Does an operator need to be domiciled in the country? Are there any restrictions on foreign ownership of telecoms operators?

Technology

Malta Small Flag Malta

The ECRA provides that any undertaking may be allowed to provide electronic communications services but prior to doing so, such prospective operator must notify the MCA of such intention by means of a notification. There are no restrictions on foreign ownership of telecoms operators.

Norway Small Flag Norway

An operator does not need to be domiciled within Norway. However, all operators subject to a duty of registration (see question 1) are required to have a Norwegian organisation number and a Norwegian postal address.

There are no restrictions on foreign ownership of telecommunication operators.

Turkey Small Flag Turkey

Yes, the operator must be domiciled in Turkey and must be incorporated in Turkey as a limited or joint stock company. There is no restriction on foreign ownership of telecoms operators, 100% shares of the local entity can be non-Turkish owned.

China Small Flag China

Foreign-fund telecoms operators are allowed to engaged in BTS and VATS in China through a Sino-foreign equity joint venture which is domiciled in China. According to the Provisions on the Administration of Foreign-fund Telecommunications Enterprises (2016 Revision), the foreign investment in a foreign-funded telecom enterprise which is engaged in BTS (exclusive radio paging services) shall not be more than 49%; the foreign investment in a foreign-funded telecom enterprise which is engaged in VATS (including radio paging business in BTS) shall not be more than 50%. Further, to fulfil China’s commitments to the WTO and to open up China’s telecoms industry, in 2015, the MIIT issued the Circular for Lifting Restrictions on the Foreign Equity Ratio for Online Data Processing and Transaction Processing Business to allow foreign investors to hold up to 100% equity interest in e-commerce operations nationwide in China. In the Opinions of MIIT and the Shanghai Municipal Government on Further Opening Up the Value-added Telecommunications Services in China, for app stores business, storage-forwarding business, call center services, domestic multiparty communications services and internet access services (providing access services for internet users), the foreign investment in Shanghai Free Trade Zone may be up to 100%; for domestic internet virtual private network (VPN) business, the foreign investment is subject to a 50% cap.

Some sectors of internet-related services are not open to foreign investment. In the negative list of the Catalogue for the Guidance of Foreign Investment Industries (2017 Revision), foreign investment is prohibited from engaging in internet news information services, network publication services, network video and audio programs services, internet culture operations (exclusive music) and internet public information distribution services.

Mexico Small Flag Mexico

For the provision of telecommunications and satellite communication services, foreign investment is allowed up to 100%, and up to 49% for broadcasting services. However, in the broadcasting sector, it shall be necessary for reciprocity to exist with the country in which the investor is incorporated.

In order to request a Concession or Authorization, the company has to be of Mexican nationality, meaning that it has to be incorporated according to Mexican laws. The corporate domicile of a Mexican company is always located in Mexico.

Notwithstanding with the aforementioned, there are some IFT’s criterion in which for certain activities a corporate domicile is not mandatory (e.g. authorization to install, operate and exploit transmitting satellite earth stations). However, criteria are issued on a case-by-case basis.

United Kingdom Small Flag United Kingdom

There are no requirements for a communications provider to be domiciled in the UK prior to or during the provision of services, and there are no foreign ownership restrictions.

That said, Ofcom does have the right to, amongst other things, revoke licences for the installation and use of wireless telegraphy equipment where necessary in the interests of national security. This could, theoretically, be used to restrict foreign ownership of certain telecoms operators, although this right is unlikely to be invoked.

Romania Small Flag Romania

The Romanian legislation in the sector of electronic communications does not require an operator to be established on the territory of Romania.

Under the Romanian legislation there are no foreign ownership restrictions with regard to telecom operators.

Italy Small Flag Italy

Any undertaking of a European Union, European Economic Area or WTO country can obtain a general authorisation for the provision of electronic communications services or networks in Italy. Electronic communication operators residing in countries other than the above can be granted authorisations only under reciprocity conditions (i.e. if the relevant home country would authorise an Italian operator to operate in such country for the same type of service).

The Netherlands Small Flag The Netherlands

From a telecoms regulatory perspective, there are no requirements for a communications provider to be domiciled in the Netherlands prior to or during the provision of services, and there are no foreign ownership restrictions.

Brazil Small Flag Brazil

Yes. Under Decree No. 2617/1998, any Brazilian telecommunications operating entity has to be (i) incorporated and headquartered in Brazil, and (ii) controlled by another Brazilian entity, also headquartered in Brazil. Despite, there are no foreign ownership restrictions in the telecommunications sector, except for radio and TV broadcasting, where foreign capital is limited to 30% of the company´s total and voting capital.

Indonesia Small Flag Indonesia

Yes, telecoms operators need to be in the form of an entity domiciled in Indonesia in order to conduct business. There is a foreign ownership restriction of 67% for telecoms operators, i.e.:

  1. fixed telecommunication network provider;
  2. moving telecommunication network provider;
  3. service-integrated telecommunication network provider;
  4. telecommunication content service provider;
  5. information service (call centre) and other value-added telephone service provider;
  6. internet service provider;
  7. data communication system provider;
  8. internet telephone provider (for public purposes); and
  9. internet interconnection services (NAP) and other multimedia services.

