Your Snapshot of Key Legal Developments in Asia
Issue 2 - Apr/May/Jun 2018
- Law on the Amendment to the Labour Law
- Classification of Constructions and Projects and Requirements on System for Fire Prevention and Firefighting
- The New Law on Nationality Entered into Force on 21 June 2018
- Accreditation of Custodian Agents in the Securities Sector
- Management of Webpage and Social Media on Internet System
- Procedures for Record-filing on Establishment and Change of Foreign-invested Enterprises in China Optimised
- NISSTC Seeks Opinion on the Guide to the Personal Information Security Impact Assessment (Draft for Comment)
- Indonesian Customs Recordation: Ready for Implementation
- New Completion Target on the Amendment of the Indonesian Competition Law
- Indonesian Government Streamlines Expat Employment Rules
- House of Representatives Passes into Law the Bill on Terrorism
- Supreme Court Enacts Regulation on Online Court Case Administration
- Bank Negara Malaysia Issues Circular in Relation to Money Services Business Compliance Officers
- CIPAA as at April 2018
- No Evidence of Anti-Competitive Behaviour in Pharmaceutical, Building Material Sectors – MyCC
- Securities Commission Malaysia Issues Guidelines on Contracts for Difference
- Myanmar Raises Minimum Wage
- Liberalisation of Wholesale / Retail Activities for Foreign Entities
- Union Tax Law 2018 Comes into Force on 1 April 2018
- Congress Ratifies Bicameral Report on National ID System
- Streamlined Procedures for Approval of Energy Project Permits
- Singapore Court Rejects Application to Adjourn Enforcement Proceedings Pending Setting Aside Challenge in Arbitral Seat
- SGX Introduces Rules for Listing of Companies with Dual Class Share Structures
- Revised Reporting Standards for Banks to Reduce Duplicate Data Submissions
- Intellectual Property (Border Enforcement) Bill Passed
- Consultation for Managing Unsolicited Commercial Messages and the Introduction of a Proposed Enhanced Practical Guidance Framework
- Transfer Pricing Amendments
- Draft Notifications under the Trade Competition Act
- New Laws on Cryptocurrencies and Digital Tokens
- Amendments to the Copyright Act
Law on the Amendment to the Labour Law
On 26 June 2018, Royal Kram No. NS.RK.0618/010 promulgating the Law on the Amendment to Article 87, Point C, Section III of Chapter IV, Article 89, 90, 91, 94, 110, 120 and 122 of the current Labour Law promulgated by Royal Kram No.NS.RK.0396/01 dated 13 March 1997 ("Amendment Law"), was issued.
The Amendment Law focuses on the seniority of employees and the indemnity to be paid after the termination of an employment contract. The scope and procedure of implementing the seniority and indemnity provisions of the Amendment Law shall be determined by a Prakas to be issued by the Minister in charge of the labour sector ("Minister"). The method of calculation and settlement of seniority of employees who have been working before the entry into force of the Amendment Law shall also be determined by the Minister. This Amendment Law entered into force with immediate effect.
Classification of Constructions and Projects and Requirements on System for Fire Prevention and Firefighting
On 25 June 2018, the Royal Government of Cambodia issued Sub-Decree No. 87 on Classification of Constructions and Projects and Requirements on System for Fire Prevention and Firefighting ("Sub-Decree"). The Sub-Decree requires all constructions and projects in Cambodia to have a system for fire prevention and firefighting. The Sub-Decree also requires the owners of constructions and projects to get their plans of fire prevention and firefighting system acknowledged by the Ministry of Interior and / or other relevant authorities before commencing works. The approval of the Ministry of Interior and / or other relevant authorities is also needed before commencing the renovation or repair of any fire prevention and firefighting system.
The penalties for non-compliance with the Sub-Decree include the issuance of a warning letter, temporary suspension of the affected construction and project, and fines ranging from KHR2,000,000 (approx. US$500) to KHR10,000,000 (approx. US$2,500).
The Sub-Decree covers all types of constructions and projects including but not limited to public, commercial and household properties.
The New Law on Nationality Entered into Force on 21 June 2018
A new Law on Nationality promulgated by Royal Kram No.NS.RK.0618/008 dated 21 June 2018 ("Law on Nationality") has recently been issued. The new Law on Nationality entered into force with immediate effect. It repealed the previous Law on Nationality dated 9 October 1996 which contained numerous irregularities from the past years and was no longer applicable to the present Cambodian society.
With the entry into force of the new Law on Nationality, the penalties for violating the law can be as high as 10 years of imprisonment and a fine ranging from KHR4,000,000 (approx. US$1,000) to KHR100,000,000 (approx. US$25,000).
Accreditation of Custodian Agents in the Securities Sector
On 29 May 2018, the Securities and Exchange Commission of Cambodia ("SECC") issued Prakas No. 002/18 on Accreditation of the Custodian Agent in the Securities Sector ("Prakas No. 002"). Prakas No. 002 aims to ensure that the conduct of a custodian agent is in compliance with the requirements and obligations of a custodian agent set out in the Law on Issuance of Trading of Non-Government Securities, as well as other relevant regulations in force.
