similar to the American and Canadian experiences. This indicates that this trend is not linked to expanding the geographic area of the state, but instead that the state aims to take the nature of the geographic location into account.
6968 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• With regard to retail sales, only products made within the HbB or as a result of the businesses may be sold, and an area for sales must be allocated within the total area specified for the HbB (a maximum of 50 square meters as previously specified).
• The rules governing HbB activities address a number of other matters, including:
o Advertising signs for the business, both in terms of dimensions and that they be flat and contain no moving parts,
o Parking spaces for the business, allowing for two spaces for residents of the home and only one space for guests,
o Noise: The provisions set the maximum limit for noise intensity emanating from the HbB as follows: 50 dB during the day and 40-70 dB at night.
• The HbB owner must comply with requirements and criteria pertaining to: building height, the character of the street, lighting, and traffic, and the owner must have a contingency plan in the event of natural disasters such as floods.
With regard to the New Zealand experience, it may be observed that legislators paid significant attention to home-based services. In the year 1989, the Education Act defined home-based education and care services as “the provision of education or care, for gain or reward, to fewer than 5 children under the age of 6 (in addition to any child enrolled at school who is the child of the person who provides education or care), in their own home; or the home of the person providing the education or care; or any other home nominated by the parents of the children.”
It is worth noting that home-based child services and childcare businesses differ from early childhood education, as the children are still in a home environment. The home-based teacher provides a day of education or care full- or part-time to children in private homes, is supervised by qualified observers, and is registered with the Ministry of Education.
The legislation governing home-based child education and childcare businesses includes the following:
• Education legislation (early childhood services) issued in the year 2008 which sets out the main responsibilities that must be undertaken by those providing home-based education and childcare services. They are as follows:
o Service Provider: This is an entity, agency, or person that arranges or provides education and childcare services. The service provider shall be the permit holder and shall be an individual qualified to manage the service in accordance with the requirements stipulated in the legislation. They also have a responsibility to comply with rules and regulations for HbBs.
o Coordinator: This is a person who bears the main responsibility for overseeing education and childcare services, and is responsible for the health, safety, and comfort of the children. This person provides professional leadership and support to teachers who provide the service.
o Educator: A person who provides education or childcare services directly to children and who is responsible for their security, safety, and comfort. This person must have a first aid certification.
• Home-based childcare and education licensing standards issued in the year 2008: The Ministry published these standards in a detailed manual which includes all information and guidance pertaining to the home environment and conditions for providing the service (Ministry of Education, 2011).
It is worth noting that such HbBs are eligible to receive funding and government financial support and must comply with the regulations issued by the Ministry of Education. The service providers may use the Ministry of Education’s Licensing Assessment Tool in order to establish an HbB.
With regard to how these businesses are taxed, HbBs enjoy several tax benefits. For instance, if your HbB occupies an area representing 10% of the home, the business may obtain a 10% tax deduction (if the HbB owner owns the home) as this area represents a business expense. With regard to the cost of consuming utilities such as water and electricity, the proportion consumed by the HbB may be estimated and considered a business expenditure (ANA Bank New Zealand Limited, 2015).
Thus the previous discussion shed light on basic aspects of the HbB experience in Kuwait, the United Kingdom, and New Zealand, and the most important dimensions of these experiences may be summarized as follows:
• The social responsibility role that can be played by companies and voluntary initiatives to support HbB development, similar to the Musharka Initiative in Kuwait which seeks to rehabilitate and operate HbBs
• The importance of insuring HbBs just as non-HbBs. This requires that insurance companies create and provide insurance services suited to the nature of these businesses, like in the British experience.
• The British experience also concluded the importance of HbBs that prepare foods for the purpose of sale complying with the same sales standards imposed on non-HbBs. This is organized by both the Trading Standards Institute and Environmental Health and the business must also obtain the required food hygiene certificates. Other conditions must be fulfilled for selling food products via the Internet.
• According to the New Zealand experience, it is possible to define HbBs more widely as “a job, craft, business, or activity which utilizes a residential location in order to conduct repeated activities to generate commercial revenue (including headquarters used to host children at home).” It is also possible to create a sub-definition for HbBs which provide education and childcare services as determined by the law since the year 1989.
• The New Zealand experience has also shown that it is possible to apply different standards which vary according to the region or territory in which an HbB is operated, similar to the American and Canadian experiences. This indicates that this trend is not linked to expanding the geographic area of the state, but instead that the state aims to take the nature of the geographic location into account.
7170 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
10. ConclusionThe number of HbBs across the world grows daily. This phenomenon has been accompanied by growing government attention to providing a legislative and regulatory framework for those projects in order to make them eligible to join formal economic activity on the one hand and maintain the nature of the residential unit and area on the other. HbBs are also considered to fall under the micro-business and SME categories, which allows HbBs to benefit from the advantages and preferential treatment provided by many countries of the world to this important component of the private business sector.
As the State of Qatar aspires to develop the private sector in all its variety in line with national plans and development strategies, an urgent need has emerged to take an interest in HbBs and sponsor efforts to understand their current reality and mechanisms for advancement through lessons learned from a variety of international experiences. In this vein, Qatar Development Bank, in collaboration with the Ministry of Labor and Social Affairs and the Social Development Center, sponsored a research project to demonstrate the reality of these projects at the national level, explore the main features of a number of international and regional experiences that may be drawn from, and finally develop a package of initiatives targeting efforts to develop HbBs in Qatar.
Thus this study came as the second output of the research project, exploring relevant regional and international experiences. The study put a discussion on the table of the main features of experiences in developing and regulating HbBs in ten countries namely: United States of America, Canada, the United Kingdom, Singapore, New Zealand, the United Arab Emirates, Saudi Arabia, Oman, Bahrain, and Kuwait. The study conducted a qualitative analysis of sources available on relevant legislative and regulatory frameworks as well as the main initiatives to support and assist these businesses and encourage excellence.
The study mainly relied on official online content available on the Internet. Here it should be noted that the research team was faced with three main limitations. The first involved limited or obsolete studies, data, and information relating to HbBs. The team also found it difficult to access a single source with information on all aspects of HbBs in most countries and as a result was forced to rely on search engines to access the content available. The third main difficulty was that many countries of the world – especially the developed world – have an ingrained logic of handling HbBs as they do the SME sector and in a manner similar to their treatment of conventional, non-HbBs. This means that the relevant regulations and conditions are applied to HbBs on top of other conditions which reflect their home-based nature.
The most important results and lessons learned from international and regional experiences of interest addressed by the study may be classified into four main themes as follows:
10.1 The Legislative and Regulatory Framework for HbBs
• Most international experiences are characterized by providing a legislative and regulatory framework for HbBs, where in order to conduct an HbB, the business must be legally registered. This is also the case for conventional businesses that do not take the home as the main headquarters. HbBs bear all obligations associated with this framework, an example of which includes paying the taxes imposed on the business (United States, Canada, United Kingdom, Singapore, New Zealand).
• According to these international experiences, a distinction can be made between two types of registration: For the first, registration takes place through the same commercial register form applicable if a company is not based in a home (like Singapore, where registration takes place online). The second involves a separate form for HbBs, so that all of the requirements and rules that the businesses must comply with may be included (for example, some Canadian cities).
• International experiences also indicate a depth of regulatory frameworks applicable to HbBs, beginning after obtaining the homeowner’s approval and a stipulation within the rent contract that an HbB may be conducted. The HbB owner must also comply with all laws and ordinances within their geographic area and obtain commercial and other permits if the activity of the business requires such (particularly in the US and Canada).
• In Canada and Singapore, it was possible to examine various legal structures for HbBs, including allowing the businesses to choose a structure according to its nature. In Canada the HbB could choose to become a sole proprietorship, a partnership company, a limited company, or a cooperative company. In Singapore an HbB can become a sole proprietorship, a partnership, a limited liability partnership, or a private limited company. It is worth noting that these legal models also apply to non-HbBs.
• Subjection to taxation is one of the main requirements that HbBs must comply with across international experiences, just as is the case for non-HbBs. In order to facilitate matters for these businesses, these countries have sponsored special treatment for HbBs and added a portion of the costs of using the home as the headquarters for work to business costs. This characteristic is absent from the Gulf countries because the main target is those who are not subject to taxation.
• With regard to the Gulf Cooperation Council (GCC) countries, HbBs are relatively new and take on a social justice bent; in essence, they are an extension of productive families’ projects. Typically the authority concerned with developing SMEs and the Ministries of Social Affairs and Labor take on efforts to coordinate and issue HbB permits.
• In the UAE, issuing HbB licenses takes place in coordination with the Department of Economic Development and the main body concerned with developing SMEs. Similarly, in Oman, cooperation takes place between the Public Authority for the Development of SMEs and the Ministry of Commerce and Industry. And in the nascent Saudi experience, the Ministry of Commerce and Industry is responsible for issuing such licenses.
• According to some experiences, the regulatory framework for HbBs renders HbB insurance mandatory (as in Canada and United Kingdom)
• The considerations organizing HbB work normally vary within one country and among countries in terms of labor authorizations (or a lack thereof) and the presence of an Ad Panel. However, all shared a number of considerations to maintain the nature and safety of a residential area (for example, not making noise, storing dangerous goods and substances, disrupting traffic, using spaces outside the home, or causing unpleasant and noxious odors and fumes).
• Many cases of conducting multiple projects in the same housing unit were also examined (as in the Canadian experience, for example) while other cases stipulated that a permit must be for only one HbB per home (the UAE, for example).
7170 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
10. ConclusionThe number of HbBs across the world grows daily. This phenomenon has been accompanied by growing government attention to providing a legislative and regulatory framework for those projects in order to make them eligible to join formal economic activity on the one hand and maintain the nature of the residential unit and area on the other. HbBs are also considered to fall under the micro-business and SME categories, which allows HbBs to benefit from the advantages and preferential treatment provided by many countries of the world to this important component of the private business sector.
