Regional Round-Up

Your Snapshot of Key Legal Developments in Asia

Issue 1 - Jan/Feb/Mar 2019




      Non-Garment, Textile and Footwear Enterprises and Establishments: Back Pay of Seniority Payment for Services Rendered Prior to 2019
      The MLVT has announced the postponement of the implementation of the back pay of seniority payment for any non-garment enterprises and establishments to December 2021 via its Guideline No.042/19 dated 22 March 2019 ("Guideline").

      Seniority payment is a payment provided by employers to employees holding undetermined duration contracts for the services rendered. This bi-annual payment is in effect from 2019 onward. The back pay of seniority payment is a payment provided to employees for their services rendered prior to 2019.

      According to this Guideline, the back pay of seniority payment has been decreased from 15 days as originally stated in Prakas No. 443 MLVT on the Calculation of Seniority Payment dated 21 September 2018 ("
      Prakas 443") to 6 days per annum. The payment schedule remains unchanged, meaning that bi-annual payments are to be made in June and December, 3 days per each payment.

      During this delay in the implementation, a total amount of the back pay shall be paid to the employees or their heirs if the employees are retired, dead or terminated for reasons other than serious misconduct. The employees who resign or are terminated for serious misconduct are not entitled to this back pay of the seniority payment.

      For seniority of work performed from 2019 onward, the seniority payment provided under Prakas 443 will be implemented as regulated, being the bi-annual payment in June and December of 7.5 days per payment.

      Market Interest Rates for Loans for Fiscal Year 2018
      On 13 March 2019, the General Department of Taxation ("GDT") released Notification No. 4630, which provides the "market rates" for determining the caps on interest rate deductions for borrowings in Khmer Riel ("KHR") and United States Dollar ("USD") for the 2018 financial year as follows:
      1. For borrowings denominated in KHR, the market rate is 9.44% per annum based on the average interest rates of the 8 large local commercial banks.  The other 3 large local commercial banks do not provide loans denominated in KHR.
      2. For borrowings denominated in USD, the rate is 8.35% per annum based on the average interest rates of the 11 large local commercial banks.
      Thus, any interest expense related to respective borrowings in KHR and USD which exceeds the market interest for the 2018 financial year shall be a non-deductible expense for 2018 Tax on Income calculation after the adjustment of the allowed interest rate pursuant to paragraph 3 of GDT’s Instruction No. 151 dated 22 January 2014 as follows:

      -  Not exceed 120% of the market interest rate on the borrowing from a non-related party; and

      -  Not exceed the market interest rate on the borrowing from a related party.

        Delegation of Function to Sign on Public Services Documents
        The Ministry of Labour and Vocational Training ("MLVT") has delegated its functions to sign on related public services documents to the municipal and provincial governors, as stipulated in Prakas No.045/19 LVT/PrK.DAS dated 1 February 2019.

        From 1 February 2019 onward, the above governors, instead of the Minister in charge of labour over their competent territory, are authorised to execute signatures on the following four documents:
        1. Cambodian employment card and work permit;
        2. Letter of acknowledgement on the shop steward election;
        3. Registration and permission on enterprise – establishment forms; and
        4. Letter of approval on overtime work.
        New Deadline Extension for Online Registration with the Ministry of Commerce
        On 30 January 2019, the Ministry of Commerce ("MOC") issued Notification No. 0384 MOC. CRD, announcing a new extended deadline for re-registration online to 31 December 2019.

        All companies, enterprises, representative offices, subsidiaries and agencies, which were registered with the MOC before 4 January 2016 and have not yet re-registered, have until 31 December 2019 to re-register through the MOC's business registration portal at "". However, along with the application for re-registration, all companies, enterprises, representative offices, subsidiaries and agencies are required to attach evidence proving that their Annual Declaration for Commercial Enterprise ("
        ADCE") for years 2015, 2016, 2017 and 2018 have already been submitted.

        Companies, enterprises, representative offices, subsidiaries and agencies which have not yet filed the ADCE are required to pay the fee for filing the ADCE, and the penalty for failure to file the ADCE to the MOC before submitting their re-registration application.


        Revamp of Foreign Investment Laws in China
        On Friday, 15 March 2019, at the Thirteenth National People’s Congress ("NPC") of the People's Republic of China ("PRC"), the PRC Foreign Investment Law (中华人民共和国外商投资法, "Foreign Investment Law") was passed by the NPC. The Foreign Investment Law will come into effect from 1 January 2020.

        The newly-passed Foreign Investment Law will replace the existing three laws for foreign-invested enterprises in China, namely the Law on Sino-foreign Equity Joint Ventures, the Law on Wholly Foreign-owned Enterprise and the Law on Sino-foreign Contractual Joint Ventures.

        The Foreign Investment Law is to regulate investment activities directly or indirectly conducted by foreign individuals, enterprises and other organizations in the territory of China, adopting a regulatory regime of national treatment plus negative list. It aims to create a "more level playing field" for foreign investment in China and has provided various measures to ease anxiety and reboot the confidence of foreign investors, while further containing a separate chapter on the protection of foreign investment.

