Your Snapshot of Key Legal Developments in Asia
Issue 4 - Oct/Nov/Dec 2016
- MLVT Increases the Minimum Wage For 2017
- MEF Exempts Workers’/Employees' Allowances from Tax on Salary and Tax on Fringe Benefits
- MOC Sets Procedure for International Registration of Trademarks in Cambodia under Madrid Protocol
- 10% of Loan Portfolio Must be in Khmer Riel by End of December 2019
- Tax Compliance Regulations Introduced for Multi-activity Enterprises
- Personal Data Protection Regime Gets Boost with New Regulation
- Electronic Information & Transactions Law Gets Makeover
- Constitutional Court OKs Private Sector Role in Electricity Sector Subject to Conditions
- Constitutional Court Legalizes Post-Nuptial Agreements but Upholds Discriminatory Provisions of Agrarian Law
- Government Cuts Income Tax on Real Estate Transfers to REITs to 0.5%
- Digital Free Zone
- Amendment to the Town and Country Planning Act 1976
- Amendment to the National Land Code 1965 and the Land Acquisition Act 1960
- US Sanctions Lifted
- New Myanmar Investment Law Enacted
- Ministry of Commerce Notification Nos. 85/2016 and 86/2016
- Full Convergence with IFRS in 2018 for Singapore-Listed Companies
- Retrenchment Notification Mandatory from 1 January 2017
- Revised CCS Guidelines With Effect From 1 December 2016
- Proposed Amendments to the Companies Act
MLVT Increases the Minimum Wage For 2017On 29 September 2016, the Ministry of Labour and Vocational Training ("MLVT") issued Prakas No. 414 on the increase in the minimum wage for year 2017. This Prakas is an update to the previous Prakas No. 409/15 on the minimum wage for year 2016.
Starting from 1 January 2017, the minimum wage for workers or employees in the textile, garment and footwear industry has increased by US$5. Therefore, the current minimum wage is US$153 per month. For workers or employees serving a probation period, the minimum wage is US$148 per month. This will be increased to US$153 per month after the probation period.
The minimum wage for these sectors is revised every year in accordance with the principle and mechanism agreed to between three parties: employers's representatives, employees' representatives and government's representatives. However, the level of any minimum wage for other sectors besides textile, garment and footwear industries has yet to be determined.
MEF Exempts Workers’/Employees' Allowances from Tax on Salary and Tax on Fringe BenefitsThe Ministry of Economy and Finance ("MEF") has issued new Circular No. 011 dated 6 October 2016 on the Implementation of Obligation to Withhold Tax on Fringe Benefits. This Circular is a replacement to Circular No. 002 dated 20 January 2015 on the Implementation of Obligation to Withhold Tax on Salary and Tax on Fringe Benefits.
Based on this new Circular, many benefits that workers/employees receive from their work shall be exempt from tax on salary and shall not be subject to tax on fringe benefits. In implementing this, all factories and enterprises are required to submit their policy or any documents related to allowances and benefits for workers/employees for each specific period of time to the General Department of Taxation.
The preceding Circular 002 encompassed equivalent exemptions, but was generally presumed to be limited to factory employees/workers. Circular No. 011 expressly provides that the employee allowances and benefits apply to "workers and employees of all factories or enterprises", thus embracing all sectors.
MOC Sets Procedure for International Registration of Trademarks in Cambodia under Madrid ProtocolOn 1 November 2016, a new Prakas No. 368 was issued to implement the procedures for international registration of trademarks under the Madrid Protocol with the Department of Intellectual Property ("DIP") of the Ministry of Commerce.
To register the international registration of trademarks under the Madrid protocol, the applicant must have a Cambodian nationality, a permanent residence or have an industrial or commercial establishment in Cambodia. The application must, at minimum, have the name, address and any related information of the representative of the trademark owner if the brand model is qualified under the requirements. The application form and any references or related documents for the international registration of trademarks shall be in English. The application form is available on: www.cambodiaip.gov.kh. The application will be examined by the DIP. The DIP will notify the International Office on its provisional refusal, acceptance or any invalidation of the application. The applicant is required to respond to the provisional refusal in accordance with Cambodian law and regulations. Furthermore, this Prakas also allows the owner to request for the replacement and transformation of a national registration into international registration under the Madrid Protocol or vice versa.