Prakas No. 002 covers all SECC-accredited custodian agents who provide custodian services in Cambodia. Based on Prakas No. 002, any eligible person intending to be a custodian agent shall submit an application in a form prescribed by the Director-General of the SECC. The applicant shall be notified of the accreditation or rejection within 45 days from receipt of the duly completed application form and supporting documents by the Director- General. The validity of the accreditation is indefinite.
Prakas No. 002 entered into force on 29 May 2018. All provisions contrary to this Prakas are abrogated.
Management of Webpage and Social Media on Internet System
On 28 May 2018, the Ministry of Post and Telecommunication, the Ministry of Interior and the Ministry of Information jointly issued Prakas No. 170 on Management of Webpage and Social Media on Internet System ("Inter-Ministerial Prakas No. 170"). Inter-Ministerial Prakas No. 170 provides a stern warning to all online operators carrying out illegal or unlawful online business, and sets out effective action against any kind of illegal or unlawful online business operations. It allows the relevant Ministries and / or other international institutions to block or close down any unlawful webpage or website.
Warning on Illegal Activities Related to Crypto Currencies
The National Bank of Cambodia, together with the Securities and Exchange Commission of Cambodia ("SECC") and the General-Commissariat of National Police issued a Joint Statement on Illegal Activities related to Crypto Currencies in Cambodia ("Joint Statement"). The Joint Statement clarifies that the propagation, circulation, buying, selling, trading and settlement of Crypto Currencies without obtaining license from competent authorities are illegal activities. "Crypto Currencies" includes but not limited to KH coin, Suncoin, K coin, One-coin, Forex coin. The Joint Statement also alerts the public of the potential risks of Crypto Currencies, such as:
- The Issuance of Crypto Currencies is not backed by collateral;
- Investments in Crypoto Currencies may incur losses due to the volatility of its face value;
- Facing cybercrime and losses of funds due to the system being hacked;
- Absence of customer protection system; and
- Risks of money laundering and financing of terrorism.
Any person or legal entity that propagates to mobilise funds, buys, sells, trades or settles Crypto Currencies without obtaining license from competent authorities shall be penalised in accordance with the applicable laws.
Amendments to the Provisions on Health Care Benefits under the NSSF
On 25 April 2018, the Ministry of Labour and Vocational Training ("MLVT") issued Prakas No. 184 on Amendments to Articles 2, 4, 5, 6, 7, 8 and 10 of Prakas No. 109 dated 17 March 2016 ("Prakas No. 184"). Prakas No. 184 sets out more definitions to the technical terms used in the provisions related to the Health Care Benefits under the National Social Security Fund ("NSSF"). Pursuant to this amendment, general health check-up is now excluded from the medical care services covered by the Health Care Benefits provided by NSSF. Moreover, with immediate effect, medicines for diabetes mellitus types 1 and 2 and hypertension, as well as chemotherapy shall be paid by fee-for-services (i.e. paid separately based on each service).
Extension of Deadline for Renewal of Work Permit of Foreign Employees
On 25 April 2018, the Ministry of Labour and Vocational Training ("MLVT") issued Notification No. 016/18 ("Notification") to extend the deadline for renewing the work permits of foreigners. This is the second extension issued since the initial deadline of renewal was announced. According to the Notification, the new deadline was set for 31 May 2018. Enterprises, establishments, and foreign employees that had not renewed their work permits for 2018 were directed to promptly apply for such renewals on www.fwcms.mlvt.gov.kh by the deadline. Otherwise, a penalty based on a daily wage of KHR40,000 (approx. US$10) will be imposed. This shall not forbid the MLVT from taking any further action allowed by laws against such violation.
Procedures for Record-filing on Establishment and Change of Foreign-invested Enterprises in China Optimised
On 29 June 2018, the PRC Ministry of Commerce promulgated the Decision on Revising the Interim Administrative Measures for the Record-filing of the Incorporation and Change of Foreign-invested Enterprises ("Revised Measures"), which took effect from 30 June 2018.
With the Revised Measures becoming effective, China will implement the "One Window, One Form (单一窗口、单一表格)" policy on a nationwide basis with respect to foreign-invested companies in China which are not subject to special administrative measures. Pursuant to the Revised Measures, the information on the record-filing of the incorporation or change (as a result of merger, acquisition or other means of combination where a non-foreign-funded enterprise reverts to a foreign-invested enterprise) of the foreign-invested enterprise shall be submitted online by the representative designated by all investors (or the board of directors of the foreign-invested stock company limited by shares) or the agent jointly entrusted by them when going through formalities for incorporation or change with the Industrial and Commercial Market Supervision and Administration Departments, if such information is within the record-filing scope as prescribed in the Interim Administrative Measures.
In addition, after obtaining the record-filing information from the Industrial and Commercial Market Supervision and Administration Departments, the record-filing institution shall start to process formalities for the record-filing and also inform the investors simultaneously.