        Foreign investors and foreign-invested enterprises in China should understand what the new regime is and what issues are yet to be resolved, so that they may know what opportunities and challenges they face with this new foreign investment umbrella legislation in China.
        New Regulation on Cross-border Fund Pool of MNCs in China
        The PRC State Administration of Foreign Exchange ("SAFE") amended its Regulation on the Centralized Operation and Management of Foreign Exchange Funds of Multinational Companies (《跨国公司外汇资金集中运营管理规定》, "Huifa (2015) No. 36") and issued a new Regulation on the Centralized Operation and Management of Cross-Border Funds of Multinational Companies (《跨国公司跨境资金集中运营管理规定》, "Huifa (2019) No.7" or the "Regulation") on 15 March 2019. The new Regulation is a landmark step towards a unified cross-border fund pool regime for multinational companies ("MNCs"). Before the new Regulation, MNCs had to set up an RMB fund pool under the supervision of People’s Bank of China and a foreign exchange fund pool under the supervision of SAFE separately. However, the new Regulation allows MNCs to set up a cross-border fund pool for inflow and outflow of RMB and foreign currency funds. Meanwhile, the new Regulation implements one-off registration of foreign debts and loans extended offshore whereby a leading domestic company can borrow loans into and extend funds out of the fund pool within the registered quotas without the need to conduct registrations for each foreign debt or extended outbound loan.


        New Execution Guideline for the District Courts Aims to Simplify Execution Process
        The application for and implementation of execution in Indonesia is a lengthy process and often, it may even exceed the duration of the trial. The Supreme Court acknowledged this difficulty and, through the Directorate General of the General Judiciary, issued a new guideline for the implementation of execution in district courts ("Guideline").

        The Guideline aims to ease and expedite the execution process, particularly for civil court decisions, mediation and settlement resolutions, arbitration awards, decisions from the labour court, competition authority, consumer dispute settlement agency, information commission, as well as executorial deed and security execution.

        Click here to read our client update.

        Legalisation of Crypto-Assets in Indonesia
        The Indonesian Supervisory Board of Futures Commodities Trading, or commonly known as Bappebti, recently legalised the crypto-asset trading market in Indonesia by issuing a new regulation that aims to give certainty to the digital commodity market, in line with the increased trading of various crypto-assets in Indonesia ("Regulation").

        Key points introduced in the Regulation are:

        • definition of crypto-asset;
        • requirements for parties involved in the crypto-asset trading (e.g. minimum capital requirement, employment of qualified human resources and IT infrastructure);
        • criteria to be included in the list of tradeable crypto-assets in Indonesia;
        • trading mechanism;
        • restriction of short-selling trading; and
        • obligation to use Indonesian Rupiah in crypto-assets trading in Indonesia.

        In the transition period (i.e. 1 year as of the enactment of this Regulation), all brokers that have conducted crypto-asset trading prior to this Regulation must register themselves to Bappebti by fulfilling the requirements in the Regulation. During the transition period, the brokers can only conduct limited business activities.

        Click here to read our client update.

        New Regulation Aims to Improve Transparency in Insolvency Proceedings
        The Minister of Law and Human Rights issued a new regulation relating to insolvency practitioners. This regulation came into effect in December 2018 and repealed the previous regulation governing insolvency practitioners.

        At a glance, this regulation:

        • improves transparency in an insolvency process as stakeholders have more access to information;
        • establishes an online system so registration and submission of reports can be done electronically; and
        • requires an appointed receiver and administrator to submit online compulsory reports on:
        1. their appointment as a receiver or administrator;
        2. the insolvency process up to its completion, and
        3. completion of the insolvency process.
        This improvement evidences the Indonesian government's effort in increasing its ranking in the World Bank’s Ease of Doing Business programme, as one of the indicators for positive ranking is creditors’ participation index in resolving insolvency. It is also hoped that creditors will feel more confident in the insolvency process in Indonesia by, among others, being able to access debtors’ information online.

        here to read our client update.
        Indonesia Introduces Regulation on Equity Crowdfunding
        The Financial Services Authority ("OJK") closed 2018 by issuing the long-awaited equity crowdfunding regulation that became effective as of 31 December 2018. The new regulation regulates the direct offering of shares to investors through an open electronic system platform ("Equity Crowdfunding").

        This regulation applies to any offering of shares or other equity securities (as determined by OJK) by an issuer directly to investors through an electronic platform that is managed and operated by a provider. The offering of a company’s equity securities through Equity Crowdfunding is not considered as a public offering as defined under Indonesian Capital Market law if:
        1. the offering is performed through a provider licensed by the OJK;
        2. the offering is conducted within a maximum of 12 months; and
        3. the total funds raised do not exceed IDR 10 billion (or any other threshold amount determined by the OJK) on an annual basis.
        Further, the issuer will not be deemed as a public company under the Indonesian Capital Market Law if the number of shareholders of the issuer is less than 300 and the paid-up capital of the issuer is less than IDR 30 billion. The parties involved in the Equity Crowdfunding will be subject to OJK’s supervision, particularly the capital market department.

        This regulation provides an alternative source of funding for small and medium scale enterprises that are not yet able to enter the capital market. Often, Equity Crowdfunding can also be the first step for these enterprises to conduct an initial public offering. Moreover, it will also boost economic growth in Indonesia by providing access to start-up companies and small medium enterprises in raising funding electronically for the development of their business.

        here to read our client update.
        IDX Issues New Listing Regulation
        The Indonesia Stock Exchange ("IDX") issued a new IDX listing regulation that became effective on 27 December 2018 and replaced the previous regulation.