However, whether the mark was registered with international or national filing, any letter certifying the use or non-use of such registered marks must be submitted to the DIP within one year after the fifth anniversary of the date of registration or renewal of protection period. Upon failure to do so, the registration will be not protected in Cambodia and licenses recorded with the International Office will not be enforceable against any third party in Cambodia.
10% of Loan Portfolio Must be in Khmer Riel by End of December 2019On 1 December 2016, the National Bank of Cambodia ("NBC") issued a new Prakas to promote credit provision in national currency by requiring all banks and financial institutions under its supervision to have at least 10% (ten per cent) of their total loan portfolio provided in Khmer Riel. The final deadline for full compliance by all banks and financial institutions was 31 December 2019.
The main objective of the Prakas is to enhance the usage of Khmer Riel in the economy as a mechanism to support the implementation of the national monetary policy by the central bank. Under the Prakas, NBC also reserves the right to further increase the required portion of credit provision in local currency based on future need.
Tax Compliance Regulations Introduced for Multi-activity EnterprisesThe Ministry of Economy and Finance ("MEF") has issued a Prakas No. 1127 dated 11 October 2016 to provide updated requirements for enterprises in Cambodia that carry out multiple business activities including one or more Qualified Investment Projects ("QIP").
This Prakas applies to any of the following:
- Enterprises in Cambodia that contain more than one QIP ("Multi-QIP");
- Enterprises in Cambodia that carry out more than one business activity - where those business activities are subject to different rates of Tax on Profit ("Multi-Non-QIP"); or
- Enterprises in Cambodia which carry out both a QIP and non-QIP business activity ("Mixed-QIP's").
The above three types of enterprises are required to register each of their business activities separately with the General Department of Taxation ("GDT") within 15 days of commencing economic activity, and obtain a VAT Tax Identification Number ("VAT TIN") for each business activity.
Tax Obligations and Accounting Records
Any of the above three types of enterprises are required to:
- Obtain a corresponding patent tax certificate for each business activity that it carries out;
- Maintain clearly distinguishable investment capital, assets, liabilities, employees/worker, managers and other financial information for each business activity which is carried out by the enterprise;
- Maintain separate accounting records and separate income and expenditure on an individual business activity basis;
- Use correct VAT TIN for each business activity that involves import/export or purchases/sales of domestic goods/services;
- Prepare purchases and sales records and record VAT input and output for each business activity; and
- Submit separate monthly and annual tax returns for each registered business activity.
The Prakas does not apply to:
- Multi-QIP's that receive approval from the Council for the Development of Cambodia ("CDC") at the same time and whose Tax on Profit ("TOP") exemption starts and ends at the same time;
- Enterprises that carry out more than one business activity (that are not QIP) where those business activities are subject to the same TOP rate; and
- Business activities in Cambodia (QIP or non-QIP) that are registered in separate legal entities.
A Claim for VAT Input CreditThe General Department of Taxation ("GDT") of the Ministry of Economy and Finance has issued an Instruction No. 21406 GDT dated 20 December 2016 on the claim for Value Added Tax ("VAT") input credit.
To claim for VAT input credit for purchases of goods or services, taxpayers shall, while filing a monthly tax return, attach therewith a copy of correct invoices issued by sellers or suppliers in a form as prescribed in Instruction No. 1127 GDT dated 26 January 2016 on the use of invoices for taxpayers under Self-Assessment System.
Any enterprises that have not yet completed the tax information update at the GDT will be temporarily not allowed to claim for VAT input credit or VAT refund until the enterprises finish the tax information update with the GDT.
This Instruction also mentions that the non-issuance or issuance of incorrect invoices will be considered to be an obstruction of the implementation of tax provision and shall result in a temporary closure of the business, a tax assessment or a fine of 10 million Khmer Riels (approximate to US$2,500) or imprisonment of up to 1 year or both.
Implementation of Tax on Salary ChangesWith reference to the 2017 Law on Financial Management on changes to the monthly Tax on Salary bands and the dependents reduction that employees may be eligible for, the Ministry of Economy and Finance issued Instruction No. 017 dated 27 December 2016 providing a summary and working examples of how these changes will be implemented.