As the State of Qatar aspires to develop the private sector in all its variety in line with national plans and development strategies, an urgent need has emerged to take an interest in HbBs and sponsor efforts to understand their current reality and mechanisms for advancement through lessons learned from a variety of international experiences. In this vein, Qatar Development Bank, in collaboration with the Ministry of Labor and Social Affairs and the Social Development Center, sponsored a research project to demonstrate the reality of these projects at the national level, explore the main features of a number of international and regional experiences that may be drawn from, and finally develop a package of initiatives targeting efforts to develop HbBs in Qatar.
Thus this study came as the second output of the research project, exploring relevant regional and international experiences. The study put a discussion on the table of the main features of experiences in developing and regulating HbBs in ten countries namely: United States of America, Canada, the United Kingdom, Singapore, New Zealand, the United Arab Emirates, Saudi Arabia, Oman, Bahrain, and Kuwait. The study conducted a qualitative analysis of sources available on relevant legislative and regulatory frameworks as well as the main initiatives to support and assist these businesses and encourage excellence.
The study mainly relied on official online content available on the Internet. Here it should be noted that the research team was faced with three main limitations. The first involved limited or obsolete studies, data, and information relating to HbBs. The team also found it difficult to access a single source with information on all aspects of HbBs in most countries and as a result was forced to rely on search engines to access the content available. The third main difficulty was that many countries of the world – especially the developed world – have an ingrained logic of handling HbBs as they do the SME sector and in a manner similar to their treatment of conventional, non-HbBs. This means that the relevant regulations and conditions are applied to HbBs on top of other conditions which reflect their home-based nature.
The most important results and lessons learned from international and regional experiences of interest addressed by the study may be classified into four main themes as follows:
10.1 The Legislative and Regulatory Framework for HbBs
• Most international experiences are characterized by providing a legislative and regulatory framework for HbBs, where in order to conduct an HbB, the business must be legally registered. This is also the case for conventional businesses that do not take the home as the main headquarters. HbBs bear all obligations associated with this framework, an example of which includes paying the taxes imposed on the business (United States, Canada, United Kingdom, Singapore, New Zealand).
• According to these international experiences, a distinction can be made between two types of registration: For the first, registration takes place through the same commercial register form applicable if a company is not based in a home (like Singapore, where registration takes place online). The second involves a separate form for HbBs, so that all of the requirements and rules that the businesses must comply with may be included (for example, some Canadian cities).
• International experiences also indicate a depth of regulatory frameworks applicable to HbBs, beginning after obtaining the homeowner’s approval and a stipulation within the rent contract that an HbB may be conducted. The HbB owner must also comply with all laws and ordinances within their geographic area and obtain commercial and other permits if the activity of the business requires such (particularly in the US and Canada).
• In Canada and Singapore, it was possible to examine various legal structures for HbBs, including allowing the businesses to choose a structure according to its nature. In Canada the HbB could choose to become a sole proprietorship, a partnership company, a limited company, or a cooperative company. In Singapore an HbB can become a sole proprietorship, a partnership, a limited liability partnership, or a private limited company. It is worth noting that these legal models also apply to non-HbBs.
• Subjection to taxation is one of the main requirements that HbBs must comply with across international experiences, just as is the case for non-HbBs. In order to facilitate matters for these businesses, these countries have sponsored special treatment for HbBs and added a portion of the costs of using the home as the headquarters for work to business costs. This characteristic is absent from the Gulf countries because the main target is those who are not subject to taxation.
• With regard to the Gulf Cooperation Council (GCC) countries, HbBs are relatively new and take on a social justice bent; in essence, they are an extension of productive families’ projects. Typically the authority concerned with developing SMEs and the Ministries of Social Affairs and Labor take on efforts to coordinate and issue HbB permits.
• In the UAE, issuing HbB licenses takes place in coordination with the Department of Economic Development and the main body concerned with developing SMEs. Similarly, in Oman, cooperation takes place between the Public Authority for the Development of SMEs and the Ministry of Commerce and Industry. And in the nascent Saudi experience, the Ministry of Commerce and Industry is responsible for issuing such licenses.
• According to some experiences, the regulatory framework for HbBs renders HbB insurance mandatory (as in Canada and United Kingdom)
• The considerations organizing HbB work normally vary within one country and among countries in terms of labor authorizations (or a lack thereof) and the presence of an Ad Panel. However, all shared a number of considerations to maintain the nature and safety of a residential area (for example, not making noise, storing dangerous goods and substances, disrupting traffic, using spaces outside the home, or causing unpleasant and noxious odors and fumes).
• Many cases of conducting multiple projects in the same housing unit were also examined (as in the Canadian experience, for example) while other cases stipulated that a permit must be for only one HbB per home (the UAE, for example).
7372 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
10.2 Authorized Activities for HbB Work
• International and regional experiences studied concluded that there are variations in approaches to defining HbBs as well as the nature of authorized activities for HbBs.
• In the United States, for example, the field is open to all activities for which regulations and rules for home-based work are applied, and these businesses are handled from a commercial perspective – just as is in the case for non-HbBs – and what distinguishes these businesses is the location of work only.
• The authorized activities in the Gulf countries – specifically the UAE, Bahrain, and Oman – are sometimes directed only toward women so that these activities take on a social nature and empower families rather than serving a stand-alone business activity (for example, the Mubdiah License in the Emirate of Abu Dhabi and the Executive Program proposed by the Council of Saudi Chambers).
10.3 Home-based Food Preparation for the Purpose of Sale
• With regard to food prepared in the home for the purpose of sale, legislators’ visions vary among the international and regional experiences studied.
• In the US, in order to preserve public health, some US states have issued a “framework law on food prepared at home” for businesses which prepare food from the home, regardless of whether the business itself be home-based or not. The law distinguishes between businesses which prepare food from the home for the purpose of direct sale, and those that prepare food for the purpose of direct and indirect sale.
• In Canada, the government introduced a special section of legislation pertaining to food processing premises and the framework law for food hygiene, but did not create a separate law on the topic. Additionally, special guidelines for HbBs that prepare foods were issued.
• In Singapore, legislators preferred to include in preparation of foods on wide scale for the purpose of sale among restricted activities for HbBs. These businesses are authorized to produce small quantities of food for sale to friends and acquaintances.
• In the Gulf countries, food activities are authorized for HbBs, without examining the requirements of these activities. The exception to this is the Executive Program proposed by the Council of Saudi Chambers which contains the details of all conditions and regulations pertaining to making food and packaging, making, and selling dates. This is the only instance in which detailed conditions and regulations were proposed for each activity of a different nature.
10.4 Efforts Supporting and Encouraging Excellence among HbBs
• In the framework of some countries’ efforts to encourage their citizens to become entrepreneurs and begin their own HbBs, concerned authorities offer various benefits and services in the event that the business is licensed. These benefits include free subscriptions to the Chamber of Commerce (ex. Emirate of Sharjah), training courses and business incubators (ex. Kuwait and Oman), and participation in fairs and economic events inside and outside the country, as well as e-marketing of HbB products (ex. Bahrain).
• Because HbBs are considered to fall within the SME category, they are also eligible to take advantage of the services and benefits offered by agencies responsible for developing SMEs. This is because HbBs are considered an integral part of this sector if they become legal.
• In the Gulf countries, efforts supporting HbBs are not limited to just government bodies, and instead include the voluntary efforts undertaken by companies in the framework of strengthening corporate social responsibility.
• Encouraging excellence among HbBs is one of the hallmarks of the majority of experiences that have been addressed throughout the components of this study. It is possible to distinguish two categories; the first involves competitions specialized for HbBs (ex. the US), while the second is for competitions which target SMEs (ex the UAE).
7372 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
10.2 Authorized Activities for HbB Work
• International and regional experiences studied concluded that there are variations in approaches to defining HbBs as well as the nature of authorized activities for HbBs.
• In the United States, for example, the field is open to all activities for which regulations and rules for home-based work are applied, and these businesses are handled from a commercial perspective – just as is in the case for non-HbBs – and what distinguishes these businesses is the location of work only.
• The authorized activities in the Gulf countries – specifically the UAE, Bahrain, and Oman – are sometimes directed only toward women so that these activities take on a social nature and empower families rather than serving a stand-alone business activity (for example, the Mubdiah License in the Emirate of Abu Dhabi and the Executive Program proposed by the Council of Saudi Chambers).
10.3 Home-based Food Preparation for the Purpose of Sale
• With regard to food prepared in the home for the purpose of sale, legislators’ visions vary among the international and regional experiences studied.
• In the US, in order to preserve public health, some US states have issued a “framework law on food prepared at home” for businesses which prepare food from the home, regardless of whether the business itself be home-based or not. The law distinguishes between businesses which prepare food from the home for the purpose of direct sale, and those that prepare food for the purpose of direct and indirect sale.
• In Canada, the government introduced a special section of legislation pertaining to food processing premises and the framework law for food hygiene, but did not create a separate law on the topic. Additionally, special guidelines for HbBs that prepare foods were issued.
• In Singapore, legislators preferred to include in preparation of foods on wide scale for the purpose of sale among restricted activities for HbBs. These businesses are authorized to produce small quantities of food for sale to friends and acquaintances.
• In the Gulf countries, food activities are authorized for HbBs, without examining the requirements of these activities. The exception to this is the Executive Program proposed by the Council of Saudi Chambers which contains the details of all conditions and regulations pertaining to making food and packaging, making, and selling dates. This is the only instance in which detailed conditions and regulations were proposed for each activity of a different nature.
10.4 Efforts Supporting and Encouraging Excellence among HbBs
• In the framework of some countries’ efforts to encourage their citizens to become entrepreneurs and begin their own HbBs, concerned authorities offer various benefits and services in the event that the business is licensed. These benefits include free subscriptions to the Chamber of Commerce (ex. Emirate of Sharjah), training courses and business incubators (ex. Kuwait and Oman), and participation in fairs and economic events inside and outside the country, as well as e-marketing of HbB products (ex. Bahrain).
• Because HbBs are considered to fall within the SME category, they are also eligible to take advantage of the services and benefits offered by agencies responsible for developing SMEs. This is because HbBs are considered an integral part of this sector if they become legal.