        The following are the key changes under the new listing regulation:

        • adjustment of the corporate governance provisions;
        • no minimum requirement on nominal value;
        • listing requirements;
        • simpler listing procedures;
        • lock-up on stock split or reverse stock;
        • requirements for listed companies to remain listed at IDX;
        • pricing regulation for additional shares; and
        • deletion of lock-up provision.
        Through the new listing regulation, the Indonesian government hoped to encourage more companies to list their shares on the IDX.

        Click here to read our client update.

        LAO PDR

        The Amended Law on VAT Comes into Operation
        The Amended Law on Value Added Tax (No. 48/NA, 20 June 2018) ("Amended Law on VAT"), which was published on the Lao Official Gazette on 4 December 2018, came into operation on 18 December 2018.

        The Amended Law on VAT applies to individuals, legal entities or organizations who operate business activities under the Value Added Tax ("
        VAT") system, customs authorities and purchases of goods and services from non-residents or residents that are not registered in according to the laws of the Lao PDR.

        Taxable supplies for VAT purposes

        The following are deemed taxable supplies for VAT purposes:
        1. Importation of goods;
        2. Supplies of goods and services in the Lao PDR by individuals, legal entities or organizations who are registered under the VAT system in the Lao PDR;
        3. Supplies of service by non-residents who are not registered in the Lao PDR;
        4. Supplies of services outside of special economic zones;
        5. Supplies of goods and services by electronic means.
        Supplies exempt from VAT

        The Amended Law on VAT provides a list of items that are deemed exempt from VAT. This includes health and life insurance, equipment and machinery used in agriculture, materials and equipment that could not be produced in the Lao PDR, and machinery that is to be used as fixed assets in production.

        Rates of VAT

        The VAT rates are as follows:
        1. 10% for imports and the supply of goods and services within Lao PDR; and
        2. 0% for the exporting of goods to other countries
        New Economic Dispute Resolution Law Takes Effect
        The Amended Law on the Resolution of Economic Disputes (Nº 51/NA, 22 June 2018) ("Amended Law") came into effect on 6 December 2018. It repealed the Law on Economic Dispute Resolution (Nº 06/NA, 17 December 2010) ("2010 Law").  The Amended Law provides more detailed procedures relating to arbitration and mediation, and the commencement, suspension, postponement and withdrawal of dispute resolution proceedings.

        Scope of non-arbitrable matters

        The Amended Law has now broadened the scope of matters that are not capable of arbitration. Under the 2010 Law, non-arbitrable matters were limited to those in violation of laws on national security, social stability, or environmental protection. This has been amended under the Amended Law in that any matter that relates to national security, social stability, or environmental protection may not be arbitrable, regardless of whether a law is contravened or not.

        Enforcement of foreign arbitral awards

        The 2010 Law set out the conditions for recognizing and enforcing a foreign or international arbitral award in the Lao PDR. Under the Amended Law, it is now stipulated that such recognition and enforcement of foreign arbitral awards must be in accordance with the Law on Civil Procedure.

        Appointment of mediators

        The Amended Law has shortened the time lines within which the Center or Office for the Resolution of Economic Disputes ("CRED" and "ORED", respectively) may appoint mediators. For example, if the parties to a mediation fail to appoint a mediator or a mediation panel, the CRED or ORED will have 5 business days, instead of 10 days, to select one or more mediators.
        MOF Issues Notification on the Issuance of Tax Identification Number for Enterprise Registration Certificate
        On 5 March 2019, the Ministry of Finance ("MOF") issued Notification No. 0489/PSO.MOF ("Notification") on the Issuance of the Taxpayer Identification Number ("TIN"). This is aimed at improving the procedure for the issuance of TIN.

        Pursuant to the Notification, the registrar will insert the taxpayer’s data into the issuance of enterprise registration certificate system. The taxpayer data will then be submitted to the Tax Revenue Information System ("
        TaxRIS"). The TaxRIS will automatically generate the TIN, which will be channeled back to the enterprise registration certificate system. The enterprise registration certificate with TIN (i.e. new version of the enterprise registration certificate) will then be issued to the taxpayer-enterprise. This enterprise registration certificate with TIN can be used in official documents. It replaces the TIN certificate and tax registration certificate previously used by the enterprises.

        An enterprise that has been issued with the new version of the enterprise registration certificate is required to participate in a seminar on tax obligations at the relevant Tax Administration Office within 30 working days from the date its issuance.

        An enterprise holding on to the old version of enterprise registration certificate with no TIN (i.e. with 12 digits) shall submit an application for TIN to the relevant Tax Office. If the Tax Unit has no TaxRIS, the application must be submitted to the relevant Tax Office at the Capital or Provinces for issuing TIN.


        Bank Negara Malaysia Issues Policy Documents in line with Development of Technology and Digital Economy
        In view of the rapid changes in the Malaysian digital landscape and its potential impact on the digital economy, the Central Bank of Malaysia (Bank Negara Malaysia or "BNM") has recently issued the following policy documents to serve as guidance to financial institutions:
        1. BNM Policy Document on Outsourcing, which came into effect on 1 January 2019; and
        2. BNM Policy Document on Publishing Open Data Using Open Application Programming Interface (“API”), which came into effect on 2 January 2019.
        The Policy Document on Outsourcing sets out the scope of arrangements relevant to the outsourcing requirements and expectations on financial institutions to maintain appropriate internal governance and outsourcing risks frameworks, including those relevant to the protection of data confidentiality, and serves to ensure the continued ability of BNM to carry out effective supervisory oversight over financial institutions in relation to their outsourced activities.