Per Instruction No. 017, as from 1 January 2017 all resident enterprises including government institutions, organisations and other enterprises have an obligation to withhold and pay the Tax on Salary for resident employees as below:
Monthly salary in Khmer Riel
Monthly salary Approx. USD equivalent
0 - 1,000,000
0 - 250
1,000,001 - 1,500,000
250 - 375
1,500,001 - 8,500,000
375 - 2,125
8,500,001 - 12,500,000
2,125 - 3,125
To reduce the poverty for government officers, teachers, doctors/nurses, employees and factory workers, Instruction No. 017 doubles the reduction on tax base for minor dependent children and housewife/househusband to KHR 150,000 (approximately US$38) per month from KHR 75,000 (approximately US$19).
Instruction No. 017 is effective for salary payments for the month of January 2017 onwards.
Extension of Due Date for Monthly Tax ReturnsThe Ministry of Economy and Finance issued on 23 December 2016 Prakas No. 1539 concerning the amendment of the due date for filing monthly tax returns and making related tax payments. Under Prakas No. 1539, the due date for monthly tax returns and payments has been changed to the 20th day of the following month for the following tax returns:
- Prepayment of profit tax;
- Tax on salary;
- Withholding tax;
- Value Added Tax;
- Specific tax on certain merchandises and services;
- Accommodation tax; and
- Public lighting tax
Prakas No. 1539 came into operation on 23 December 2016.
China's Supreme People's Court Passes New Judicial Interpretations on the PRC Company LawThe Supreme People's Court of the People's Republic of China ("PRC") issued the Provisions on Several Issues Concerning the Application of the PRC Company Law (IV) (Draft for Public Consultation) (最高人民法院关于适用《中华人民共和国公司法》若干问题的规定（四）（征求意见稿）) ("Judicial Interpretation IV") on 12 April 2016 and passed the same on 5 December 2016 in principle. Judicial Interpretation IV provides further guidance on issues relating to validity of the resolutions issued by the shareholders and directors, shareholders' right of information, shareholders' right of requesting profit distribution, shareholders' pre-emptive rights of purchasing equity interests, company's direct action and shareholder's derivative action under the PRC Company Law, which was amended in 2013.
Click here to read our client update that provides a summary and analysis of Judicial Interpretation IV.
Personal Data Protection Regime Gets Boost with New RegulationAfter a wait of more than a year, the Minister of Communications and Information issued Regulation No. 20 of 2016 on the Protection of Personal Data in Electronic Systems ("PDP Regulation") on 1 December 2016. The PDP Regulation, which puts into effect Article 15(3) of Government Regulation No. 82 of 2012 on Electronic Systems and Transactions, sets out the rules governing the protection of personal data that are stored in electronic form.
Click here to read our client update.
Electronic Information & Transactions Law Gets MakeoverThe House of Representatives recently enacted a number of important amendments to the Electronic Information and Transactions Law 2008, which has been a source of considerable controversy since it was first placed on the statute books. The amendments address five principal issues: (i) Cyber defamation; (ii) Right to be Forgotten or Right of Erasure; (iii) Admissibility of electronic evidence; (iv) Government supervision; and (v) Investigation of Suspected Offences.
Click here to read our client update discussing these five issues in some detail.
Constitutional Court OKs Private Sector Role in Electricity Sector Subject to ConditionsOn 14 December 2016, the Constitutional Court once again ruled on the constitutionality of the Electricity Law. The Court's ruling came in response to a petition brought by two employees of PT PLN (Persero), the state electricity utility, in their capacities as labor union representatives. This Update provides a summary and analysis of the Court's decision.
Click here to read our client update.
Constitutional Court Legalizes Post-Nuptial Agreements but Upholds Discriminatory Provisions of Agrarian LawIn a landmark decision (the "Decision") handed down by the full bench of nine justices of the Constitutional Court, the Court amended certain provisions of the Marriage Law so as to recognize the validity of post-nuptial agreements for the first time in Indonesia, while simultaneously upholding a number of provisions of the Agrarian Law that abrogate the rights of Indonesian citizens in transnational marriages to hold Hak Milik (the Indonesian equivalent of freehold) and other real property rights that are prohibited to non-Indonesians.