• In the Gulf countries, efforts supporting HbBs are not limited to just government bodies, and instead include the voluntary efforts undertaken by companies in the framework of strengthening corporate social responsibility.
• Encouraging excellence among HbBs is one of the hallmarks of the majority of experiences that have been addressed throughout the components of this study. It is possible to distinguish two categories; the first involves competitions specialized for HbBs (ex. the US), while the second is for competitions which target SMEs (ex the UAE).
7574 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
Sources• General Secretariat for Development Planning, “National Development Strategy of the State of
Qatar 2011-2016.” Doha: March 2011
• The Omani Sanad Programme (2015), http://www.oman.om/wps/portal
• Oman Development Bank (2015), “Development Loans” http://www.odb.com.om/DevelopmentLoans.aspx
• Saudi Credit and Savings Bank, “Productive Families Track” http://www.scb.gov.sa/Loans/SmallProjectfamily.aspx
• Government of Sharjah – Department of Economic Development (2015) “The Eitimad License” http://www.eitimad.ae/ar/page-41/page-42.html
• The Musharka Initiative to Rehabilitate and Operate Small Businesses (2015), http://m-musharaka.com
• Abu Dhabi Business Women Council (2012) “Mubdiah License” http://www.adbusinesswomen.ae
• The Ministry of Social Affairs (Saudi Arabia), the Productive Families Project, 16 February 2014, < http://www.mosa-d.gov.sa/daman/Osar.html>
• Aaron, Jesse (2014), “Vital Small Business Statistics, Trends and Facts for 2014, February 13, http://www.getbusymedia.com/vital-small-business-statistics-trends-and-facts-for-2014/
• Adweek, “Half of U.S. Businesses are Home-based”, 30 January, 2012, http://www.adweek.com/sa-article/half-us-businesses-are-home-based-137834
• ANA Bank New Zealand Limited (2015), “Running your business from home”, https://bizhub.anz.co.nz/resources/running-your-business-from-home.aspx
• British Colombia Laws (2014), “Public Health Act: Food Premises Regulation”, 22 February, http://www.bclaws.ca/Recon/document/ID/freeside/11_210_99
• California Legislative Information (2012). “California Homemade Food Act”. Official website, http://leginfo.legislature.ca.gov/
• Campbell, Anita (2013), “69 percent of U.S. Entrepreneurs Start their Businesses at Home”, Small Business Trends, July 2, http://smallbiztrends.com/2013/07/home-based-businesses-startup.html
• City of Ottawa (2014: A). “Licenses and Permits By-Law: Home-based Business Provisions”. Section 127, http://ottawa.ca/en/residents/laws-licenses-and-permits/laws/city-ottawa-zoning-law/home-based-business-provisions-sec
• City of Ottawa (2014: B). “Licenses and Permits By-Law: Home-based Business in RU and AG Zones”. Section 128, http://ottawa.ca/en/residents/laws-licenses-and-permits/laws/city-ottawa-zoning-law/home-based-businesses-ru-and-ag
• City of Ottawa (2014: C). “Licenses and Permits By-Law: Home-based Businesses in Villages”. Section 128A, http://ottawa.ca/en/residents/laws-licenses-and-permits/laws/city-ottawa-zoning-law/home-based-businesses-villages
• Enterprise One (2015), “Online Business Licensing Service: Home Office Scheme”, Singapore, https://licences.business.gov.sg/SHINE/sop/WebPageHandler?p=OASIS&pn=SelectLicences&LicenceID=1422
• Environmental Health (undated), “Guidelines for Cottage Industry Involved in Home Food Production”, Canada, http://www.gov.pe.ca/photos/original/doh_cottage_gl.pdf
• Forbes (2013)- “16 Surprising Statistics about Small Businesses”. 9/09/2013, 14/10/2014, http://www.forbes.com/sites/jasonnazar/2013/09/09/16-surprising-statistics-about-small-businesses/
• Housing and Development Board (2015), “Living in HDB: Home Business
• Insurance Bureau of Canada (2014), “Home Business”, http://www.ibc.ca/on/business/business-insurance-coverage/home-business
• Ministry of Competition, Science and Enterprise & Western Economic Diversification Canada (2002), “Starting a Home-based Business: Manual for Success”, Britich Colombia, Revised Version, June, http://www.smallbusinessbc.ca/pdf/hbb2002.pdf
• Ministry of Education (2011), “Licensing Criteria for Home-based Education and Care Services 2008”, revised version, New Zealand, July, http://www.lead.ece.govt.nz/~/media/Educate/Files/Reference%20
Downloads/Lead/Files/Criteria/2008LicensingCriteriaForHomeBasedEducationAndCareServicesBooklet1.pdf
• Ministry of Education (2015), “Home based Early Childhood Education Services”, New Zealand, February, http://www.lead.ece.govt.nz/LeadHome/ServiceTypes/HomeBasedECEServices.aspx
• Ottawa Documents (undated), “Ottawa Home-based Business Guide”, http://documents.ottawa.ca/sites/documents.ottawa.ca/files/documents/cap124601.pdf
• Rampenthal, Chas (2012). “Is Your Home-based Business Illegal?”. Inc.com, 14/10/2014, http://www.inc.com/chas-rampenthal/legal-checklist-home-based-business.html
• Singapore SME Toolkit (2015), “Home Based Business”, http://singapore.smetoolkit.org/singapore/en/content/en/54439/Home-Based-Business
• Small Business Administration (2015), “2015 SBA Mississippi Home Based Business Champion of the Year”, https://www.sba.gov/sites/default/files/articles/MS%202015%20Home-Based%20Business%20Champion.pdf
• Startup Nation (2014), “Home-based 100 Competition”, http://www.startupnation.com/home-based-100/HOME.php
• Susan Ward (2015), “Small Business Info Canada: Home Based Business Tax Deductions You Don’t Want to Miss”, About Money Portal, http://sbinfocanada.about.com/od/homebusinesstax/a/hbbdeductions.htm
• The Credit Union (2013), “New Home-based Business Insurance from the Personal”, http://www.mycreditunion.ca/belong/article_new-home-based-business-insurance-personal.php
• The Open University Business School (2014), “Home-based Businesses and Online Home-based Businesses”, http://www.open.ac.uk/business-school/research/projects/home-based-businesses-hbbs
7574 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
Sources• General Secretariat for Development Planning, “National Development Strategy of the State of
Qatar 2011-2016.” Doha: March 2011
• The Omani Sanad Programme (2015), http://www.oman.om/wps/portal
• Oman Development Bank (2015), “Development Loans” http://www.odb.com.om/DevelopmentLoans.aspx
• Saudi Credit and Savings Bank, “Productive Families Track” http://www.scb.gov.sa/Loans/SmallProjectfamily.aspx
• Government of Sharjah – Department of Economic Development (2015) “The Eitimad License” http://www.eitimad.ae/ar/page-41/page-42.html
• The Musharka Initiative to Rehabilitate and Operate Small Businesses (2015), http://m-musharaka.com
• Abu Dhabi Business Women Council (2012) “Mubdiah License” http://www.adbusinesswomen.ae
• The Ministry of Social Affairs (Saudi Arabia), the Productive Families Project, 16 February 2014, < http://www.mosa-d.gov.sa/daman/Osar.html>
• Aaron, Jesse (2014), “Vital Small Business Statistics, Trends and Facts for 2014, February 13, http://www.getbusymedia.com/vital-small-business-statistics-trends-and-facts-for-2014/
• Adweek, “Half of U.S. Businesses are Home-based”, 30 January, 2012, http://www.adweek.com/sa-article/half-us-businesses-are-home-based-137834
• ANA Bank New Zealand Limited (2015), “Running your business from home”, https://bizhub.anz.co.nz/resources/running-your-business-from-home.aspx
• British Colombia Laws (2014), “Public Health Act: Food Premises Regulation”, 22 February, http://www.bclaws.ca/Recon/document/ID/freeside/11_210_99
• California Legislative Information (2012). “California Homemade Food Act”. Official website, http://leginfo.legislature.ca.gov/
• Campbell, Anita (2013), “69 percent of U.S. Entrepreneurs Start their Businesses at Home”, Small Business Trends, July 2, http://smallbiztrends.com/2013/07/home-based-businesses-startup.html
• City of Ottawa (2014: A). “Licenses and Permits By-Law: Home-based Business Provisions”. Section 127, http://ottawa.ca/en/residents/laws-licenses-and-permits/laws/city-ottawa-zoning-law/home-based-business-provisions-sec
• City of Ottawa (2014: B). “Licenses and Permits By-Law: Home-based Business in RU and AG Zones”. Section 128, http://ottawa.ca/en/residents/laws-licenses-and-permits/laws/city-ottawa-zoning-law/home-based-businesses-ru-and-ag
• City of Ottawa (2014: C). “Licenses and Permits By-Law: Home-based Businesses in Villages”. Section 128A, http://ottawa.ca/en/residents/laws-licenses-and-permits/laws/city-ottawa-zoning-law/home-based-businesses-villages
• Enterprise One (2015), “Online Business Licensing Service: Home Office Scheme”, Singapore, https://licences.business.gov.sg/SHINE/sop/WebPageHandler?p=OASIS&pn=SelectLicences&LicenceID=1422
• Environmental Health (undated), “Guidelines for Cottage Industry Involved in Home Food Production”, Canada, http://www.gov.pe.ca/photos/original/doh_cottage_gl.pdf
• Forbes (2013)- “16 Surprising Statistics about Small Businesses”. 9/09/2013, 14/10/2014, http://www.forbes.com/sites/jasonnazar/2013/09/09/16-surprising-statistics-about-small-businesses/
• Housing and Development Board (2015), “Living in HDB: Home Business
• Insurance Bureau of Canada (2014), “Home Business”, http://www.ibc.ca/on/business/business-insurance-coverage/home-business
• Ministry of Competition, Science and Enterprise & Western Economic Diversification Canada (2002), “Starting a Home-based Business: Manual for Success”, Britich Colombia, Revised Version, June, http://www.smallbusinessbc.ca/pdf/hbb2002.pdf
• Ministry of Education (2011), “Licensing Criteria for Home-based Education and Care Services 2008”, revised version, New Zealand, July, http://www.lead.ece.govt.nz/~/media/Educate/Files/Reference%20
Downloads/Lead/Files/Criteria/2008LicensingCriteriaForHomeBasedEducationAndCareServicesBooklet1.pdf
• Ministry of Education (2015), “Home based Early Childhood Education Services”, New Zealand, February, http://www.lead.ece.govt.nz/LeadHome/ServiceTypes/HomeBasedECEServices.aspx
• Ottawa Documents (undated), “Ottawa Home-based Business Guide”, http://documents.ottawa.ca/sites/documents.ottawa.ca/files/documents/cap124601.pdf
• Rampenthal, Chas (2012). “Is Your Home-based Business Illegal?”. Inc.com, 14/10/2014, http://www.inc.com/chas-rampenthal/legal-checklist-home-based-business.html
• Singapore SME Toolkit (2015), “Home Based Business”, http://singapore.smetoolkit.org/singapore/en/content/en/54439/Home-Based-Business