        The Policy Document on Publishing Open Data Using Open API in turn provides guidance on the standardisation of development and publication of Open Application Programming Interface, i.e. an API which allows third party access to the data of a software application and which may be subject to a set of protocols specified by Open API publisher ("
        Open API").

        The Policy Document is intended to enhance third party developers’ access to open data published by financial institutions, and seeks to encourage financial institutions to adopt the Open Data API specifications on selected product information developed by select Open API implementation groups. Financial institutions are therefore encouraged to adopt these specifications to ensure industry-wide publication of standardised Open Data API.

        Securities Commission Malaysia Revises Guidelines on Recognized Markets to Regulate Digital Assets
        Following the issuance of Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019, the SC recently revised and issued the Guidelines on Recognized Markets on 31 January 2019 (the "Guidelines").

        The Guidelines seek to introduce new requirements for the establishment and operation of digital asset exchange operators with a view of facilitating the trade of digital assets (which include digital currencies and digital tokens). In light of this, any person who is interested in operating a digital asset exchange is required to apply to be registered with the SC as a "
        Recognised Market Operator" ("RMOs").

        The new regulatory framework represents SC's efforts to ensure that investors are protected in trading digital assets while promoting innovation.

        In addition, the Guidelines also aim to:
        1. introduce new requirements for all RMOs in relation to outsourcing, directors and submission of rules;
        2. clarify the ongoing obligations of the RMOs; and
        3. enhance clarity and ensure consistency in the provisions, by making certain editorial amendments.
        Further, on 6 March 2019, SC issued two public consultation papers in order to seek public feedback on its proposed regulatory frameworks, namely the Public Consultation Paper No. 1/2019 in respect of the Proposed Regulatory Framework for the Issuance of Digital Assets Through Initial Coin Offerings (ICOs) and the Public Consultation Paper No. 2/2019 for the Proposed Regulatory Framework for Property Crowdfunding. Public feedback and comments were required to be submitted to the SC by 29 March 2019.
        Development of the Solar Energy Industry in Malaysia
        The Ministry of Energy, Science, Technology, Environment and Climate Change ("MESTECC") has set an ambitious goal for 20% of the country's electricity to be generated from renewable sources by 2030, an increase from the previous 2%. Among some of the steps taken to achieve that goal is the recently launched 3rd bidding round for large scale solar photovoltaic plants ("LSS3"), under which MESTECC has called for bids for an estimated RM2 billion worth of solar projects, and the improved net energy metering scheme ("NEM Scheme").

        The LSS3 is a tender process in which interested parties who have purchased tender documents will have the opportunity to submit bids to the Energy Commission of Malaysia for the development of solar power projects in Peninsular Malaysia. The total aggregate capacity made available under LSS3 is 500MWa.c., with the reference price being RM0.3240/kWh (approximately USD0.24/kWh). The bid closing date is 19 August 2019 and results are expected to be announced within the first quarter of 2020.

        A new feature of the NEM Scheme is that it now allows third parties to participate as investor/asset owner to assist electricity consumers in alleviating the cost of developing, installing and owning solar PV systems. The investor / asset owner is expected to participate through either of the following business models: (i) solar lease, where the investor / asset owner owns the solar PV system and leases it to the electricity consumer who pays the investor / asset owner a fixed lease fee; (ii) power purchase agreement, where the investor / asset owner owns, develops, and finances the solar PV system’s installation, recovering its cost through the sale of energy output generated from the solar PV system to the electricity consumer at contracted rates; or (iii) a hybrid of the solar lease and the power purchase agreement.
        Court of Appeal ruled that Winding-Up Order granted based on Unregistered Adjudication Decision is Valid
        On 9 January 2019, the Court of Appeal held that it is not a mandatory requirement for an adjudication decision to be registered under section 28 of the Construction Industry Payment and Adjudication Act 2012 ("CIPAA") before a statutory notice of demand to wind up a company under the Companies Act 2016 can be issued to the losing party company in the adjudication proceedings. The Court of Appeal highlighted that the main issue was whether the losing party company was indebted to the petitioner (of the winding up petition) and that it was unable to pay its debt to the petitioner. The Court of Appeal further opined that the successful litigant in the adjudication proceedings (the petitioner) can rely on section 31 (2) of CIPAA which provides that "remedies provided by CIPAA are without prejudice to other remedies available in the construction contract or any written law…".
        Apex Court rules that replacement title in continuation generated by Land Registry (despite been procured by fraud) is valid and capable of validly passing title to bona fide subsequent purchaser for value
        The Federal Court in the recent land scam case of Rajamani Meyappa Chettiar [2019] 3 CLJ 441 held that a replacement title in continuation (issued in the name of the original owner of the land) is not void ab initio (from the beginning) even if the land registry had been duped into issuing it – and this replacement title (in continuation) is valid and capable of validly passing title to the land to a subsequent purchaser in good faith and for valuable consideration within the meaning of the proviso to Section 340(3) of the National Land Code. The Apex Court ruled that the land title would be void ab initio (from the beginning) if and only if the land registry had issued the title in the name of a third party (not the original owner).  In acknowledging that the Torrens system of land registration (as applied in Peninsular Malaysia) is predominantly a purchaser's system, the Apex Court emphasised that the law favours the subsequent purchaser in good faith and for valuable consideration, as in all other countries applying the Torrens system.