Click here to read our client update on this.
Government Cuts Income Tax on Real Estate Transfers to REITs to 0.5%Further to the Government's eleventh economic stimulus package, which was launched on 29 March 2016, a new Government Regulation was issued on 17 October 2016 (the "New Regulation") to reduce the income tax chargeable on the transfer of real estate to a designated Collective Investment Contract (Kontrak Investasi Kolektif / "KIK") focused on real estate (the Indonesian equivalent of the real estate investment trust / "REIT") to 0.5% final tax from the previous normal income tax rate of 25% for corporate transferors or progressive tax of up to a maximum of 30% for individual transferors.
Click here to read our client update.
New Trademark Law EnactedLaw No. 20 of 2016 on Trademarks and Geographical Indications came into effect on 25 November 2016. The key features of the new legislation may be summarized as follows:
- Revises the definition of trademarks to incorporate three new non-traditional trademark elements: three-dimensional logos or pictures, sounds and holograms.
- Sets out a new definition of "geographical indication" as any information that indicates a product's place of origin and/or how various geographical factors which relate to this place of origin have contributed to the particular characteristics, reputation and quality of the product in question (specifically elements which derive from nature, culture or a combination of both).
- Revises a number of provisions which relate to the registration of trademarks, including: 1) All registration applications must now be submitted to the Ministry of Law and Human Rights (instead of to the Directorate General of Intellectual Property Rights) either via the online system or manually; 2) Such applications must include information on the classification of the registered products; 3) Re-examination procedures have now been eliminated from the registration process.
Private Undertakings Permitted to Develop Oil RefineriesMinistry of Energy and Mineral Resources Regulation No. 35 of 2016, which entered into force on 11 November 2016, allows private companies to develop domestic oil refineries. Fuel that is produced by such refineries must be prioritized for domestic needs first. However, it may be sold directly to domestic end users, provided that the private company in question first secures a General Trading License (Izin Usaha Niaga Umum).
New Ministry of Trade Regulation Sets out Rules on Imports of Iron, Steel and Related ProductsMinistry of Trade Regulation No. 82/M-DAG/PER/12/2016, which is effective from 1 January 2017 to 31 December 2019, sets out the types of iron, steel, alloy steel and other derivative products thatn can be imported to Indonesia, as listed in the Appendix to the regulation.
Importers of such products are required to secure import approval from the Ministry by submitting an application to the Director General of Foreign Trade.
Land and Building Tax Exemptions for Geothermal Businesses during Exploration StageMinistry of Finance Regulation No. 172/PMK.010/2016, which entered into force on 14 November 2016, provides 100% exemptions from Land-and-Building Tax during the exploration stage of geothermal operations for geothermal businesses that they satisfy the following criteria: 1) are in possession of a valid geothermal license that was issued after Law No. 21 of 2014 on Geothermal Activities came into force; 2) have submitted a Taxable Object Notification (Surat Pemeritahuan Objek Pajak/SPOP) and; 3) have enclosed a recommendation from the Ministry of Energy and Mineral Resources confirming that the business is still in the exploration stages.
Such exemptions are valid for five years upon the issuance of a business license and may be extended for two more years, provided that the business in question is still at the exploration stage.
Rules Governing Transportation Management Services AmendedMinistry of Transportation Regulation No. PM 130 of 2016, which entered into force on 18 October 2016, amends Ministry of Transportation Regulation No. PM 74 of 2015 on the Organization and Operation of Transportation-Management Services. The key changes are as follows:
- Reduces the minimum authorized-capital requirement for the establishment of transportation-management service companies from IDR 25 billion to IDR 2 million.
- Reduces the minimum-investment requirement for the establishment of joint-venture transportation-management service companies through foreign direct investment (FDI) schemes from USD 10 million to USD 4 million.