• Small Business Administration (2015), “2015 SBA Mississippi Home Based Business Champion of the Year”, https://www.sba.gov/sites/default/files/articles/MS%202015%20Home-Based%20Business%20Champion.pdf
• Startup Nation (2014), “Home-based 100 Competition”, http://www.startupnation.com/home-based-100/HOME.php
• Susan Ward (2015), “Small Business Info Canada: Home Based Business Tax Deductions You Don’t Want to Miss”, About Money Portal, http://sbinfocanada.about.com/od/homebusinesstax/a/hbbdeductions.htm
• The Credit Union (2013), “New Home-based Business Insurance from the Personal”, http://www.mycreditunion.ca/belong/article_new-home-based-business-insurance-personal.php
• The Open University Business School (2014), “Home-based Businesses and Online Home-based Businesses”, http://www.open.ac.uk/business-school/research/projects/home-based-businesses-hbbs
7776 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• The Start Up Donut (2014), “Q&A: Setting up a Home-based Business”, http://www.startupdonut.co.uk/startup/business-premises/q-a-setting-up-a-home-based-business
• The U.S. Small Business Administration (2014: A). “Home-based Business Zoning Laws”. Official homepage, 14/10/2014, http://www.sba.gov/content/home-based-business-zoning-laws
• The U.S. Small Business Administration (2014: B). “Run a Home-based Business? – Find the Licenses and Permits You Need”. Official website, 14/10/2014, http://www.sba.gov/blogs/run-home-based-business-find-licenses-and-permits-you-need
• Thompson, Debra (2010). “Home- Based Business Guide”. U.S. Family Liaison Office, November, http://www.state.gov/documents/organization/62809.pdf
• U.S. Internal Revenue Service (2013). “Business Use of Your Home”. Publication no. 587, Official homepage, 14/10/2014, http://www.irs.gov/publications/p587/index.html
• U.S. Internal Revenue Service (2014). “Home Office Deduction”. Official homepage, 14/10/2014, http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Home-Office-Deduction
• Urban Redevelopment Authority (2015), “Home Office: Businesses Permitted/ not Permitted under the Home Office Scheme”, Singapore, http://www.ura.gov.sg/uol/home-office/Register/Guidelines/Businesses-under.aspx
• World Economic Forum (2014), “The Global Gender Gap Report 2014”, http://www.weforum.org/reports/global-gender-gap-report-2014
Appendix (1): Council of Saudi Chambers: Terms and Regulations for Conducting Some HbBs
No. Activity Special Terms and Regulations
First: The Ministry of Municipalities and Rural Affairs
1 Sewing, embroidery, and making bedspreads of all types
• The location where work is practiced shall be external to and independent from the home, with a private entrance.
2 Designing and making women’s abayas
• Fitting rooms shall be provided.
3 Designing and selling/renting ready-made garments
4 Hairdressing and makeup
• Tools and cosmetics used shall comply with the terms of the General Authority for Specifications and Standardization.
• A sterilization device for used tools shall be present.
5 Selling Cosmetics • All cosmetic products shall be registered with the General Authority for Specifications and Standardization and bear the expiration date.
6 Preparing and cooking food
• The kitchen shall be external and not inside the house.
• Follow-up shall take place for the expiration date for food materials used in the kitchen.
• An appropriate location shall be arranged in accordance with safety and health standards.
7 Food processing • A scale shall be provided in order to ascertain the quality of oil used to fry, with another scale for measuring the temperature of meat and chicken.
8 Packaging, processing, and selling dates
• The necessary food preservation devices shall be provided and no food or drinks prepared on the previous day may be served.
• General hygiene and cleanliness for kitchen tools shall be maintained.
• Health certificates shall be issued for employees from Environmental Health, and employees shall wear a uniform, gloves, and a head covering and health card displayed.
• All food materials used to prepare meals, whether fresh or cooked, shall be clean and free of damage and decay, fit for human consumption, and conform to Saudi Arabian specifications and standards for each type.
• It is preferable that one car be designated to delivering orders to prevent congestion within residential neighborhoods.
• The space devoted to preparation, processing, and serving (preparation, storage, and washing areas) shall comprise no less than 40% of the kitchen.
9 Establishing a Bazaar • The license holder shall bear responsibility for legal participation and the integrity of offers.
7776 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
• The Start Up Donut (2014), “Q&A: Setting up a Home-based Business”, http://www.startupdonut.co.uk/startup/business-premises/q-a-setting-up-a-home-based-business
• The U.S. Small Business Administration (2014: A). “Home-based Business Zoning Laws”. Official homepage, 14/10/2014, http://www.sba.gov/content/home-based-business-zoning-laws
• The U.S. Small Business Administration (2014: B). “Run a Home-based Business? – Find the Licenses and Permits You Need”. Official website, 14/10/2014, http://www.sba.gov/blogs/run-home-based-business-find-licenses-and-permits-you-need
• Thompson, Debra (2010). “Home- Based Business Guide”. U.S. Family Liaison Office, November, http://www.state.gov/documents/organization/62809.pdf
• U.S. Internal Revenue Service (2013). “Business Use of Your Home”. Publication no. 587, Official homepage, 14/10/2014, http://www.irs.gov/publications/p587/index.html
• U.S. Internal Revenue Service (2014). “Home Office Deduction”. Official homepage, 14/10/2014, http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Home-Office-Deduction
• Urban Redevelopment Authority (2015), “Home Office: Businesses Permitted/ not Permitted under the Home Office Scheme”, Singapore, http://www.ura.gov.sg/uol/home-office/Register/Guidelines/Businesses-under.aspx
• World Economic Forum (2014), “The Global Gender Gap Report 2014”, http://www.weforum.org/reports/global-gender-gap-report-2014
Appendix (1): Council of Saudi Chambers: Terms and Regulations for Conducting Some HbBs
No. Activity Special Terms and Regulations
First: The Ministry of Municipalities and Rural Affairs
1 Sewing, embroidery, and making bedspreads of all types
• The location where work is practiced shall be external to and independent from the home, with a private entrance.
2 Designing and making women’s abayas
• Fitting rooms shall be provided.
3 Designing and selling/renting ready-made garments
4 Hairdressing and makeup
• Tools and cosmetics used shall comply with the terms of the General Authority for Specifications and Standardization.
• A sterilization device for used tools shall be present.
5 Selling Cosmetics • All cosmetic products shall be registered with the General Authority for Specifications and Standardization and bear the expiration date.
6 Preparing and cooking food
• The kitchen shall be external and not inside the house.
• Follow-up shall take place for the expiration date for food materials used in the kitchen.
• An appropriate location shall be arranged in accordance with safety and health standards.
7 Food processing • A scale shall be provided in order to ascertain the quality of oil used to fry, with another scale for measuring the temperature of meat and chicken.
8 Packaging, processing, and selling dates
• The necessary food preservation devices shall be provided and no food or drinks prepared on the previous day may be served.
• General hygiene and cleanliness for kitchen tools shall be maintained.
• Health certificates shall be issued for employees from Environmental Health, and employees shall wear a uniform, gloves, and a head covering and health card displayed.
• All food materials used to prepare meals, whether fresh or cooked, shall be clean and free of damage and decay, fit for human consumption, and conform to Saudi Arabian specifications and standards for each type.
• It is preferable that one car be designated to delivering orders to prevent congestion within residential neighborhoods.
• The space devoted to preparation, processing, and serving (preparation, storage, and washing areas) shall comprise no less than 40% of the kitchen.
9 Establishing a Bazaar • The license holder shall bear responsibility for legal participation and the integrity of offers.
7978 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
No. Activity Special Terms and Regulations
Second: The Ministry of Commerce and Industry
10 Consultations • A university degree in the same field in addition to three years of experience.
• The license holder shall sign the reports and consultations issued herself.
• The license holder shall include her name, number, license, and the date on all reports and information issued.
Third: The General Organization for Technical Education and Vocational Training
11 Fashion design and sewing training
• Fitting rooms shall be provided.
12 Food manufacturing and cooking training
• A health certificate must be obtained.
• Materials registered with the Standards, Metrology, and Quality Organization must be used.
13 Photography training • Trainers may not keep any pictures of female trainers.
• Pictures must be taken on the trainee’s personal camera and she assumes full responsibility in the event that they are lost.
• General controls and alerts must be established within the training headquarters, personal photos must be kept, and no third parties may be photographed.
• Modesty must be taken into account during filming and training.
14 Cosmetology training (hair and skin)
• Materials registered with the Standards, Metrology, and Quality Organization must be used.
• Modesty shall be taken into account during the training.
15 Female Employee Training
• A recommendation regarding the young woman’s good conduct and behavior for a leadership position (government or private) must be prepared.
• A list of the names of workers in the home must be prepared including the trainees, sponsor and residency numbers, or a copy of the entrance visa including the sponsor name for each session.
No. Activity Special Terms and Regulations
Fourth: The Commission for Tourism and Antiquities
16 Tour guide • The license applicant must be no younger than 21 years of age.
• The applicant must pass tests and personal interviews evaluated by the Tourism Authority.