        Central Bank of Myanmar Allows 35% Foreign Equity Investment in Local Private Banks
        The Central Bank of Myanmar ("CBM") has announced that foreign banks and financial institutions will be allowed to have 35% equity investment in local private banks. As a corollary, local banks having a foreign equity injection up to the above-mentioned limit would now be allowed to operate in Myanmar.

        Pursuant to this order, local banks must submit a copy of the agreement entered into with the foreign bank / financial institution together with the local-foreign equity ratio post the investment.

        In the event foreign bank branches or subsidiaries that are permitted to conduct banking activities in Myanmar invest in the local banks, the local banks are required to comply with ensuing requirements of the Financial Institution Law ("
        FIL"). These include the restrictions that apply to cross-holding.

        Previously, in the financial sector, foreign shareholder participation (applicable to banks) was legally permissible under the Myanmar Companies Law ("
        MCL"), but not permissible in practice. Through this order, the CBM has made it permissible for foreign banks to inject equity in a local bank which has further liberalized entailing restrictions in the banking sector.

        This is a welcome development in Myanmar as it allows local banks to expand their services and operations. This will enhance competitiveness in the banking sector.

        Foreign Insurance Providers may now Operate Business in Myanmar
        The Ministry of Planning and Finance ("MOPF") has issued Announcement No. 1/2019 inviting interested local and foreign insurers to submit Expression of Interest and/or Request for Proposal in order to transact insurance business in Myanmar.  This announcement follows Notification No. 2/2017 which allowed foreign insurance companies to operate only in Special Economic Zones ("SEZ") of Myanmar such as Thilawa. This Notification provided that operating permits would be granted to companies which (i) would be in operation for at least ten years; (ii) have a total asset value or paid up capital of at least USD 1 billion in Myanmar; and (iii) have a rating of S&P (B+) or its equivalent.

        The announcement provides two operating options to life insurance providers seeking to apply as such. The first option will allow foreign life insurers up to three licenses to operate as 100% wholly owned subsidiaries. The second option will allow foreign life insurers with a representative office in Myanmar to form a joint venture ("
        JV") with a local life insurer.

        The announcement signifies further liberalisation of the insurance market, with the end in view of bolstering the insurance sector in Myanmar.

        Trademark Law with Priority Protection Enacted
        On 30 January 2019, Myanmar enacted the Trademark Law ("Law"). It has not yet come into force as the Notification for its commencement has not been issued by the President of Myanmar. There have been no regulations issued to implement the Law, generating some confusion among trademark owners with respect to the "First-to-file" system.

        A close reading of the Law reveals that it does provide for a "First-to-file" system (for fresh trademark applicants), whereby trademark owners that submit applications first for trademark can prevent identical or similar marks from being subsequently filed. However, the Law provides an exception to the "First-to-file" system. It is called the "right of priority", whereby trademarks that were already recorded with or registered at the Office of Registration of Deeds ("
        ORD") under the previous regime would be afforded the "right of priority". This means they will be given the priority to register within a prescribed period.

        It must also be noted that as a member of the World Trade Organization ("WTO"), Myanmar must abide by the principles of National Treatment. To give effect to international treaties such as the Trade Related Aspects of Intellectual Property Rights ("TRIPS"), specifically Article 3, as well as the Paris Convention for Protection of Industrial Property ("Paris Convention"), particularly Article 6, the Law introduced a "right of priority" for marks which have already been registered with the signatories of the Paris Convention and the members of WTO. These marks which have been registered would therefore not be subject to the "First-to-file" system.


        Energy Virtual One-Stop Shop (EVOSS) Act
        Aimed at reducing red tape and the cost of doing business, Republic Act No. 11234 or the Energy Virtual One-Stop Shop Act ("EVOSS") was signed into law by President Rodrigo Duterte on 8 March 2019 to streamline the permitting process of power generation, transmission, and distribution projects.

        Under the new law, prospective power generation, transmission or distribution companies can apply, monitor and receive all the necessary permits, and even pay for charges and fees, through the online platform called EVOSS, cutting down the lengthy permitting process. The permitting process includes the acquisition of a service contract, pre-development and construction of power plants, submission of documentary requirements and payments of fees to relevant government agencies.

        In particular, the EVOSS is characterized as a secure paperless processing system through which companies may obtain the list of all requirements and fees of all concerned government agencies, as well as the permitting processes for each phase of the project. Through the EVOSS, companies may likewise monitor and inquire on the status of ongoing applications. What is more, through the EVOSS, all government offices involved in the permitting process are provided uniform templates for documentary requirements, and users may determine the appropriate entity in charge of an ongoing application and the status of said application.

        Because of the simplified and more cost-efficient process, electricity generation costs are expected to go down and the influx of investors in the Philippines is expected to rise.