India Small Flag India

Any entity that seeks to obtain a license / seek registration from DoT must be a company registered under the (Indian) Companies Act, 1956 or Companies Act, 2013. The license agreement executed between the Government of India (DoT) and a service provider in relation to licenses/registrations clearly provides that the licensee must be an entity incorporated in India. The Foreign Direct Investment (“FDI”) policy of India published by the Department of Industrial Policy and Promotion under the Ministry of Commerce and Industry, stipulates the maximum permissible foreign investment in Indian companies in various sectors. As per the currently applicable FDI policy, Indian companies with 100% foreign investment can provide telecommunication or telecom infrastructure service, provided that only the first 49% of foreign investment is under the automatic route (i.e., without the prior approval of Government of India), whereas any additional foreign investment would need prior permission of the concerned administrative department/Ministry. Teleports, DTH, cable networks, mobile TV and Headend-in-the Sky broadcasting services have all been opened up to 100% FDI under the automatic route. However, where there is infusion of fresh foreign investment beyond 49% resulting in a change of ownership or transfer of stake in favour of a new foreign investor, and the Indian company not seeking any license or permission from the Government, such investment will be under the Government approval route. Companies that provide call centre services and require OSP registration are permitted to receive 100% FDI under the automatic route. Companies that publish newspapers and periodicals dealing with news and current affairs can receive up to 26% foreign investment, only with prior Government approval. Companies that are in the business of terrestrial broadcasting network and up-linking of ‘News & Current Affairs’ TV Channels, may have only up to 49% foreign investment, which can be made only with prior Government approval. Further, the license agreement executed between the Government of India and a service provider may contain additional conditions in relation to foreign ownership, investment and control, which the Indian company will need to adhere to.

Israel Small Flag Israel

In general, a telecommunication operator must be domiciled in Israel. Such requirement may be imposed by law - mainly the Communications Law (Telecommunications and Broadcasting), 5742-1982 ("Bezeq Law"), which requires cable and satellite operators to be domiciled in Israel - or by the license terms (e.g., cellular providers). In addition, in several cases the law or license terms may dictate a minimum Israeli ownership in a telecommunication operator. For example, a national news provider must be domiciled in Israel; the CEO and a majority of the members of the board must be Israeli citizens; and foreign citizens may not hold more than a third of such corporation. The Bezeq Law imposes additional restrictions on foreign ownership of telecommunication companies that are deemed an "Essential Service".

Singapore Small Flag Singapore

In order to apply for an FBO or SBO licence, the applicant must be a company incorporated in Singapore.

A Singapore incorporated company may be wholly owned by a foreign entity and therefore there is no restriction on foreign ownership for telecom licensees.

France Small Flag France

An operator is not required to be domiciled in France (i.e. to create a subsidiary, register a branch, or else) in order to operate a network or provide communications services in the country. Only the declaration or authorization requirement described in Question 1 above will apply.

Pursuant to France’s international commitments there are no legal restrictions on foreign ownership of operators. More generally, under EU directives each EU Member State must make sure that access to its telecom market is not unduly restricted.

In this area, the ministry in charge of electronic communications and the ARCEP must yet ensure that equivalence of treatment is respected regarding outbound as well as inbound traffic, including as concerns conditions of access to foreign networks.

Germany Small Flag Germany

An operator is not required to be domiciled in Germany. But a domestic representative is requested.

Switzerland Small Flag Switzerland

Generally, no restrictions apply to operators not domiciled in Switzerland or companies owning interests in the electronic communications market in Switzerland. However, subject to any international obligations to the contrary, ComCom may refuse to grant a license to use the radio frequency spectrum to foreign-incorporated companies unless reciprocal rights are granted to Swiss companies under the relevant foreign laws. Foreign TSPs obtaining contractual access to the network services of a TSP in Switzerland enter the market as Mobile Virtual Network Operators (MVNOs). MVNOs do not need an operation licence as their network is based on the transmission frequencies of the licenced operators. In Switzerland, there are three suppliers of mobile network infrastructure and several MVNOs.

Ecuador Small Flag Ecuador

The Telecommunications Law sets forth that licenses for the provision of telecommunications services, use or operation of the radio spectrum, and establishment and operation of telecommunications networks can only be granted to natural persons residing or legal persons domiciled in Ecuador that meet all the technical, economic and legal requirements specified in said Law, its Rules and the Regulation to Grant Licenses issued by the Telecommunications Regulatory and Control Agency.

Foreign legal persons providers of services, including state owned companies of countries that form part of the international community, must be likewise domiciled in Ecuador in order to obtain the respective licenses.

In line with the above, the Company Law in its article 6 mandates that if the activities that a foreign company is going to perform involve the provision of public services such as the provision of telecommunications services, it will be under the obligation to domicile itself in the Republic of Ecuador.

Updated: September 14, 2017