• The applicant must take a first aid course.
17 Tour trip organizer • The applicant must sign a pledge committing to display the license number on advertisements and publications while taking into account the applicable regulations issued by the competent authorities, and the activities, interest, and focus shall be on tourist trip services, without providing any other services related to this activity.
18 Travel and tourism services
• The license applicant must hold a qualification issued by a public airline or institute recognized by the Commission for Tourism and Antiquities in the field of the activity.
19 Renovating artifacts • The license applicant must hold an intermediate education qualification or higher.
20 Museum Guide • The license applicant must hold a high school education qualification or higher.
• Fluency in English and/or another language.
21 Heritage event organizer
• The license applicant must hold an intermediate education qualification or higher.
• The nature of heritage events must be respected.
22 Imitation of antiques and souvenirs
• The license applicant must hold an intermediate education qualification or higher.
• The remake must be identical to the original.
Fifth: The Ministry of Education
23 Remedial courses • The license applicant must be no less than 22 years of age.
• The license applicant must hold a university degree in the same subject and have the ability to teach.
• There must be a hall equipped for teaching.
• The license must allow for teaching young women across all educational levels, but boys shall be no older than eight years of age.
24 Designing educational programs
• The license applicant must be no younger than 22 years of age.
• The applicant must possess an educational degree in the area of her specialization.
• The Ministry of Education must approve the programs designed.
7978 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
No. Activity Special Terms and Regulations
Second: The Ministry of Commerce and Industry
10 Consultations • A university degree in the same field in addition to three years of experience.
• The license holder shall sign the reports and consultations issued herself.
• The license holder shall include her name, number, license, and the date on all reports and information issued.
Third: The General Organization for Technical Education and Vocational Training
11 Fashion design and sewing training
• Fitting rooms shall be provided.
12 Food manufacturing and cooking training
• A health certificate must be obtained.
• Materials registered with the Standards, Metrology, and Quality Organization must be used.
13 Photography training • Trainers may not keep any pictures of female trainers.
• Pictures must be taken on the trainee’s personal camera and she assumes full responsibility in the event that they are lost.
• General controls and alerts must be established within the training headquarters, personal photos must be kept, and no third parties may be photographed.
• Modesty must be taken into account during filming and training.
14 Cosmetology training (hair and skin)
• Materials registered with the Standards, Metrology, and Quality Organization must be used.
• Modesty shall be taken into account during the training.
15 Female Employee Training
• A recommendation regarding the young woman’s good conduct and behavior for a leadership position (government or private) must be prepared.
• A list of the names of workers in the home must be prepared including the trainees, sponsor and residency numbers, or a copy of the entrance visa including the sponsor name for each session.
No. Activity Special Terms and Regulations
Fourth: The Commission for Tourism and Antiquities
16 Tour guide • The license applicant must be no younger than 21 years of age.
• The applicant must pass tests and personal interviews evaluated by the Tourism Authority.
• The applicant must take a first aid course.
17 Tour trip organizer • The applicant must sign a pledge committing to display the license number on advertisements and publications while taking into account the applicable regulations issued by the competent authorities, and the activities, interest, and focus shall be on tourist trip services, without providing any other services related to this activity.
18 Travel and tourism services
• The license applicant must hold a qualification issued by a public airline or institute recognized by the Commission for Tourism and Antiquities in the field of the activity.
19 Renovating artifacts • The license applicant must hold an intermediate education qualification or higher.
20 Museum Guide • The license applicant must hold a high school education qualification or higher.
• Fluency in English and/or another language.
21 Heritage event organizer
• The license applicant must hold an intermediate education qualification or higher.
• The nature of heritage events must be respected.
22 Imitation of antiques and souvenirs
• The license applicant must hold an intermediate education qualification or higher.
• The remake must be identical to the original.
Fifth: The Ministry of Education
23 Remedial courses • The license applicant must be no less than 22 years of age.
• The license applicant must hold a university degree in the same subject and have the ability to teach.
• There must be a hall equipped for teaching.
• The license must allow for teaching young women across all educational levels, but boys shall be no older than eight years of age.
24 Designing educational programs
• The license applicant must be no younger than 22 years of age.
• The applicant must possess an educational degree in the area of her specialization.
• The Ministry of Education must approve the programs designed.
8180 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
No. Activity Special Terms and Regulations
25 Kindergarten • The license applicant must be no younger than 22 years of age.
• The applicant must possess an educational qualification specialized in kindergarten or psychology, or an educational qualification and training course for the kindergarten level.
• The applicant must provide identification documents or a valid residency for children who are not Saudi nationals.
• The applicant and her work team must pass the personal interview required to work in this position and have the required capabilities for handling situations as well as understanding and problem solving.
• The kindergarten may not accept those older than six years of age and younger than three years of age, and the child’s age must be specified on a birth certificate or family card for Saudi nationals and the residence book or passport for non-Saudi nationals.
• The classrooms designated for activities shall must suitable for such and boast an area of 5*6 meters and ten children per teacher.
• The classroom must be equipped with carrying beams to allow the child freedom of movement and learning and also to permit the teacher to observe.
• The building facilities and utilities must be appropriate for children aged 3-6.
26 Activity centers • The license applicant must be no younger than 22 years of age.
• The activity centers must present a work plan to the supervising entity authorized by the competent authority according to the type of activity well in advance before beginning the activity so that the plan may be considered and adopted. The plan includes the following:
- The site of the activity centers and the available capabilities.
- Camp activity plan and work timeline.
- The capabilities of the camp to practice the activity.
- The education level also must be specified.
• The license applicant must possess a qualification no lower than a diploma or the skills required to implement the programs and a license to practice the occupation.
No. Activity Special Terms and Regulations
Sixth: The Ministry of Social Affairs
27 Hosting Children • The license applicant must be no younger than 25 years of age.
• The applicant must have taken a first aid course.
• Regulations specific to the group targeted by the service:
- The children shall be 0-6 years old and those up to age 10 may be approved outside of formal study times or in exceptional circumstances.
- The child must be healthy and free of infectious diseases.
- The working hours of the hosting facility shall be between 6 am to 11 pm and these hours may be extended if necessary.
- The identity of each child’s guardian or proxy must be confirmed upon registering or picking the child up from the children’s hosting facility.
- The child’s guardian must be called in case of emergency in order to pick him or her up.
• Regulations that must be followed within the children’s hosting facility:
- The facility must be in a home (villa)
- The facility must be built of reinforced concrete, well-finished, and free of any technical or architectural flaws
- The facility must provide a sufficient number of rooms suitable for activities and programs and contain no less than two rooms and a bathroom. The area of the room must be 5x5 for every five children
- The facility must have good ventilation, sufficient lighting, and suitable air conditioning
- The facility must have sanitary bathrooms and good ventilation
- All equipment including furniture, tools, and devices required to operate the facility must be present
• Regulations and conditions pertaining to programs and services for children:
- The facility must offer social and recreational services for children
- All devices and media appropriate for children must be present
- Meals must be provided as per an additional license or through licensed entities
• Regulations pertaining to employees (assistants) in the hosting centers:
- The number of children per hostess must be no greater than five
- All employees (assistants) in the hosting facility must be women only
- Employees helping in the hosting wing must possess the highest educational qualification available or have taken courses or possess experience in the field of work
- The employees (assistants) must be subjected to medical tests before working in these centers to ensure that they are free of infectious diseases. These tests must be re-run annually.
- The employees (assistants) who are not Saudi nationals must have sponsorship (kafala) from the hosting facility owner or their guardians
8180 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
No. Activity Special Terms and Regulations
25 Kindergarten • The license applicant must be no younger than 22 years of age.
• The applicant must possess an educational qualification specialized in kindergarten or psychology, or an educational qualification and training course for the kindergarten level.
• The applicant must provide identification documents or a valid residency for children who are not Saudi nationals.
• The applicant and her work team must pass the personal interview required to work in this position and have the required capabilities for handling situations as well as understanding and problem solving.
• The kindergarten may not accept those older than six years of age and younger than three years of age, and the child’s age must be specified on a birth certificate or family card for Saudi nationals and the residence book or passport for non-Saudi nationals.
• The classrooms designated for activities shall must suitable for such and boast an area of 5*6 meters and ten children per teacher.
• The classroom must be equipped with carrying beams to allow the child freedom of movement and learning and also to permit the teacher to observe.
• The building facilities and utilities must be appropriate for children aged 3-6.
26 Activity centers • The license applicant must be no younger than 22 years of age.
• The activity centers must present a work plan to the supervising entity authorized by the competent authority according to the type of activity well in advance before beginning the activity so that the plan may be considered and adopted. The plan includes the following:
- The site of the activity centers and the available capabilities.
- Camp activity plan and work timeline.
- The capabilities of the camp to practice the activity.
- The education level also must be specified.
• The license applicant must possess a qualification no lower than a diploma or the skills required to implement the programs and a license to practice the occupation.
No. Activity Special Terms and Regulations
Sixth: The Ministry of Social Affairs
27 Hosting Children • The license applicant must be no younger than 25 years of age.
• The applicant must have taken a first aid course.
• Regulations specific to the group targeted by the service:
- The children shall be 0-6 years old and those up to age 10 may be approved outside of formal study times or in exceptional circumstances.
- The child must be healthy and free of infectious diseases.
- The working hours of the hosting facility shall be between 6 am to 11 pm and these hours may be extended if necessary.
- The identity of each child’s guardian or proxy must be confirmed upon registering or picking the child up from the children’s hosting facility.
- The child’s guardian must be called in case of emergency in order to pick him or her up.