        Bill Setting Minimum Capital and Requirements for Foreign Retailers Approved
        On 5 March 2019, the House of Representatives approved on second reading House Bill No. 9057, which is an intended amendment to Republic Act No. 8762, or the Retail Trade Liberalization Act.  The Retail Trade Liberalization Act was originally enacted to encourage Filipino and foreign investors to forge an efficient and competitive retail trade section in the interest of empowering the Filipino consumer through lower prices, higher quality goods, better services and wider choices.

        The Retail Trade Liberalization Act gives preference to Filipino entities in retail trade activities by imposing additional requirements on foreign entities who wish to enter the retail trade market in the Philippines. Under the proposed bill, the Act would undergo the following changes: (i) lowering the minimum capitalization requirement for foreign entities to US$ 200,000.oo; (ii) the deletion of the requirements for acquisition of shares of local retailers; (iii) the deletion of the requirement to undergo public offering of shares to be able to engage in retail trade; (iv) the elimination of the stringent requirements to engage in the retail of luxury or high-end goods; and (v) the lowering of the required percentage of locally made goods to be mandatorily carried by foreign retailers that establish retail outlets in the Philippines. The bill likewise introduces a reciprocity requirement, restricting participation by foreign entities in retail trade to entities whose country extends the same concession to Filipino entities.

        Philippine Competition Commission Adjusts Thresholds for Compulsory M&A Notifications
        On 21 February 2019, the Philippine Competition Commission ("PCC") adjusted the thresholds for compulsory notifications of mergers and acquisitions ("M&As") effective 1 March 2019, marking the second threshold adjustment since the Philippine Competition Act was passed in 2015.

        The PCC raised the thresholds from PHP 5 Billion to PHP 5.6 Billion for the Size of Person ("
        SoP") and from PHP 2 Billion to PHP 2.2 Billion for the Size of the Transaction ("SoT"). SoP refers to the value of assets or revenues of the Ultimate Parent Entity of at least one of the parties, while SoT refers to the value of assets or revenues of the acquired entity. The revised thresholds, when met together, are considered triggers for entities to notify the PCC of their transactions.

        "The rationale for setting a notification threshold is to ensure that M&As that are more likely to substantially lessen competition are subject to compulsory notification and review, and to exclude those that are less likely to pose competition concerns," PCC Chairman Arsenio M. Balisacan said.

        PRRD Signs Law Allowing Simpler Patents for Farmers
        Aimed at the "efficient and effective utilization of lands in order to contribute to wealth creation, entrepreneurship and economic development," Republic Act No. 11231 or the Agricultural Free Patent Reform Act ("R.A. No. 11231") was signed into law by President Rodrigo Duterte on 20 February 2019, removing the restriction on the transfer of agricultural land titles.

        Previously, restrictions on the transfer or disposition of agricultural land titles were imposed to prevent Filipino grantees from alienating their grants soon after their titles were issued. This new law removes the restrictions on owners of agricultural free patents and lands from imposing encumbrances, selling or otherwise alienating the lands within five years from the grant of the title. Grantees of agricultural titles may treat them as titles in fee simple and alienate them even before the lapse of the five year period.

        Simulated Birth Rectification Act
        According to the Department of Social Welfare and Development data, about 6,500 children have been declared available for adoption. To simplify and make adoption proceedings less costly to encourage adoption and rectification of simulated births, the Simulated Birth Rectification Act ("SBRA") was passed on 21 February 2019.

        Under the SBRA, a person who simulated the birth of a child for the child’s best interest, instead of being held criminally, civilly or administratively liable for the act, is granted amnesty and is allowed to adopt the child where the child has since been considered as his own and living with him for at least 3 years. In lieu of going through court proceedings, a person seeking to adopt a child may petition with the Office of the Social Welfare and Development Officer where the child resides.

        Under the new law, the administrative adoption order has the same effect as a judicial decree of adoption, whereby the adoptee is considered the legitimate child of the adopter for all intents and purposes.

        The Revised Corporation Code of the Philippines
        Primarily aimed to ease the doing of business in the Philippines and to promote good corporate governance, the Revised Corporation Code of the Philippines ("RCC") became effective on 23 February 2019.

        Among the significant changes brought by the RCC is the introduction of the one-person corporation, thereby removing the previous requirement of at least five incorporators. In addition, corporations are no longer required to hold a minimum subscribed and paid-up capital. Moreover, corporations can now have perpetual existence and the period before its license to do business is deemed revoked for failure to formally organize and commence its business is increased from 2 to 5 years.

        The RCC also takes into consideration the advances in technology by allowing service of notices and the conduct of elections through electronic means. In particular, attendance, participation, and voting in elections and meetings may now be done through remote communication and notices, and consent may be sent through electronic means.

        Moreover, the RCC makes various references to the anti-competitive mechanisms prohibited in the Philippine Competition Act ("PCA") and to the regulatory role of the Philippine Competition Commission ("PCC"). Specifically, RCC provides, among others, that the PCC may impose additional qualifications and sanctions for board members, that corporations may require the PCC’s approval prior to any change in its capital stock or any bonded indebtedness, and that bulk sales of a corporation’s assets are subject to the provisions of the PCA.

        Finally, the RCC also strengthened the regulatory mechanisms of the Securities and Exchange Commission ("SEC") by explicitly providing for the investigatory, visitorial and contempt powers of the SEC, as well as adding more offenses and penalties (i.e., unauthorized use of corporate name, concealment of disqualification, unjustified failure or refusal to keep corporate records, willful certification of false reports, etc.).