Laos Amends its Investment Law; Shortens Concession PeriodThe draft amendment to the Investment Promotion Law ("Law"), which was passed by the Lao National Assembly ("NA") on 21 November 2016, shortens the investment concession period from 99 years to 50 years to ensure closer scrutiny of investors' operations. It must be noted, however, that the 50-year period is not cast in stone, as an investment project concession may be extended beyond 50 years if the Government deems it necessary under the circumstances.
The newly-added Article 40 in the Law sets out the criteria that will enable an investor to transfer its investment projects or businesses to minimize the problems that may arise when an investor decides to sell an investment project for which it has been granted a concession.
In an attempt to encourage investment in rural communities, the amended Law also specifies three incentive levels. For example, investors in education, health and agriculture in areas of extreme hardship will be granted the maximum profit tax exemption of up to 10 years or more. Different levels of hardship and fields of investment will attract different incentives.
In an effort to improve the way of doing business in Laos, the amended Law has defined the structures of the central and provincial Investment Promotion and Management Committees. The objective is to have a one-stop service channel to oversee investment affairs.
Overall, the measures, regulations and principles defined in the amended Law are aimed at promoting and regulating investment in the country, administering the investment process in a transparent manner, and protecting the investors.
The Law comprises 13 parts, 17 chapters and 106 articles.
Digital Free ZoneThe Prime Minister of Malaysia, Dato' Sri Najib Razak, has, in the 2017 Budget Speech, announced that the Government of Malaysia will introduce the first Digital Free Zone ("DFZ") in the world. The DFZ will "merge physical and virtual zones, with additional online and digital services to facilitate international e-commerce and invigorate internet based innovation". Although there is no publicly available information yet on the DFZ, the Minister in the Prime Minister’s Department in charge of the Economic Planning Unit, Datuk Rahman Dahlan, has explained that the DFZ concept would mirror the existing Free Trade Zone where businesses were given incentives, including tax exemptions. An attractive package is being formulated for the DFZ to encourage people to join Malaysia’ e-commerce sector and will reportedly be launched later this year.
Amendment to the Town and Country Planning Act 1976In October of 2016, the Town and Country Planning Bill 2016 ("Bill") was tabled for debate in the Dewan Rakyat of Malaysia and passed by block voting. While the Bill only contains 3 clauses, it was reportedly preceded by heated debates. The concern was on the proposed Section 20B(1) which introduces a duty on every Federal Government and State Government department or agency (except in Sabah and Sarawak) to seek advice from the National Physical Planning Council ("NPPC") on a development proposal relating to any coastal reclamation excluding reclamation for the construction of a jetty or beach rehabilitation, and construction of a major national infrastructure including airports, seaports, inland ports, railway transportation networks, highways, power stations, dams and toxic waste disposal sites, and other infrastructure of national interest as determined by the NPPC.
This proposed Section 20B(1) raised concerns because Section 1(3) of the Town and Country Planning Act 1976 ("Act") empowers the State Authority to bring the Act into operation in any manner the State Authority thinks most advantageous, convenient, expedient or practicable. Further, the State Authority may declare that a provision of the Act does not apply to an area or any part of the area of a local planning authority. The primary argument during the parliamentary debate was that each State Government still has the authority to decide whether it wishes the provisions of the Bill to apply to it, thus potentially rendering the Bill ineffective at law if not adopted by a State Authority and/or having the law apply unequally throughout Malaysia.
Amendment to the National Land Code 1965 and the Land Acquisition Act 1960The National Land Code (Amendment) Act 2016 ("NLC(A)2016") and the Land Acquisition (Amendment) Act 2016 ("LAA(A)2016") have been passed by Parliament, and was published in the Federal Gazette on 9 September 2016. Generally, the amendments are aimed at rationalizing the laws to address current needs in land development. Some of the main changes brought about by NLC(A)2016 and LAA(A)2016 are summarised below.
One of the main changes to the National Land Code 1965 ("NLC") under the NLC(A)2016 are the amendments made to Sections 433B, 433E and 433H of the NLC. Prior to the amendment of Section 433B(1) of the NLC, non-citizens of Malaysia and foreign companies were restricted from dealing with land under the category of "agriculture" or "building" save with the approval of the State Authority. The amended Sections 433B, 433E and 433H of the NLC now extend this restriction to lands under the category of "industry". This amendment appears to be inconsistent with the Government's long standing position of allowing 100% foreign ownership in manufacturing companies, and is a step backwards in the Government's recent efforts to liberalise the Malaysian economy.