The Revised Measures had deleted paragraph 1 and 3 of Article 7 to cancel the recordation formalities when a foreign investor makes strategic investment in a non-foreign-funded listed company.
NISSTC Seeks Opinion on the Guide to the Personal Information Security Impact Assessment (Draft for Comment)
The PRC National Information Security Standardization Technical Committee ("NISSTC") is seeking opinion from the public on national standards titled "Information Security Technology - Security Impact Assessment Guide of Personal Information (Draft for Comment)" ("Draft Guide"). The Draft Guide is divided into 6 chapters, and expounds on the theory and framework of the personal information security impact assessment, assessment procedures, and the specific ways of making an assessment. The informative annexes to the Draft Guide set out the judgement criteria (Annex A) and the implemental tables (Annex B) for such assessment.
According to the Draft Guide, personal information security impact assessment is a significant part of risk management for the personal information controllers. In general, the personal information controllers shall implement the personal information impact assessment before collecting and processing such personal information so as to clarify the boundary of personal information protection, and take appropriate safety control measures based on the results of the assessment to reduce the impact of individuals' rights when collecting or processing their personal information. With respect to the assessment bodies, the Draft Guide lists that in general, the assessment on the personal information impact regarding the processes, information systems or procedures shall be conducted by the security department of the organizations, or by the customers' organizations or non-government organizations. The personal information security impact assessment shall be conducted by the various organizations on their own.
The Draft Guide focuses on the activities of processing the personal information to assess the possible impact and risks caused by these activities on the individuals' rights and interests. The impact and risks include the influence on an individual's right of self-decision, the risk of discriminatory treatment, the risk of harm to personal reputation or suffering from mental pressure, and the risk of damage to personal property or personal injuries.
The public consultation runs from 11 June 2018 to 25 July 2018.
Indonesian Customs Recordation: Ready for Implementation
The Minister of Finance has issued Regulation No. 40/PMK.04/2018 regarding Customs Recordation, Preventive Measure, Guarantee, Suspension, Monitoring and Evaluation on import and export control of Goods suspected of infringing Intellectual Property Rights ("MFR No. 40/2018"). MFR No. 40/2018 is the implementing regulation of Government Regulation No. 20 of 2017 on Import and Export control for Goods suspected of infringing Intellectual Property Rights.
MFR No. 40/2018, which came into force on 16 June 2018, contains specific provisions on: (i) the recordation of intellectual property at the Directorate General of Customs and Excise; (ii) the preventive measure; (iii) the guarantee; and (iv) the customs suspension order.
Click here to read our client update.
New Completion Target on the Amendment of the Indonesian Competition Law
The amendment process of Law No. 5 of 1999 on the Prohibition of Monopolistic Practices and Unfair Business Competition ("ICL") started 2 years ago, but the process was delayed due to the selection procedure of the KPPU's commissioners for the office term of 2018-2023 (Komisi Pengawas Persaingan Usaha - the Indonesian Competition Authority). As the commissioners have now been appointed, the House of Representatives ("DPR") is now putting its focus on the amendment of the ICL. According to the DPR's schedule, the amendment should be finalised on 19 July 2018 and will be promulgated shortly after.
At the current state of discussion, there are some differences between the Government's and the DPR's positions on the amendment. The key amendment issues include the augmentation of administrative fines, mandatory pre-closing merger notification, introduction of leniency programme and extra-territorial jurisdiction application. Further change on the ICL amendment is still possible until the amendment is passed.
Click here to learn more about the key amendment issues on our client update.
Indonesian Government Streamlines Expat Employment Rules
The Government has issued Presidential Regulation No. 20 of 2018 ("Regulation 20/2018") to streamline the expatriate employment process in Indonesia. These matters were previously regulated by Regulation of the President of Republic Indonesia No. 72 of 2014 on the Recruitment of Foreign Workers and the Implementation of Education and Training for Understudy Workers ("Regulation 72/2014"). Regulation 20/2018 came into force on 29 June 2018 and repealed Regulation 72/2014.
Regulation 20/2018 transposes several requirements from Regulation 72/2014, i.e. that expatriates may only assume positions that cannot be filled by Indonesians, and expatriate employee must provide training and knowledge-transfer to an Indonesian worker.
The most important change brought about by Regulation 20/2018 is the abolition of the requirement for an Expatriate Manpower Employment License (Izin Mempekerjaken Tenaga Kerja Asing ("IMTA")). Currently, a prospective employer needs to apply for an IMTA and subsequently submit an Expatriate Manpower Employment Plan ("RPTK") with the Ministry of Manpower, before it can employ an expatriate. The new Regulation will only require the prospective employer to submit an RPTK to the Minister for approval. The approved RPTK will then double up as an IMTA.
This is a significant change given that the requirement to obtain a license before hiring an expatriate has long been entrenched in Indonesian law.