        Expanded Maternity Leave Act
        Previously, employed women were entitled only to 60 days paid leave for normal delivery and 78 days for cesarean delivery for their first 4 deliveries. Under Republic Act No. 11210 or the Expanded Maternity Leave Act, which was signed into law on 20 February 2019, all working mothers in the government or private sector, regardless of civil status, are guaranteed 105-day paid maternity leave credits, with an optional extension of 30 days without pay. Single mothers enjoy an additional 15 days of paid leave.

        In addition, under the new measure, working mothers may opt to allocate up to 7 days of their maternity leave benefits to the child’s biological father, without prejudice to the 7-day paid paternity leave. Notably, in cases of miscarriage or emergency termination of pregnancy, a 60-day paid maternity leave is granted. The law applies to every pregnancy, removing the four-pregnancy cap provided under the previous law.

        Labor Secretary Silvestre Bello III vowed to immediately craft the law’s implementing rules and regulations, including a provision to cover women who gave birth shortly before the law took effect.

        The Tax Amnesty Law
        On 14 February 2019, Republic Act No. 11213, or the Tax Amnesty Act of 2019, was signed into law. Under the law, the estates of those who passed away on or before December 31, 2017 are granted estate tax amnesty by paying 6% of the total net estate of the deceased, which may be availed of within two (2) years form the effectivity of the implementing rules and regulations ("IRR"). The law likewise grants tax amnesty on tax delinquencies covering all national internal revenue taxes for taxable year 2017 and prior years, granting amnesty in the following cases: (i) delinquencies and assessments, which have become final and executory; (ii) pending criminal cases; (iii) tax cases subject of final and executory judgment; and (iv) unremitted withholding taxes.  The amnesty tax ranges from 40% to 100% of the delinquency assessment depending on the nature of delinquency.  The Tax Delinquency Amnesty may be availed of within one (1) year from the effectivity of the IRR.

        The Secretary of Finance together with the Bureau of Internal Revenue are currently working on the IRR (which should be promulgated within ninety (90) days from the effectivity of the law, as provided under the Tax Amnesty Act) for purposes of implementing the law.

        New Central Bank Act
        On 14 February 2019, Republic Act No. 11211 or the New Central Bank Act ("R.A. 11211") was signed into law.The new Bangko Sentral ng Pilipinas ("BSP") Charter embodies a package of reforms that will align BSP operations with global best practices, improve the BSP's corporate viability, and enhance its capacity for crafting proactive policies and rising interlinkages in the financial markets and the broader economy. The law widened the coverage of institutions under BSP supervision to include: (i) money service businesses, (ii) credit granting businesses; and (iii) payment system operators.

        In a message of thanks to Congress and the President, former BSP Governor Nestor Espenilla emphasized that, in addition to these administrative improvements, R.A. 11211 also implemented new standards to be adhered to by the BSP, such as the removal of "money supply and credit levels as basis for determining monetary policy," and the reliance on a broader set of indicators.

        The law also restored the BSP's authority to issue debt papers as part of its regular operation, so as to give the BSP more "flexibility in determining the timing and size of its monetary operations," and increased BSP's capitalization from PhP50 billion to PhP200 billion, sourced from dividends declared by BSP in favor of the national government. BSP is also now exempt from taxes imposed on income derived from its governmental functions.


        Novel Decision on Retention of Property Seized for Investigations
        Law enforcement agencies routinely seize properties for the purposes of investigations. However, what is the extent of the law enforcement agency's power to withhold possession of such property? What is the role of the Courts in policing the law enforcement agencies’ exercise of power?

        These questions were considered by the High Court in a ground-breaking decision,
        Lee Chen Seong Jeremy and others v Public Prosecutor [2019] SGHC 48. The Singapore High Court in allowing the criminal revision and ordering that the Commercial Affairs Department release the seized properties to the Petitioners, also decided for the first time the appropriate procedure to be applied by the Court in all future applications concerning the law enforcement agency's application for continued extension of seized properties.

        The Petitioners were successfully represented by Adrian Wong and Ang Leong Hao from the Commercial Litigation Practice.

        Click here to read our client update.

        Important Singapore Judgment on Collision Liability
        While Singapore judgments on collision liability have been sparse in the past years, the Singapore Courts have seen a recent spate of cases dealing with ship collisions. The most recent of these is The "Mount Apo" and the "Hanjin Ras Laffan" [2019] SGHC 57.

        The case involved two large ships which collided in the Singapore Strait. To determine the apportionment of liability, the Court had to consider issues regarding the crossing of traffic lanes in a traffic separation scheme and the proper use of very high frequency radio communications between ships.

        The "
        Hanjin Ras Laffan", where liability was determined in her favour, was represented by Leong Kah Wah and Dedi Affandi from the Shipping & International Trade Practice. To effectively present its case, the team had to manage and present technical evidence distilled from the ships' voyage data recorders in the form of audio, video and animation reconstruction. This was in addition to the already complex tasks of handling conflicting experts’ and mariners' evidence, the establishment of the factual narrative, and the assessment of the legal framework.

        Click here to read our client update.
        SICC Rules on Singapore's First Cryptocurrency-related Dispute
        The Singapore International Commercial Court ("SICC") has found cryptocurrency exchange operator, Quoine Pte Ltd, liable for breach of contract and breach of trust in unilaterally reversing a customer's Bitcoin (BTC) / Ethereum (ETH) trades, in the first cryptocurrency-related dispute that has come before the Singapore Courts.