• Regulations that must be followed within the children’s hosting facility:
- The facility must be in a home (villa)
- The facility must be built of reinforced concrete, well-finished, and free of any technical or architectural flaws
- The facility must provide a sufficient number of rooms suitable for activities and programs and contain no less than two rooms and a bathroom. The area of the room must be 5x5 for every five children
- The facility must have good ventilation, sufficient lighting, and suitable air conditioning
- The facility must have sanitary bathrooms and good ventilation
- All equipment including furniture, tools, and devices required to operate the facility must be present
• Regulations and conditions pertaining to programs and services for children:
- The facility must offer social and recreational services for children
- All devices and media appropriate for children must be present
- Meals must be provided as per an additional license or through licensed entities
• Regulations pertaining to employees (assistants) in the hosting centers:
- The number of children per hostess must be no greater than five
- All employees (assistants) in the hosting facility must be women only
- Employees helping in the hosting wing must possess the highest educational qualification available or have taken courses or possess experience in the field of work
- The employees (assistants) must be subjected to medical tests before working in these centers to ensure that they are free of infectious diseases. These tests must be re-run annually.
- The employees (assistants) who are not Saudi nationals must have sponsorship (kafala) from the hosting facility owner or their guardians
8382 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
No. Activity Special Terms and Regulations
28 Hosting the elderly • Regulations for the applicant:
- The applicant must be no younger than 30 years of age
- The applicant must possess a qualification no lower than high school or previous training courses or experience
- The applicant must have taken a first aid course
- The working hours for the hosting facility must be between 6am-11pm and this period may be extended when necessary
- A photocopy must be maintained of the identification of each individual who registers an elderly person in the hosting facility if they are unable to register themselves
- The person identified on the elderly person’s registration form must be called in case of emergency in order to pick them up
• Regulations pertaining to the group targeted by the service:
- The elderly women hosted must be 51 years of age or older
- The elderly women hosted must be free of infectious diseases
• Regulations that must be followed in the elderly hosting facility:
- The hosting facility must be located in a home (villa)
- The hosting facility must be built of reinforced concrete, well-finished, and free of technical and architectural flaw
- The hosting facility must have a sufficient number of suitable rooms and no less than one room and bathroom. The area of the room must be no less than 5x6 meters for five elderly women
- The hosting facility must have good ventilation, sufficient lighting, appropriate air conditioning, and any required equipment
• Regulations pertaining to programs and services granted to elderly women:
- The facility must provide social and recreational activities to elderly women
- All devices and means appropriate for elderly women must be present
- Meals must be provided through an additional license or by licensed entities
• Regulations pertaining to employees of the hospitality centers:
- All employees in the hosting facility must be women only
- The employees must be subjected to medical tests before beginning to work in these centers to ensure that they are free of any infectious diseases. These tests must be re-run annually
- Employees who are not Saudi nationals must have sponsorship (kafala) from the facility owner or their guardians
No. Activity Special Terms and Regulations
29 Hosting those with special needs
• Regulations pertaining to the service provider
- The license applicant must be no younger than 25 years of age.
- The license must be for one category of those with special needs only for example, the autistic, those with Down syndrome, the hearing impaired, and so on; if there is a desire to host another group, another license shall be extracted.
- The license applicant must possess an educational qualification no lower than a Bachelors degree specialized in that specific group of special needs individuals, or she shall possess practical experience or have taken previous courses in this field.
- The applicant must have taken a first aid course.
- A photocopy of the identification of each child’s guardian must be maintained upon registering at the hosting facility.
- The hosting facility’s working hours must be between 6 AM - 11 PM. This period may be extended when necessary.
- The child’s guardian must be called in case of emergency in order to pick him or her up.
• Regulations pertaining to the group targeted by the service:
- The children must be 0-12 years of age.
- The children must be free of infectious diseases.
• Regulations that must be met in the special needs hosting facility:
- The hosting facility must be located in a home (villa)
- The hosting facility must be made of reinforced concrete, well-finished, free of any technical and architectural flaws that may impede movement, and possess suitable exits
- A sufficient number of rooms appropriate for activities and programs must be available with no less than two rooms and one bathroom in a manner commensurate with the needs of these groups
- The facility must be well-ventilated, illuminated, and air conditioned
- The facility must have sanitary bathrooms and be well-ventilated
- All outfittings in terms of furniture, tools, and devices required to operate the facility must be present
• Regulations and conditions pertaining to programs and services offered to those with special needs:
- The facility must provide social and recreational services to those with special needs
- All devices and media suitable for those with special needs must be present
- Meals must be granted as per an additional license or through a licensed entity.
• Regulations pertaining to employees of special needs centers:
- The number of children hosted per employee must not exceed three
- All employees working in the hosting facility must be females only
- A hostess’ assistant must be present if the number of children exceeds three per employee and she must possess an educational qualification no lower than high school with practical experience or previous courses taken in this field,
- The employees must be subjected to medical tests before beginning to work in these centers to ensure that they are free of any infectious diseases. These tests must be re-run annually.
- Employees who are not Saudi nationals must have sponsorship (kafala) from the facility owner or their guardians.
8382 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
No. Activity Special Terms and Regulations
28 Hosting the elderly • Regulations for the applicant:
- The applicant must be no younger than 30 years of age
- The applicant must possess a qualification no lower than high school or previous training courses or experience
- The applicant must have taken a first aid course
- The working hours for the hosting facility must be between 6am-11pm and this period may be extended when necessary
- A photocopy must be maintained of the identification of each individual who registers an elderly person in the hosting facility if they are unable to register themselves
- The person identified on the elderly person’s registration form must be called in case of emergency in order to pick them up
• Regulations pertaining to the group targeted by the service:
- The elderly women hosted must be 51 years of age or older
- The elderly women hosted must be free of infectious diseases
• Regulations that must be followed in the elderly hosting facility:
- The hosting facility must be located in a home (villa)
- The hosting facility must be built of reinforced concrete, well-finished, and free of technical and architectural flaw
- The hosting facility must have a sufficient number of suitable rooms and no less than one room and bathroom. The area of the room must be no less than 5x6 meters for five elderly women
- The hosting facility must have good ventilation, sufficient lighting, appropriate air conditioning, and any required equipment
• Regulations pertaining to programs and services granted to elderly women:
- The facility must provide social and recreational activities to elderly women
- All devices and means appropriate for elderly women must be present
- Meals must be provided through an additional license or by licensed entities
• Regulations pertaining to employees of the hospitality centers:
- All employees in the hosting facility must be women only
- The employees must be subjected to medical tests before beginning to work in these centers to ensure that they are free of any infectious diseases. These tests must be re-run annually
- Employees who are not Saudi nationals must have sponsorship (kafala) from the facility owner or their guardians
No. Activity Special Terms and Regulations
29 Hosting those with special needs
• Regulations pertaining to the service provider
- The license applicant must be no younger than 25 years of age.
- The license must be for one category of those with special needs only for example, the autistic, those with Down syndrome, the hearing impaired, and so on; if there is a desire to host another group, another license shall be extracted.
- The license applicant must possess an educational qualification no lower than a Bachelors degree specialized in that specific group of special needs individuals, or she shall possess practical experience or have taken previous courses in this field.
- The applicant must have taken a first aid course.
- A photocopy of the identification of each child’s guardian must be maintained upon registering at the hosting facility.
- The hosting facility’s working hours must be between 6 AM - 11 PM. This period may be extended when necessary.
- The child’s guardian must be called in case of emergency in order to pick him or her up.
• Regulations pertaining to the group targeted by the service:
- The children must be 0-12 years of age.
- The children must be free of infectious diseases.
• Regulations that must be met in the special needs hosting facility:
- The hosting facility must be located in a home (villa)
- The hosting facility must be made of reinforced concrete, well-finished, free of any technical and architectural flaws that may impede movement, and possess suitable exits
- A sufficient number of rooms appropriate for activities and programs must be available with no less than two rooms and one bathroom in a manner commensurate with the needs of these groups
- The facility must be well-ventilated, illuminated, and air conditioned
- The facility must have sanitary bathrooms and be well-ventilated
- All outfittings in terms of furniture, tools, and devices required to operate the facility must be present
• Regulations and conditions pertaining to programs and services offered to those with special needs:
- The facility must provide social and recreational services to those with special needs
- All devices and media suitable for those with special needs must be present
- Meals must be granted as per an additional license or through a licensed entity.
• Regulations pertaining to employees of special needs centers:
- The number of children hosted per employee must not exceed three
- All employees working in the hosting facility must be females only
- A hostess’ assistant must be present if the number of children exceeds three per employee and she must possess an educational qualification no lower than high school with practical experience or previous courses taken in this field,
- The employees must be subjected to medical tests before beginning to work in these centers to ensure that they are free of any infectious diseases. These tests must be re-run annually.
- Employees who are not Saudi nationals must have sponsorship (kafala) from the facility owner or their guardians.
8584 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
No. Activity Special Terms and Regulations
Seventh: The Communications and Information Technology Commission
30 Audio Text Service • The provision of professional services such as medical, legal, engineering, financial, educational, and other types of consultations must be limited to professionals licensed to practice those activities according to the rules in force in the Kingdom
• The service must be provided only through the number allocated to the service, and the number may only be used to provide another service after receiving the required written approval from the Commission
• The service may not be used as a means to collect sums due for other services such as an online subscription services or any other service
• Beneficiary phone numbers may not be used, nor numbers obtained through users via advertising campaigns. Databases owned by the licensee or those which contain these numbers may not be sold to other entities or invested in any form without written permission from the holder of the phone number.
• When sending a promotional message to the user, it must be sent through a group small message service provider licensed by the Commission
• The term of the user’s receipt for the service upon calling him/her shall be no more than 10 seconds as a maximum. Calls may not be routed between databases and use of the databases as a means for routing phone calls, whether locally or internationally, must be avoided.
• All advertisements and publicity brochures for the service must contain the phone numbers publicly allocated to the service only as well as the name of the announcing body. The price of the call and the method for cancellation shall be written in clear and legible writing. There must be an offer for the call price written in a visual declaration so that beneficiaries are aware of their order before receiving the service.
31 Short Message Service • The message may only be sent to the subscriber after obtaining prior approval
• Provision of professional services (such as medical, legal, engineering, financial, educational, and other types of consultations) must be limited to professionals licensed to practice those activities according to the rules in force in the Kingdom
• All advertisements or promotional brochures for the service must display only the numbers allocated to the service and the publicly announced name of the entity. The price of the message and cancellation method must be written in clear and legible handwriting and there must be an offer for the price of the message written in a visual declaration so that beneficiaries are aware of their order before receiving the service.