House of Representatives Passes into Law the Bill on Terrorism
The House of Representatives on 25 May 2018 passed into law a bill on terrorism, Law No. 5/2018 on the amendments to Law No. 15/2003 on the Enactment of Government Regulation in lieu of Law No. 1/2002 on the Eradication of Terrorism Crimes ("Bill"), after it had been shelved for almost two years. The pressure to approve and pass the Bill came after a series of terror attacks jolted Indonesia in the early part of May. Three churches in separate locations in Surabaya were attacked on 13 May 2018, leaving 18 people dead and at least 40 others injured. The attacks came three days after a riot at a detention centre at the police mobile brigade headquarters in Jakarta took place, leaving 6 members of the police anti-terrorist squad dead. On separate incidents, terrorists also attacked the Surabaya police office and a police headquarter in Sumatra.
The key features of the Bill include:
- sanctions against:
- any person who brings or sells chemical weapons for committing a terrorism act
- any person who joins the terrorism organisation
- any person who attends, recruits or organises a military training for committing a terrorism act
- any person who engages in a war for the terrorism
- any person who disseminates any content in order to incite a person for committing terrorism act
- any person who engages a terrorism act trough a minor
- introduction of a new sanction in the form of revocation of the right to hold a passport for a certain period of time;
- protection of victims of terrorism acts;
- prevention of terrorism acts; and
- roles and involvements of Indonesian National Armed Force (TNI).
It came into operation on 22 June 2018.
Supreme Court Enacts Regulation on Online Court Case Administration
After implementing the Case Tracking Information System (Sistem Informasi Penelusuran Perkara) as a form of transparency and accountability for Indonesia’s judicial system, the Supreme Court on 4 April 2018 enacted Regulation No. 3 of 2018 regarding Online Case Administration in Courts ("Regulation 3/2018"). Regulation 3/2018 is a significant technological advance for lawyers and individuals. It grants parties litigating in court online access to do these processes: (i) case registration; (ii) court summons; and (iii) issuance of court decision / stipulation.
To be granted access, lawyers must first register themselves online through the Court Information System (Sistem Informasi Pengadilan) provided by the Supreme Court.
Click here to read our client update.
New Public Procurement Rules
On 22 March 2018, the Indonesian Government issued the new public procurement rules, i.e., Presidential Regulation No. 16 of 2018 on the Public Procurement of Goods and Services ("Regulation 16/2018"). It came into effect on 1 July 2018.
Regulation 16/2018 replaces the rules under Presidential Regulation No. 54 of 2010 on the Government Procurement of Goods and Services, which were amended several times, the most recent of which was through Presidential Regulation No. 4 of 2015. Regulation 16/2018 regulates the procurement of goods / services by government agencies (i.e. Ministries/Institutions/Regional Government Agencies) that are wholly or partially financed through the state / regional budget.
Regulation 16/2018 seeks to simplify the procurement rules by setting out the details of the procurement procedures, as much as possible, in the implementing regulations, e.g., the Head of Public Procurement of Goods/Services Agency (Lembaga Kebijakan Pengadaan Barang/Jasa Pemerintah - "LKPP") Regulation.
Click here to read our client update.
Minimum Wage Increase
The Prime Minister’s Office has issued Notification No. 560/PMO, 20 April 2018 ("Notification 560") increasing the monthly minimum wage in Lao PDR from 900,000 LAK (US$108) to 1.1 million LAK (US$132). Notification 560 took effect on 1 May 2018.
Notification 560 does not state what constitutes 'minimum wage'. However, the previous legislation on minimum wage, Instruction on the Amendment of the Minimum Wage of Employees Working in Business Areas (No. 808/MLSW, 9 February 2015) ("Instruction 808"), defined ‘minimum wage’ as the minimum amount of salary or wages payable to employees working up to 26 days per month, 6 days per week and 8 hours per day, to guarantee a basic standard of living in Lao PDR. It excludes any other payments which may be due to employees, such as overtime payments, bonuses, welfare payments and incentives.
While Instruction 808 applied to business units across all socio-economic sectors, with the exception of international organisations which were separately regulated by the Decree on Management of Local Staff Working for International Organizations in Lao PDR (No. 456/PM, 1 November 2010), Notification 560 applies generally to all employers.
New Measures to Improve Ease of Doing Business
The Ministry of Industry and Commerce has issued Instruction No. 053/IC, 4 May 2018 on the Registration of Establishment Business (Individuals or Legal Entities) Regarding the Approval for Investment or the Approval for Business Operation According to the Order of the Prime Minister, No. 02/PM, 1 January 2018 ("Instruction"), to streamline the registration process for individuals and entities that intend to establish business presence in Lao PDR. The Instruction is aimed at improving the Ease-of-Doing Business ("EDB") environment in the country in the midst of Laos’ continued decline in EDB ranking in the previous years. The registration of a business is one of the 10 indicators used by World Bank to assess the EDB in countries across the world.
