The factor of "Processing by Entity Registered or Incorporated in Jurisdiction" is a significant determinant in defining the territorial scope of data protection laws. This factor is used to establish when entities incorporated, registered, or otherwise legally seated within a jurisdiction are subject to that jurisdiction's data protection regulations. It helps ensure that a country's data protection laws govern entities that have a legal presence within its borders, irrespective of where the actual data processing occurs.

Provision Examples

"ADGM DPR s.62(1) Definition of ‘Establishment’ in UAE - ADGM: ‘Establishment’ means any authority, body corporate, branch, representative office, institution entity, or project established, registered or licensed to operate or conduct any activity within the ADGM or exempt from being registered or licensed under the laws of the ADGM;"

"BVI DPA. Art. 4 (4)(b) in British Virgin Islands: (4) For the purposes of subsections (2) and (3), each of the following shall be treated as established in the Virgin Islands: a body incorporated under any written laws in the Virgin Islands;"

"DIFC DPL Art.6(3)(a) in UAE - DIFC: (3) This Law applies as follows: This Law applies to the Processing of Personal Data by a Controller or Processor incorporated in the DIFC, regardless of whether the Processing takes place in the DIFC or not."

"Federal PDPL Art.2(1)(b) in UAE Mainland: 1. The provisions of this Decree Law shall apply to the Processing of Personal Data, whether totally or partially, through automatically operated electronic systems or other means, by: any Controller or Processor located in the State who carries out the activities of Processing Personal Data of Data Subjects inside or outside the State."

"GDPR Art.3(1) in EU: 1. This Regulation applies to the processing of personal data in the context of the activities of an establishment of a controller or a processor in the Union, regardless of whether the processing takes place in the Union or not."

Description

The factor of "Processing by Entity Registered or Incorporated in Jurisdiction" is crucial in defining the jurisdictional reach of data protection laws. This factor is designed to ensure that entities that possess a formal legal presence within a jurisdiction are subject to its data protection rules, independent of the location of data processing activities. Legislators incorporate this factor to anchor jurisdiction over entities that benefit from the local legal and economic environment, ensuring compliance with local data protection standards.

1. Rationale: By extending the applicability of data protection laws to entities incorporated or registered within the jurisdiction, lawmakers aim to protect personal data handled by these entities. This provision helps in maintaining the integrity of the data protection framework within the jurisdiction by ensuring that businesses which are legally recognized under its laws are held accountable for their data processing activities, regardless of the geographical location of the processing.
2. Commonalities:
   • Broad Scope: Many jurisdictions, such as the EU under the GDPR, the UAE's DIFC, and the ADGM, deem the processing of personal data by entities incorporated within their jurisdiction as falling within the scope of their data protection laws ("regardless of whether the processing takes place in the jurisdiction or not").
   • Local Incorporation: Across various laws, there is a clear trend of setting the law's applicability concerning entities formally incorporated or established within the jurisdiction. For example, the BVI DPA and Malaysia PDPA list specific corporate formations like partnerships and unincorporated associations as falling within their scopes.
3. Different Approaches:
   • Explicit Mention: Jurisdictions like the ADGM and DIFC explicitly define the establishment and include detailed descriptions of what constitutes being registered or incorporated ("established, registered or licensed").
   • Implicit Coverage: Under regulations like the GDPR, the focus is on the presence of an establishment, thus covering a broad range of entities without specific designations.
   • Local and International Reach: Articles like Federal PDPL in UAE Mainland go further to include controllers or processors within the state, addressing data processing activities both inside and outside the state.

Implications

Applying the factor of "Processing by Entity Registered or Incorporated in Jurisdiction" significantly impacts how data protection laws govern business operations. For example, a company incorporated in the ADGM must comply with ADGM data protection laws even if its data processing operations occur abroad. The same holds for entities under the GDPR, where European regulations apply due to the entity's incorporation within any EU member state.

• Extensive Reach: Businesses incorporated within the jurisdiction must adhere to local data protection laws, impacting their global operations and emphasizing strict compliance standards across their processing activities.
• Regulatory Accountability: Entities cannot evade local data protection responsibilities based on geographical processing locations, preventing legal arbitrage.
• Business Context: Suppose a financial institution incorporated in DIFC operates client data processing centers in non-DIFC locations. Despite the physical location of data processing, DIFC's data protection laws would still apply, mandating compliance and potentially influencing operational strategies to align with DIFC requirements.

These illustrations underscore the essential role this factor plays in extending the jurisdictional reach of data protection laws, ensuring that entities benefiting from local incorporation are held accountable for their data processing activities globally.