• Message centers and communications networks licensed within the Kingdom must be used to send any messages
• Coordination must take place with telecommunications network operators licensed within the Kingdom when using their message sending centers located in the Kingdom to send a group of small messages to subscribers outside of the Kingdom. The licensee assumes any legal or financial fees they may be subject to in the event that the licensee violates international agreements that govern the relationship between internal operators with operators outside of the Kingdom such as the GSM Association AA 1 which pertains to messages sent among international operators and otherwise
• If the service provider uses the Internet to send and receive message, the servers must be located within the Kingdom
• The service must not be used as a means to collect amounts due for other services, such as an Internet website subscription services, or any other service, except after receiving prior permission from the Commission
No. Activity Special Terms and Regulations
32 Online Communication with Subscriber Service
• Permission must be obtained from the subscriber and appropriate times to call be determined in advance before making any online contact with him or her
• Permission must be obtained in advance from the subscriber regarding the types of services that he or she wishes to obtain for messages
• The cost and method for subscribing to the service must be specified as well as the cancellation method, which must be easy and clear. The service provider shall assume any fees that arise from a difficult subscription or cancellation service.
• Relevant numbers must be saved electronically and contact information must be maintained for no less than six months in order to allow the Commission to review the information when necessary. The service provider assumes responsibility for failing to provide this information when requested throughout this period
• The subscriber must be informed of the name of the service provider upon calling
• The circuits and lines used to provide online communication services to the subscriber must contain the name of the licensed service provider
• Only servers and networks licensed by the Commission may be utilized
• The servers must be located within the Kingdom
33 Email services • The service or link may only be provided through a global Internet network through the methods specified by the Commission
34 Network monitoring • All relevant regulations and instructions published by the Commission and other government agencies must be implemented and taken into account
35 Domain name registration service in accordance with governing laws and regulations
• Copies of the terms of use must be provided to subscribers
• The financial fee for services provided to subscribers as well as the features of the service must be clarified before he or she subscribes
• Technical support must be provided to subscribers around the clock
36 Online content publishing services
• When offering programs to subscribers, the service provider must comply with intellectual property provisions in accordance with the regulations governing such as well as any other relevant laws.
• Government websites may only be hosted on servers located within the Kingdom
37 Internet advertising services
• Accuracy must be taken into account with regard to using subscribers’ accounts and maintaining accounting information for one year
• Privacy for subscribers and their accounts must be ensured
• Third parties must refrain from engaging with user accounts and may not be informed of user PIN numbers
• Intellectual property rights must be adhered to
8584 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
No. Activity Special Terms and Regulations
Seventh: The Communications and Information Technology Commission
30 Audio Text Service • The provision of professional services such as medical, legal, engineering, financial, educational, and other types of consultations must be limited to professionals licensed to practice those activities according to the rules in force in the Kingdom
• The service must be provided only through the number allocated to the service, and the number may only be used to provide another service after receiving the required written approval from the Commission
• The service may not be used as a means to collect sums due for other services such as an online subscription services or any other service
• Beneficiary phone numbers may not be used, nor numbers obtained through users via advertising campaigns. Databases owned by the licensee or those which contain these numbers may not be sold to other entities or invested in any form without written permission from the holder of the phone number.
• When sending a promotional message to the user, it must be sent through a group small message service provider licensed by the Commission
• The term of the user’s receipt for the service upon calling him/her shall be no more than 10 seconds as a maximum. Calls may not be routed between databases and use of the databases as a means for routing phone calls, whether locally or internationally, must be avoided.
• All advertisements and publicity brochures for the service must contain the phone numbers publicly allocated to the service only as well as the name of the announcing body. The price of the call and the method for cancellation shall be written in clear and legible writing. There must be an offer for the call price written in a visual declaration so that beneficiaries are aware of their order before receiving the service.
31 Short Message Service • The message may only be sent to the subscriber after obtaining prior approval
• Provision of professional services (such as medical, legal, engineering, financial, educational, and other types of consultations) must be limited to professionals licensed to practice those activities according to the rules in force in the Kingdom
• All advertisements or promotional brochures for the service must display only the numbers allocated to the service and the publicly announced name of the entity. The price of the message and cancellation method must be written in clear and legible handwriting and there must be an offer for the price of the message written in a visual declaration so that beneficiaries are aware of their order before receiving the service.
• Message centers and communications networks licensed within the Kingdom must be used to send any messages
• Coordination must take place with telecommunications network operators licensed within the Kingdom when using their message sending centers located in the Kingdom to send a group of small messages to subscribers outside of the Kingdom. The licensee assumes any legal or financial fees they may be subject to in the event that the licensee violates international agreements that govern the relationship between internal operators with operators outside of the Kingdom such as the GSM Association AA 1 which pertains to messages sent among international operators and otherwise
• If the service provider uses the Internet to send and receive message, the servers must be located within the Kingdom
• The service must not be used as a means to collect amounts due for other services, such as an Internet website subscription services, or any other service, except after receiving prior permission from the Commission
No. Activity Special Terms and Regulations
32 Online Communication with Subscriber Service
• Permission must be obtained from the subscriber and appropriate times to call be determined in advance before making any online contact with him or her
• Permission must be obtained in advance from the subscriber regarding the types of services that he or she wishes to obtain for messages
• The cost and method for subscribing to the service must be specified as well as the cancellation method, which must be easy and clear. The service provider shall assume any fees that arise from a difficult subscription or cancellation service.
• Relevant numbers must be saved electronically and contact information must be maintained for no less than six months in order to allow the Commission to review the information when necessary. The service provider assumes responsibility for failing to provide this information when requested throughout this period
• The subscriber must be informed of the name of the service provider upon calling
• The circuits and lines used to provide online communication services to the subscriber must contain the name of the licensed service provider
• Only servers and networks licensed by the Commission may be utilized
• The servers must be located within the Kingdom
33 Email services • The service or link may only be provided through a global Internet network through the methods specified by the Commission
34 Network monitoring • All relevant regulations and instructions published by the Commission and other government agencies must be implemented and taken into account
35 Domain name registration service in accordance with governing laws and regulations
• Copies of the terms of use must be provided to subscribers
• The financial fee for services provided to subscribers as well as the features of the service must be clarified before he or she subscribes
• Technical support must be provided to subscribers around the clock
36 Online content publishing services
• When offering programs to subscribers, the service provider must comply with intellectual property provisions in accordance with the regulations governing such as well as any other relevant laws.
• Government websites may only be hosted on servers located within the Kingdom
37 Internet advertising services
• Accuracy must be taken into account with regard to using subscribers’ accounts and maintaining accounting information for one year
• Privacy for subscribers and their accounts must be ensured
• Third parties must refrain from engaging with user accounts and may not be informed of user PIN numbers
• Intellectual property rights must be adhered to
8786 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
No. Activity Special Terms and Regulations
Eighth: The Ministry of Culture and Information
38 Pre-printing services
• The license holder shall be responsible for any materials or photographs developed or adjusted in her headquarters or in another location which form a violation of the provisions of the statute and executive regulations.
• The license holder must prepare a unified contract form which contains the conditions agreed upon among the parties and which specifies the type of work agreed to be performed. A copy of the contract must be maintained in the contracts file.
• The license holder may not allow third parties to review others’ work.
39 Drawing and Calligraphy • The license holder must be responsible for any materials adjusted at the headquarters or any other location which are in violation of the provisions or regulations
• Care must be taken to maintain the linguistic authenticity and integrity of written material
• The permit shall be limited to drawing and calligraphy and may not include designing and making seals
40 Photography • The license holder is entitled to photograph events and celebrations through a written contract, taking care not to photograph those who do not wish to be photographed.
• Female party and event photographers must be Saudi nationals.
• Film drafts and photo originals are considered the property of their owners and must be returned to them.
• Self-imaging devices may only be located within the headquarters licensed by the Ministry.
• A freelance photographer must be a Saudi national and may not be younger than 17 years of age.
• The license must shall submit an application to the Ministry containing the name of the freelance photographer and her personal information including her identification, address, and two passport photos. The city in which she will be located must also be specified. The General Directorate of Publications will publish a stamped card for the photographer to hang around her chest. The card must be renewed annually.
• The license holder may not print or enlarge images for commercial purposes or for use in public places except after obtaining written approval from the General Directorate of Publications or one of its branches.
• Care must be taken not to display any photographs that are contrary to religious and moral values observed in the Kingdom.
• No personal photographs may be printed or enlarged except through the request or approval of the photograph’s owner. The photographs may not be displayed in public without approval from the owner, and it is prohibited to display normal or enlarged photographs of women.
• Film or cassette tape covers may not be displayed.
41 Advertising • The provisions and regulations for publishing advertisements or issuing commercial guides contained in the executive regulations must be taken into account.
• The license holder must prepare, design, and execute advertisements, obtain them ready-made from advertisers within the Kingdom or outside, or distribute them through advertising means according to an agreement.
• No unknown or anonymous media may be engaged with and is not allowed to be circulated within the Kingdom
• The license holder shall be responsible for the content of her advertisements within the Kingdom
No. Activity Special Terms and Regulations
42 Public relations • The fundamentals of practicing this activity shall be adhered to and no regulations which represent commercial, industrial, and administrative activities may be violated. No methods may be used which contradict the principles of Islamic Sharia or moral values.
• Contracts concluded with those wishing to utilize the license holder’s services must contain commitments on both sides as well as the type of service or assistance to be provided to the beneficiary.
• Cooperation may not take place with outside organizations operating within the field except after obtaining written approval from the Ministry for such.
43 Press services • Any obligations applied for other media activities shall be applied to the license holder.
• The General Directorate of Publications must be provided with the names of media outlets with which the license holder cooperates because they take great care to update this information as a priority, and the license holder must not cooperate with or brief foreign media outlets until she has obtained Ministry approval for such cooperation.
• The license holder is entitled to prepare investigations, press service files, and information and distribute these items to media outlets or their representatives or cooperate with them, but copies of these documents must be retained in a folder for each outlet.