Based on the Instruction, the relevant authorities are required to issue a registration certificate within 10 official working days from the time of submission of the application for business registration. The investor must then submit an investment or business operation application to the relevant government agency within 90 days from the issuance of the registration certificate. The investor must provide an explanation to the registration authority within 10 official working days if he / it is unable to provide an explanation, failing which the relevant authority will revoke the registration certificate.
Once the business establishment is registered, the investors must submit the business registration certificate and the objective letter issued by the registration authorities, to the relevant state bodies for investment approval or business operation approval, as the case may be. They must attach a request letter in prescribed format and other documents as may be required by the relevant authorities.
The investors shall receive the business operation license within 3 official working days (for unconditional business activities) or 10 official working days (for conditional business activities) from the relevant state bodies. The application for a concession license in the controlled business shall be done in accordance with the Law on Investment Promotion, amendment 2016.
The Instruction specifies the relevant state bodies in charge of business registration, as well as the investment consideration and approving authorities.
Bank Negara Malaysia Issues Circular in Relation to Money Services Business Compliance Officers
Bank Negara Malaysia has issued a circular on the appointment of Compliance Officers in the money services business ("MSB") industry to elevate the standards of professionalism and compliance within the industry. The circular stipulates that a licensed industry which registers an annual turnover of RM30 million and above is required to appoint a dedicated Compliance Officer to perform the compliance function in the licensed entity. What this means is that a licensee with a Chief Executive Officer who is also its Compliance Officer must now appoint another person to assume the other role. This is to ensure that the Compliance Officer is able to dedicate his / her time fully as such Compliance Officer, taking into account the size and scope of activities of the licensee.
In addition, the circular also mandates licensees with an annual turnover of RM100 million and above to ensure that their Compliance Officers are duly certified / accredited by the relevant recognised certification / accreditation bodies by 31 December 2018. This is for the purposes of effectively managing higher risks inherent in the operations of these types of licensees.
CIPAA as at April 2018
The Construction Industry Payment and Adjudication Act 2012 ("CIPAA") came into force on 15 April 2014. CIPAA provides a new regime in which an unpaid party can claim for payment for work done or services rendered under the express terms of a written construction contract. CIPAA was introduced to provide a speedy procedure for the temporary resolution of payment disputes in construction contracts. With such an objective in mind, CIPAA has invalidated the conditional payment clause in the construction contract in adjudications brought under CIPAA, mainly to ease cash flow issue in the construction industry.
Click here to read our client update discussing the operative effect of CIPAA and the position of conditional payment clause in light of recent developments.
No Evidence of Anti-Competitive Behaviour in Pharmaceutical, Building Material Sectors – MyCC
The Malaysia Competition Commission ("MyCC") said on 9 April 2018 that there was no conclusive evidence of anti-competitive behaviour between industry players in the pharmaceutical and building material sectors in Malaysia. This was based on the results of the two market reviews that MYCC conducted - 'Market Review on Pharmaceutical Sector' and 'Market Review on Building Materials in the Construction Industry'. The two reports were finalised after public consultation sessions held in 2017.
In relation to the market review on the pharmaceutical sector, among the recommendations put forward by MyCC were to: (i) strengthen the domestic pharmaceutical industry and expand export markets to reduce reliance on imported originator medicines; (ii) review regulatory issues affecting industry players in respect of product registration and market authorisation; and (iii) encourage closer collaboration between the Ministry of Health, the Intellectual Property Corporation of Malaysia, the Ministry of Domestic Trade, Co-operatives and Consumerism, and the Ministry of International Trade and Industry to identify and address the impact of intellectual property and competition laws on access to medicines and to the align relevant laws with policy objectives. Another recommendation was to adopt a coherent pricing policy as part of the National Medicines Policy, and to split large procurement tenders to enable more suppliers to compete.
In relation to the market review on building materials in the construction industry, among MyCC's recommendations were to monitor the pricing trend of vertically integrated players and regionally dominant players, promote the usage of local building materials, and increase awareness among suppliers and users of building materials on the Competition Act.
Securities Commission Malaysia Issues Guidelines on Contracts for Difference
The Securities Commission Malaysia ("SC") has, on 6 April 2018, issued the new Guidelines on Contracts for Difference ("CFDs") to regulate the offering of CFDs in Malaysia. CFD, which is a form of derivative, can only be offered subject to the CFD provider obtaining the requisite licences and (among others) complying with the product and disclosure requirements under the new Guidelines. At this juncture, CFD providers are only allowed to offer CFDs where the underlying instrument is based on shares or indices (listed on securities exchange in or outside Malaysia), and offered exclusively to sophisticated investors. The Guidelines came into effect on 1 July 2018.
Myanmar Raises Minimum Wage
With effect from 14 May 2018, the daily minimum wage in Myanmar is MMK4,800 (approx. US$3.60), for an eight-hour workday. The increase is based on Notification 2/2018, which replaced Notification 2/2015 setting the minimum wage at MMK3,600 (approx. US$2.70). The new minimum wage rate does not apply to small businesses with less than 10 workers.
