SaaS business model offers a fantastic platform to service the world market, irrespective of the location of the customer. Unlike the traditional model, SaaS software is delivered over an internet, which means people can access the software from any part of the world.

This brings in an important question around Globalization and Localization support. Of course, your product should be globalized and localized in order to suit the region that you are planning to sell. But one needs to understand that this only technically qualifies your product to be used in other regions. Is it enough? Are there any other norms to be supported for specific regions?

While there is no global standard for these norms, certain regions requires you to adhere certain policies. One such policy is called the “Safe Harbor Policy”. European Union (EU) countries have formed a framework that governs the flow of data related to privacy information on individuals. This framework is referred to as Safe Harbor Policy. There are 2 versions of this framework

–          EU Safe Harbor Policy (a group of 26 countries)

–          Swiss Safe Harbor Policy (specific to Switzerland)

US organizations that are offering their product or deal with the data of people from EU/Swiss should comply with this framework. This framework contains 7 principles that should be adhered by the US organizations.


Organizations must notify individuals about the purposes for which they collect and use information about them. They must provide information about how individuals can contact the organization with any inquiries or complaints, the types of third parties to which it discloses the information and the choices and means the organization offers for limiting its use and disclosure.


Organizations must give individuals the opportunity to choose (opt out) whether their personal information will be disclosed to a third party or used for a purpose incompatible with the purpose for which it was originally collected or subsequently authorized by the individual. For sensitive information, affirmative or explicit (opt in) choice must be given if the information is to be disclosed to a third party or used for a purpose other than its original purpose or the purpose authorized subsequently by the individual.

Onward Transfer (Transfers to Third Parties)

To disclose information to a third party, organizations must apply the notice and choice principles. Where an organization wishes to transfer information to a third party that is acting as an agent, it may do so if it makes sure that the third party subscribes to the Safe Harbor Privacy Principles or is subject to the Directive or another adequacy finding. As an alternative, the organization can enter into a written agreement with such third party requiring that the third party provide at least the same level of privacy protection as is required by the relevant principles.


Individuals must have access to personal information about them that an organization holds and be able to correct, amend, or delete that information where it is inaccurate, except where the burden or expense of providing access would be disproportionate to the risks to the individual’s privacy in the case in question, or where the rights of persons other than the individual would be violated.


Organizations must take reasonable precautions to protect personal information from loss, misuse and unauthorized access, disclosure, alteration and destruction.

Data integrity

Personal information must be relevant for the purposes for which it is to be used. An organization should take reasonable steps to ensure that data is reliable for its intended use, accurate, complete, and current.


In order to ensure compliance with the safe harbor principles, there must be (a) readily available and affordable independent recourse mechanisms so that each individual’s complaints and disputes can be investigated and resolved and damages awarded where the applicable law or private sector initiatives so provide; (b) procedures for verifying that the commitments companies make to adhere to the safe harbor principles have been implemented; and (c) obligations to remedy problems arising out of a failure to comply with the principles. Sanctions must be sufficiently rigorous to ensure compliance by the organization. Organizations that fail to provide annual self certification letters will no longer appear in the list of participants and safe harbor benefits will no longer be assured.

As you can see, Safe Harbor Policy has an impact to both business and the product. Therefore, (US) organizations that plan to take their software to EU countries should accommodate this policy in their business/product planning.