• The license holder is entitled to receive representatives from the media outlets that she cooperates with after obtaining written, prior permission from the Ministry and she may provide these representatives with photography services, arrange press interviews, or visit public places.
• The license holder shall be considered responsible for publishing any false or biased information or investigations about the Kingdom or anything which harms relations between the Kingdom and other friendly countries and international organizations or bodies in media outlets that represent her, regardless of whether this information is published from her office.
• These outlets may not practice advertisement collection, subscription collection, distribution, or any other practices within the field of media activity except after obtaining a license to do so from the Ministry.
44 Producing, selling, or renting computer programs
• Producing, designing, and publishing computer programs with a general use, such as operational programs or those designated for issuing orders or producing results, or pilot or game programs through programmers working on the project or publishing for programmers or designers who do not work full-time and through a written agreement after receiving approval from the Ministry.
• Designing and preparing operational and administrative programs in accordance with certain specifications with the goal of allowing government or civil society entities to use the programs to later become their own. The license holder is not entitled to utilize this program and design it for another institution.
• Design and preparation of operational and administrative programs specialized for service activities or services with similar applications.
• Importing original games and programs produced outside of the Kingdom after obtaining written permission for each program from the General Directorate of Publications or one of its branches in accordance with regulatory procedures.
• Displaying and selling computers and original, wrapped game programs
• It is not permitted to display programs that are not authorized under regulations or programs with an unknown source.
• Containers holding films or audio materials may not be sold or displayed
• Purchase receipts for each program in the store must be kept, including the name of the distributor.
• No copying devices for programs may be used or owned.
• Computer games may not be rented.
8786 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
No. Activity Special Terms and Regulations
Eighth: The Ministry of Culture and Information
38 Pre-printing services
• The license holder shall be responsible for any materials or photographs developed or adjusted in her headquarters or in another location which form a violation of the provisions of the statute and executive regulations.
• The license holder must prepare a unified contract form which contains the conditions agreed upon among the parties and which specifies the type of work agreed to be performed. A copy of the contract must be maintained in the contracts file.
• The license holder may not allow third parties to review others’ work.
39 Drawing and Calligraphy • The license holder must be responsible for any materials adjusted at the headquarters or any other location which are in violation of the provisions or regulations
• Care must be taken to maintain the linguistic authenticity and integrity of written material
• The permit shall be limited to drawing and calligraphy and may not include designing and making seals
40 Photography • The license holder is entitled to photograph events and celebrations through a written contract, taking care not to photograph those who do not wish to be photographed.
• Female party and event photographers must be Saudi nationals.
• Film drafts and photo originals are considered the property of their owners and must be returned to them.
• Self-imaging devices may only be located within the headquarters licensed by the Ministry.
• A freelance photographer must be a Saudi national and may not be younger than 17 years of age.
• The license must shall submit an application to the Ministry containing the name of the freelance photographer and her personal information including her identification, address, and two passport photos. The city in which she will be located must also be specified. The General Directorate of Publications will publish a stamped card for the photographer to hang around her chest. The card must be renewed annually.
• The license holder may not print or enlarge images for commercial purposes or for use in public places except after obtaining written approval from the General Directorate of Publications or one of its branches.
• Care must be taken not to display any photographs that are contrary to religious and moral values observed in the Kingdom.
• No personal photographs may be printed or enlarged except through the request or approval of the photograph’s owner. The photographs may not be displayed in public without approval from the owner, and it is prohibited to display normal or enlarged photographs of women.
• Film or cassette tape covers may not be displayed.
41 Advertising • The provisions and regulations for publishing advertisements or issuing commercial guides contained in the executive regulations must be taken into account.
• The license holder must prepare, design, and execute advertisements, obtain them ready-made from advertisers within the Kingdom or outside, or distribute them through advertising means according to an agreement.
• No unknown or anonymous media may be engaged with and is not allowed to be circulated within the Kingdom
• The license holder shall be responsible for the content of her advertisements within the Kingdom
No. Activity Special Terms and Regulations
42 Public relations • The fundamentals of practicing this activity shall be adhered to and no regulations which represent commercial, industrial, and administrative activities may be violated. No methods may be used which contradict the principles of Islamic Sharia or moral values.
• Contracts concluded with those wishing to utilize the license holder’s services must contain commitments on both sides as well as the type of service or assistance to be provided to the beneficiary.
• Cooperation may not take place with outside organizations operating within the field except after obtaining written approval from the Ministry for such.
43 Press services • Any obligations applied for other media activities shall be applied to the license holder.
• The General Directorate of Publications must be provided with the names of media outlets with which the license holder cooperates because they take great care to update this information as a priority, and the license holder must not cooperate with or brief foreign media outlets until she has obtained Ministry approval for such cooperation.
• The license holder is entitled to prepare investigations, press service files, and information and distribute these items to media outlets or their representatives or cooperate with them, but copies of these documents must be retained in a folder for each outlet.
• The license holder is entitled to receive representatives from the media outlets that she cooperates with after obtaining written, prior permission from the Ministry and she may provide these representatives with photography services, arrange press interviews, or visit public places.
• The license holder shall be considered responsible for publishing any false or biased information or investigations about the Kingdom or anything which harms relations between the Kingdom and other friendly countries and international organizations or bodies in media outlets that represent her, regardless of whether this information is published from her office.
• These outlets may not practice advertisement collection, subscription collection, distribution, or any other practices within the field of media activity except after obtaining a license to do so from the Ministry.
44 Producing, selling, or renting computer programs
• Producing, designing, and publishing computer programs with a general use, such as operational programs or those designated for issuing orders or producing results, or pilot or game programs through programmers working on the project or publishing for programmers or designers who do not work full-time and through a written agreement after receiving approval from the Ministry.
• Designing and preparing operational and administrative programs in accordance with certain specifications with the goal of allowing government or civil society entities to use the programs to later become their own. The license holder is not entitled to utilize this program and design it for another institution.
• Design and preparation of operational and administrative programs specialized for service activities or services with similar applications.
• Importing original games and programs produced outside of the Kingdom after obtaining written permission for each program from the General Directorate of Publications or one of its branches in accordance with regulatory procedures.
• Displaying and selling computers and original, wrapped game programs
• It is not permitted to display programs that are not authorized under regulations or programs with an unknown source.
• Containers holding films or audio materials may not be sold or displayed
• Purchase receipts for each program in the store must be kept, including the name of the distributor.
• No copying devices for programs may be used or owned.
• Computer games may not be rented.
8988 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
No. Activity Special Terms and Regulations
45 Media advisory studies
• No studies or consultations which address social or cultural topics may be approved until the beneficiary obtains a letter from the Ministry.
• No statistics or surveys may be conducted until the regulatory measures contained in the executive regulations are completed.
• The license holder is responsible for any false information contained in studies she conducts or which contravene the regulations and instructions issued in the Kingdom.
• The license holder must have a register in which to record information about all studies and consultations prepared by beneficiaries. This register must include the advisor’s name, the name of the beneficiary, the entity to which the study will be presented, the date it is prepared and delivered, and other information. The register must be prepared for Ministry observers to look over when requested, and the office must maintain at least one copy of the study it conducted.
• When conducting field studies, the license holder must conduct the studies by virtue of a contract with the beneficiary entity, taking the following regulations into account:
- The questionnaire should not include questions which are incompatible with religion or the values and customs that prevail in the Kingdom, or personal or family questions.
- Marketing questionnaire questions must be shown to the General Directorate of Publications in order for them to be inspected. A statement of the goal of the survey and the number of copies that will be printed as well as the areas in which the survey will be conducted and the entity benefitting from the study must also be included.
- Research and studies must be conducted through a written questionnaire and cassettes or video images may not be used.
- The questionnaire must not be for a good or service that is not available in the Kingdom or for which advertising is forbidden, such as smoking or shisha.
• Approval must be obtained from the Ministry for all field studies.
46 Translation • A university degree in the source or target language.
• The license holder must obtain her official translation license from a certified translation office.
Source: The Council of Saudi Chambers (2014) “The executive program for the practicing work from home licensing project”
Appendix (2): The Sultanate of Oman: Application for License to Practice Individual Productive Work from Home
8988 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
No. Activity Special Terms and Regulations
45 Media advisory studies
• No studies or consultations which address social or cultural topics may be approved until the beneficiary obtains a letter from the Ministry.
• No statistics or surveys may be conducted until the regulatory measures contained in the executive regulations are completed.
• The license holder is responsible for any false information contained in studies she conducts or which contravene the regulations and instructions issued in the Kingdom.
• The license holder must have a register in which to record information about all studies and consultations prepared by beneficiaries. This register must include the advisor’s name, the name of the beneficiary, the entity to which the study will be presented, the date it is prepared and delivered, and other information. The register must be prepared for Ministry observers to look over when requested, and the office must maintain at least one copy of the study it conducted.
• When conducting field studies, the license holder must conduct the studies by virtue of a contract with the beneficiary entity, taking the following regulations into account:
- The questionnaire should not include questions which are incompatible with religion or the values and customs that prevail in the Kingdom, or personal or family questions.
- Marketing questionnaire questions must be shown to the General Directorate of Publications in order for them to be inspected. A statement of the goal of the survey and the number of copies that will be printed as well as the areas in which the survey will be conducted and the entity benefitting from the study must also be included.
- Research and studies must be conducted through a written questionnaire and cassettes or video images may not be used.
- The questionnaire must not be for a good or service that is not available in the Kingdom or for which advertising is forbidden, such as smoking or shisha.
• Approval must be obtained from the Ministry for all field studies.
46 Translation • A university degree in the source or target language.
• The license holder must obtain her official translation license from a certified translation office.
Source: The Council of Saudi Chambers (2014) “The executive program for the practicing work from home licensing project”
Appendix (2): The Sultanate of Oman: Application for License to Practice Individual Productive Work from Home
9190 A Study of International and Gulf Experiences in Developing Home-based Businesses A Study of International and Gulf Experiences in Developing Home-based Businesses