The increased minimum wage was determined following meetings, consultation and discussions among the relevant national, regional and state committees, along with employer and employee organisations.
Liberalisation of Wholesale / Retail Activities for Foreign Entities
The Ministry of Commerce issued Notification 25/2018 ("Notification") on 9 May 2018 which aims to liberalise Wholesale and Retail restrictions imposed on foreign entities in Myanmar. The Notification allows wholly-owned (100%) foreign companies and joint venture ("JV") companies to undertake wholesale and retail activities in Myanmar, subject to the terms and conditions.
For wholly-owned foreign companies seeking to undertake wholesale activities, the initial investment capital (excluding land lease fees) must be at least US$5 million and for retail activities, the initial investment capital (excluding land lease fees) must be at least US$3 million.
For foreign-Myanmar joint venture companies seeking to undertake wholesale activities, the initial investment capital (excluding land lease fees) must be at least US$2 million; for retail activities, the initial investment capital (excluding land lease fees) must be at least US$700,000. In addition, if a Myanmar citizen holds less than 20% direct equity ratio in the JV company, the requirements will be the same as those with a wholly-owned foreign company.
The Notification prohibits wholesale and retail of restricted and prohibited goods subject to existing laws, notifications and regulations, and restricts undertaking of mini-markets and convenience stores where the floor areas is below 929 square feet.
Union Tax Law 2018 Comes into Force on 1 April 2018
The Myanmar Government enacted on 30 March 2018 Union Tax Law 2018 ("UTL 2018"), which came into force on 1 April 2018.
- Financial Year for 2018 – Private companies and businesses will continue to follow the old financial year for reporting purposes (i.e. 1 April to 31 March). State-owned enterprises shall follow the new financial year, 1 October to 30 September, in order to come into alignment with Myanmar's new budget year.
On a related note, the Central Bank of Myanmar ("CBM") on 30 March 2018 issued Letter No. 2224 instructing all financial institutions to prepare financial statements for six months from 1 April 2018 to 30 September 2018. Following this, the Internal Revenue Department ("IRD") issued an announcement (under LTO letter No. 5274 dated 9 May 2018) mandating banks and financial institutions to adopt the new financial year for reporting purposes (i.e., starting 1 October 2018), in order to come into alignment with CBM's new reporting requirements.
- Commercial Tax – There have been changes in Commercial Tax ("CT"), more specifically with respect to the list of exempt goods and services. With effect from 1 April 2018, 86 types of goods and services are now exempt from CT. The new additions to the list are: (i) pure bulk gold (standard gold bars, bulk gold, gold coins); (ii) jet fuel sold for domestic flights (previously applicable to overseas flights only); and (iii) service for the publication of books, magazines, journals and newspapers.
- Income Tax – Personal income tax remains at graduated rates of 0-25%, and corporate income tax rate remains at 25%. However, UTL 2018 clarifies that Business Partnerships will now be taxed at graduated rates of 0-25%. “Remuneration awarded by the State on finding ancient artefacts” is now exempt from income tax with effect from 1 April 2018.
Congress Ratifies Bicameral Report on National ID System
The House of Representatives on 30 May 2018 ratified the Conference Committee Report on the Philippine Identification System Bill ("Bill"), a day after the Senate did the same. The Bill has been transmitted to President Rodrigo Duterte for his signature. After it is signed and published, it shall become effective.
The Bill requires all Filipino citizens and aliens to register in the Philippine Identification System ("PhilSys"). Registered persons will be given a Philsys Number, along with a physical identification ("ID") card that can be used as proof of identification. It seeks to harmonise existing government-initiated ID cards into a unified ID system. The existing multiple ID systems has been identified as one of the reasons why red tape is prevalent in the country. Filipinos have to present various ID cards when transacting with the Government and the private sector, as well as with organisations abroad. Moreover, the issuance of ID cards from different agencies has created unnecessary expenses, thereby entailing higher production and administrative costs. The enactment of the law is expected to improve the delivery of government services, and make public and private transactions easier.
PhilSys will have three key components: the PhilSys ID, the PhilSys Number ("PSN"), and PhilSys Registry. The PhilSys ID will be a non-transferrable card that will bear the PSN, the full name, facial image, date of birth, blood type, address, and biometric information, including the full set of fingerprints and an iris scan of the individual. The Philippine Statistics Authority, assisted by the Department of Information and Communications Technology, is mandated to act as the PhilSys Registry, the custodian of all data of persons registered in the PhilSys.
According to the Bill, the only two ways by which the registered information can be accessed is if the concerned individual consents to the release of the information or if there is a court order issued in the interest of public health or safety.
Streamlined Procedures for Approval of Energy Project Permits
In a bid to expedite the processing of papers for major energy projects, the Department of Energy ("DOE") has issued Department Circular No. DC 2018-04-0013, the implementing rules and regulations ("IRR") of Executive Order No. 30, Series of 2017, creating the Energy Investment Coordinating Council to streamline the regulatory procedures affecting energy projects.