NLC(A)2016 has also been criticized for not establishing a centralized database controlling all land titles in Malaysia. Presently, there are two types of land titles in Malaysia, namely the Registry Titles and the Land Office Titles. The NLC (unamended) requires instruments of dealing relating to land held under Land Office Titles to be presented at the respective Land Office. On the other hand, instruments of dealing relating to land held under Registry Titles are to be presented at the respective Registry Title office. The current institutional framework leads to the creation of "numerous land register databases at State level" which hinders the implementation of an effective electronic land administration system nationally. A centralized database was in fact one of the several reform proposals recommended in the consultation paper issued by the Director General of Land and Mines but, unfortunately, the proposal was not incorporated in the NLC(A)2016.
The LAA(A)2016 expands the ambit of the Land Acquisition Act 1960 ("LAA") to include compulsory acquisition of sub-divided buildings (parcels or provisional blocks) and underground land which currently only expressly addresses compulsory of land on the earth's surface. Besides that, in respect of temporary occupation or use of land under the LAA, the LAA(A)2016 introduces amendments to Section 60 of the LAA allowing land owners or lessees to object if aggrieved with the compensation offered by the Land Administrator and to refer their dispute to the Court. This is significantly different from the present wordings of Section 60 of the LAA and arguably bring more fairness compared to the present position under the Section 60 of the LAA, as the amendments now clarifies the position in law that aggrieved land owners are allowed to refer their dispute to Court.
US Sanctions LiftedOn 7 October 2016, former US president, Barack Obama, signed an Executive Order terminating the existing US economic and financial sanctions administered by the Department of the Treasury's Office of Foreign Assets Control ("OFAC") against Myanmar. The lifting of US sanctions followed President Obama's visit to Myanmar and meeting with State Counsellor Daw Aung San Suu Kyi in September 2016, and the historic elections in November 2015 that resulted in the National League for Democracy winning a supermajority of the seats in the Myanmar Parliament. US companies are no longer subject to OFAC-administered restrictions regarding banking and financial transactions in Myanmar, and all individuals and entities previously blocked under the Burmese Sanctions Regulations (i.e. carrying the "BURMA" tag) have now been removed from OFAC's Specially Designated Nationals and Blocked Persons List, which paves the way for greater freedom for US and US-related companies to invest in Myanmar.
New Myanmar Investment Law EnactedThe long-awaited Myanmar Investment Law 2016 ("MIL") was finally enacted on 18 October 2016. The new MIL replaces the former Myanmar Citizens Investment Law 2013 and the Foreign Investment Law 2016 ("FIL"), and one of the key changes is the introduction of a new fast-track "Endorsement" route which allows investors in non-restricted industries to apply for various incentives at the Myanmar Investment Commission in relation to their intended investments.
Another noteworthy change is the introduction of a tiered tax incentive system where the maximum period of income tax exemption granted will depend on the location of the proposed investment (i.e. 7-year exemption for investments in the least developed zones and 3-year exemption for investments in more developed zones in Myanmar). Previously, a blanket 5-year income tax exemption was granted under the FIL. While the enactment of a consolidated MIL is certainly a step in the right direction, investors are eagerly awaiting the release of the implementing rules to accompany the new MIL, which will set out further details of how the MIL will be implemented, such as an updated list of restricted industries, the application process for the new fast-track "Endorsement" route and the designation of investment zones for the purposes of tax exemptions. The draft of the first set of implementing rules have been released and are expected to be finalised and enacted in the coming months.
Ministry of Commerce Notification Nos. 85/2016 and 86/2016As a matter of general policy, the Myanmar Ministry of Commerce ("MOC") does not allow foreign entities to engage in import and distribution or sale of finished products in Myanmar (i.e. trading). However, the Myanmar Government has been gradually introducing certain exceptions to this general rule as it looks to liberalise this trading ban. In August 2016, the MOC issued a list of goods exempted from import licensing requirements.