The IRR provides a streamlined process for the speedy issuance of permits and clearances for energy projects of national significance ("EPNS"). EPNS are major energy projects for power generation, transmission and / or ancillary services identified and endorsed by the DOE as "projects of national significance" that are in line with the policy goals of the Philippine Energy Plans ("PEP") by reason of any of the following attributes:
- capital investment of PhP3.5 billion;
- significant contribution to the country's economic development;
- significant consequential economic impact;
- significant potential contribution to the country's balance of payment;
- significant impact on the environment;
- significant complex technical processes and / or engineering designs; and
- significant infrastructure requirement.
A certificate of EPNS ("CEPNS") will be issued by the DOE to an energy project that meets the EPNS criteria set out above. The CEPNS facilitates the issuance of permits and licenses, and entitles the project to a 30-working day processing period from submission of complete documentary requirements to the relevant agencies. The failure to make a decision within the specified time will result in the issuance of the permit within 5 working days after the lapse of the 30-working day period.
The action or decision of the government agency extends to both approvals and denials. If a government agency denies the application, a written explanation which contains the reasons or grounds for denial must be issued to the CEPNS holder. The IRR took effect on 19 May 2018.
Singapore Court Rejects Application to Adjourn Enforcement Proceedings Pending Setting Aside Challenge in Arbitral Seat
In Man Diesel & Turbo SE v I.M. Skaugen Marine Services Pte Ltd  SGHC 132, the Singapore High Court considered whether it should adjourn proceedings to enforce an arbitral award pending the determination of proceedings challenging the award in Denmark, being the seat of the arbitration. It is understood that this is the first time the Singapore Court has elaborated on the test to be applied when dealing with an application for adjournment and a cross-application for security.
The Court rejected the defendant’s adjournment application, and upheld the order granting leave for the immediate enforcement of the arbitral award. This decision illustrates that, in appropriate cases, the Singapore Courts are willing to assist in the enforcement of arbitral awards, notwithstanding that the award is being challenged in the seat of arbitration. This decision also offers practical guidance as to some of the factors the Singapore Courts may consider relevant to their analysis, such as the merits of the setting aside challenge and the likely consequences of any further delays in enforcement.
Click here to read our client update.
SGX Introduces Rules for Listing of Companies with Dual Class Share Structures
The Singapore Exchange ("SGX") has given the go-ahead for the listing of issuers with dual class share ("DCS") structures. This follows two earlier consultations in February 2017 and March 2018, where public feedback was sought on the proposed framework for DCS structures, and the safeguards that ought to apply.
Issuers who wish to list with a DCS structure must meet the Mainboard listing criteria under Chapter 2 of the SGX-ST Listing Rules (Mainboard), and other additional requirements under the DCS listing framework. There will also be safeguards to prevent entrenchment risks and expropriation risks. Measures will also be introduced to improve investor education, as well as to enhance clarity of DCS structures for investors.
Revised Reporting Standards for Banks to Reduce Duplicate Data Submissions
The Monetary Authority of Singapore ("MAS") has issued revised regulatory requirements which set out the revised reporting standards for banks in Singapore. These changes will take effect on 1 October 2020. This is in line with MAS’ objectives to collect data in machine-readable format and to reduce duplicate data submissions by financial institutions ("FIs"). These changes are pursuant to a public consultation held in February 2017.
The key changes to the regulatory requirements include: (i) collecting more granular data of banks' assets and liabilities by currency, country and industry; (ii) rationalising the collection of data on RMB business activities and deposit rates; and (iii) removing the Domestic Banking Unit and Asian Currency Unit, and for banks to report their regulatory returns in Singapore dollar and foreign currency instead.
Intellectual Property (Border Enforcement) Bill Passed
The Intellectual Property (Border Enforcement) Bill ("Bill"), introduced in Parliament on 17 May 2018, was passed on 9 July 2018. The Bill seeks to amend the Copyright Act, Trade Marks Act, Registered Designs Act and Geographical Indications Act (collectively, the "Intellectual Property Acts" ("IP Acts") to: (i) implement Singapore's obligations under the European Union – Singapore Free Trade Agreement ("EUSFTA") to improve border enforcement measures against goods infringing intellectual property rights; (ii) provide new powers for Singapore Customs to obtain and provide information relating to the goods they seize; and (iii) standardise the terms and provisions relating to border enforcement across the IP Acts.
Consultation for Managing Unsolicited Commercial Messages and the Introduction of a Proposed Enhanced Practical Guidance Framework
On 27 April 2018, the Personal Data Protection Commission ("PDPC") released its public consultation paper to seek feedback on managing unsolicited commercial messages (i.e. telemarketing and spam messages), and the provision of enhanced practical guidance to support innovation in the digital economy.
PDPC had proposed to merge the Do Not Call ("DNC") provisions of the Personal Data Protection Act 2012 ("PDPA") and the Spam Control Act ("SCA") into a single legislation ("New Act") to govern unsolicited commercial messages. This is to address the gap in the current legislation whereby, amongst other things, text messages sent via instant messaging ("IM") identifiers (e.g. through Facebook and WeChat) are not covered by the DNC provisions and the SCA.
PDPC had also proposed the introduction of Enhanced Practical Guidance ("EPG") in the PDPA to address complex compliance queries that cannot be addressed by PDPC's general guidance and existing published resources.
Transfer Pricing Amendments
The Thai Government is seeking to introduce into the Revenue Code the concept of transfer pricing. According to a draft amendment, the relevant officer will have the power to adjust income and expenses in a related party transaction if the parties have commercial or financial terms which would have been agreed differently had they operated business on an arm's length basis. We understand that the draft Amendment was forwarded to the National Legislative Assembly for consideration in early June 2018.
Draft Notifications under the Trade Competition Act
Further to the enactment of the new Trade Competition Act 2017 ("Act") in 2017, the Trade Competition Commission ("Commission") has prepared six subsidiary notifications ("Draft Notifications") under the Act. The main purpose of the Draft Notifications is to provide clarification on relevant trade competition issues as mentioned in the Act, as well as guidelines in determining the following:
- market definition and market share;
- business operators that are related to each other due to a policy or commanding power;
- prohibited behaviour of a business operator with market dominance;
- behaviour of business operators that would be considered as monopolising, reducing, or restricting competition in the market;
- conduct that would be considered as resulting in damage to other business operators; and
- legal acts or contracts with a business operator in a foreign country that are considered as monopolising or unfairly restricting trade.
A public hearing was held on 28 May 2018 to consider the Draft Notifications. The Draft Notifications have also been published for public comments on the official website of the Commission until 22 June 2018. After the hearing process is complete, the Draft Notifications will be finalised before becoming effective.
New Laws on Cryptocurrencies and Digital Tokens
Two new Emergency Decrees on Digital Asset Businesses 2018 were published in the Government Gazette on 13 May 2018 and became effective the day after publication was made. The Royal Decree on Digital Asset Businesses 2018 sets out regulatory requirements on the operation of certain businesses in relation to digital assets (being either cryptocurrencies or digital tokens), and the public offering of digital tokens. More specifically, the operator of a restricted digital asset business (for example, a trading center, brokerage, or dealer business) is required to obtain a license from the Minister of Finance, on recommendation of the Securities and Exchange Commission ("SEC"). In addition, the offeror of digital tokens is required to obtain a license from the SEC directly. Failure to obtain any such licenses would result in criminal offences including an imprisonment and / or a fine.
The second Royal Decree was issued to amend the Revenue Code, in particular, to impose a tax liability on income gained from cryptocurrencies and digital tokens, which must be withheld by the payer of the income at the rate of 15%.
Amendments to the Copyright Act
The draft amendment to the Copyright Act ("Bill") was proposed for public review and comments during the months of January and February 2018 on the official website of the Department of Intellectual Property. The major amendment under the Bill is the provision of a so-called "safe harbor" for service providers from copyright infringements conducted through their computer systems or networks. To qualify for safe harbor, service providers must, for instance, adopt and appropriately apply a policy to cancel the services provided to any service recipient who has repeatedly committed copyright infringements on their computer systems or networks, and must remove infringing contents from their computer systems or networks upon receipt of the copyright owner's notice. The Bill will be submitted for the consideration of the Council of the State, the Cabinet and the National Legislative Assembly, but further changes are expected before the Bill becomes law.
New Law on Cybersecurity
On 12 June 2018, the National Assembly passed the Law on Cybersecurity, with an affirmative vote from over 86% of delegates. The law will come into effect from 1 January 2019.
Perhaps the most notable change introduced by this law is that for certain local and foreign organisations that provide services in cyberspace or which own information systems in Vietnam, they must now store the data of service users and other important security data in Vietnam. Furthermore, certain foreign organisations may also be required to establish a head office or representative office in Vietnam.
It presently remains to be seen as to which specific organisations the above conditions apply. This is likely to come out in guiding decrees or circulars. However, such requirement comes at the time when the authorities are desiring greater visibility and enforceability over cybersecurity violations.
New Decree 86/2018/ND-CP on Foreign Investment in Education
On 6 June 2018, the Government passed a new decree to govern foreign investment in education, replacing the former Decree 73/2012/ND-CP that impeded the entry of foreign investors in Vietnam's growing education sector. The decree will come into effect from 1 August 2018.
Notably, under this decree, the quota on Vietnamese student enrolments has been raised to 50% of total student enrolments. While foreign investors were hoping for the removal of such cap altogether (which was suggested in the drafts of the decree that were circulated), the cap is considerably more attractive than that applied under Decree 73 (10% for primary and lower secondary schools, 20% for upper secondary schools). The new decree also allows for enrolment of Vietnamese preschool students, whereas the previous Decree 73 prohibited it altogether.
There has been limited change with regard to the licensing requirements, and the same procedures still apply under the new decree – save that certain timelines have been slightly shortened.