On 20 December 2016 the MOC issued two further notifications to further liberalise the trading ban. MOC Notification 85/2016 allows foreign joint venture companies to import 69 types of hospital equipment and 461 types of construction materials identified by their respective HS codes. MOC Notification 86/2016 added another 150 types of goods, including coffee, wood pulp and railway coaches, to the list of goods exempted from import licensing requirements.
Full Convergence with IFRS in 2018 for Singapore-Listed CompaniesThe Singapore Accounting Standards Council reminded Singapore-incorporated companies listed on the Singapore Exchange that a new financial reporting framework, identical to the International Financial Reporting Standards, will apply for annual periods starting on or after 1 January 2018. Other Singapore-incorporated companies can continue to apply the existing financial reporting frameworks, including the Singapore Financial Reporting Standards, or may elect to apply the new framework.
Click here to read our update on this.
Retrenchment Notification Mandatory from 1 January 2017With effect from 1 January 2017, it will be mandatory for Singapore businesses that employ more than 10 employees to notify the Ministry of Manpower if they retrench more than 5 employees within any 6-month period commencing on 1 January 2017. Failure to do will constitute an offence. Such notification must be made within 5 working days of the 5th employee being retrenched and must set out details of the affected employees. This is the latest measure put in place by the Singapore government to ensure that redundancy exercises are carried out in a responsible manner and the needs of affected employees are taken into consideration.
Click here to read our update on this.
Revised CCS Guidelines With Effect From 1 December 2016Various revised Competition Commission of Singapore ("CCS") Guidelines came into force on 1 December 2016. On 1 November 2016, CCS announced that it had finalised its amendments to various guidelines and that the revised CCS Guidelines would come into force on 1 December 2016. The announcement marked the conclusion of the first major overhaul of most, if not all, of the CCS' Guidelines since the Competition Act came into force on 1 January 2006.
Click here to read our update on the revised CCS Guidelines.
Proposed Amendments to the Companies ActSeveral legislative amendments are being proposed to the Companies Act to (i) strengthen Singapore as an international centre for debt restructuring; (ii) introduce an inward re-domiciliation regime in Singapore and (iii) reduce the regulatory burden and increase transparency of companies in Singapore. The proposed amendments to the Companies Act were introduced over three public consultations conducted between October and December 2016, and will be incorporated into a single Companies (Amendment) Bill 2017.
Click the links above to read our updates on each of the public consultations.
New Maritime and Shipping RegulationsOn 29 November 2016, the Government issued Decree No. 160/2016/ND-CP on conditions for maritime transportation services, shipping agency services, and shipping towage services ("Decree 160") which shall take effect from 1 July 2017 (replacing Decree No. 30/2014/ND-CP on the same subject). The Decree 160 confirms the limitation of foreign ownership to 49% in companies engaging in domestic maritime transportation services, shipping agency services or shipping towage services as committed in Vietnam's WTO Commitments.
Decree 160 also introduces new conditions for operating the aforementioned services, for example:
- maritime transportation services companies have to obtain a bank guarantee with a minimum value of VND 5 billion or VND 500 million to guarantee the ship owner's obligation to its crews in relation to international maritime transportation, or domestic maritime transportation, respectively; and
- shipping towage services companies can use foreign-flag towing vessels to provide the service in Vietnam if Vietnam-flag towing vessels have not met conditions to do this service (the Ministry of Transportation will inform the capacity of Vietnam-flag towing vessels annually).
New List of Conditional Business LinesOn 22 November 2016, after much debate, the National Assembly of Vietnam adopted Law No.03/2016/QH14 to modify, supplement, and categorise the list of conditional business lines issued under the Law on Investment 2014.
The issuance of the list of conditional business lines was a solution by the legislators of Vietnam to limit the powers of the authorities from issuing by-laws that impose additional licensing conditions on or request sub-licenses for business sectors. As a result, the administrative authorities may now only provide conditions on certain business lines as specified in the list of conditional business lines. The list that was initially issued under the Law on Investment 2014 was not readily applicable in practice – hence, the recent amendments.
This list is expected to preclude the burdensome administrative requirements for investors who invest in business activities which were provided for in the previous list but are excluded in this list.
If you have an intention to do business in Vietnam, you may wish to check the new list of conditional business lines here.