        In arriving at his decision in
        B2C2 Ltd v Quoine Pte Ltd [2019] SGHC(I) 03, International Judge Simon Thorley, QC delved into novel issues relating to recognition of cryptocurrencies as property, segregation and trusts over cryptocurrencies, nature of relationship between customers and an exchange, doctrine of mistake in contracts made through automated computer programs, and incorporation of contractual terms posted on a website, to name a few.

        Rajah & Tann Singapore LLP's specialists in financial services disputes, Danny Ong, Sheila Ng and Jason Teo from the Commercial Litigation Practice acted for the successful Plaintiff.

        Click here to read our client update.
        SingHealth and IHiS case: PDPC Decision Notes Breaches of the Protection Obligation in the Healthcare Sector
        On 14 January 2019, the Personal Data Protection Commission ("PDPC") issued its decision in the case concerning the largest breach of personal data in Singapore. In Re Singapore Health Services Pte Ltd & Ors [2019] SGPDPC 3, the Commissioner for Personal Data Protection ("Commissioner") ruled that Singapore Health Services Pte Ltd ("SingHealth") and Integrated Health Information Systems Pte Ltd ("IHiS") failed to protect the personal data of individuals, in violation of section 24 of the Personal Data Protection Act ("PDPA"). Section 24 of the PDPA mandates an organisation to protect the personal data in its possession or under its control by making reasonable security arrangements to prevent unauthorised access, collection, use, disclosure, copying, modification, disposal or similar risks.

        Given the severity of the lapses, the Commissioner imposed a financial penalty of $250,000 and $750,000 on SingHealth and IHiS, respectively, the two highest fines to date imposed on errant organisations for failure to comply with the PDPA. The maximum financial penalty under the PDPA is $1 million.

        Click here to read our client update.
        Public Consultation on Converged Competition Code for the Media and Telecommunication Markets
        On 20 February 2019, the Info-communications Media Development Authority ("IMDA") published its consultation paper on a converged competition code for the media and telecommunication market (the "Consultation Paper"). The public consultation closes on 17 April 2019.

        Competition and market related matters for the telecommunication and media (broadcasting and newspaper) industries are currently governed by two separate pieces of sectoral competition regulation, the Telecom Competition Code ("
        TCC") and the Media Market Conduct Code ("MMCC"), respectively. The TCC and the MMCC were first issued by the then-Infocomm Development Authority of Singapore ("IDA") and the Media Development Authority of Singapore ("MDA") in 2000 and 2003 respectively.

        On 1 October 2016, the IDA and MDA merged to form the Info-communications Media Development Authority ("
        IMDA"), a converged regulator for the info-communications media market. The present review of the TCC and the MMCC to develop a harmonised competition code that applies to both the Singapore telecommunication and media markets marks a further step towards taking a holistic approach to regulation and competition management of the two sectors.

        Click here to read our client update.
        Singapore Code on Take-overs and Mergers Revised to Clarify its Application to Dual Class Share Structures
        The Monetary Authority of Singapore has revised the Singapore Code on Take-overs and Mergers to clarify its application to companies with a dual class share structure with a primary listing on the Singapore Exchange. The revisions took effect from 25 January 2019.

        The revisions were made on the advice of the Securities Industry Council, and incorporates feedback from a public consultation in July 2018.

        Click here to read our client update.
        Payment Services Bill Passed in Parliament
        On 14 January 2019, the Payment Services Bill ("PSB") was passed in Parliament. The PSB will come into force on such date as appointed by notification in the Government Gazette. The PSB aims to streamline regulation of payment services under a single legislation, and to expand the scope of regulated payment services to keep up with new technological developments in payment services and the various risks they pose.

        Click here to read our client update.


        New Law on Land and Building Tax
        Thailand's new Land and Building Tax Act B.E. 2562 (2019) ("Act") came into force on 13 March 2019, with the collection of tax imposed on land and buildings under the Act to be enforced from 1 January 2020 onwards.

        The Act revokes the House and Land Tax Act B.E. 2475 (1932) and its amendment acts, including the Local Maintenance Tax Act B.E. 2508 (1965) and its amendment acts.

        According to the new provisions, a person who is an owner or possessor of land or buildings on 1 January of any year shall be liable to pay tax for such year.

        Tax rates imposed on land or buildings are as follows:
        1. Not exceeding 0.15% of tax base for land or building used for agriculture;
        2. Not exceeding 0.3% of tax base for land or building used for dwelling;
        3. Not exceeding 1.2% of tax base for land or building used for purposes other than those mentioned in (1) and (2); and
        4. Not exceeding 1.2% of tax base for land or building that is desolate or not utilized as it should be..
        New Public Private Partnership Act
        The Public-Private Partnership Act B.E. 2562 (2019) ("PPP Act") came into force on 11 March 2019, revoking the Private Investment in State Undertakings Act B.E. 2556 (2013). The stated purpose for the promulgation of the PPP Act is to have a clear and certain state policy in arranging infrastructure and public services by aiming for public-private joint investment on the basis of public-private partnership, and to determine mechanisms for solving problems, obstacles or delays in undertaking joint investment projects.

        An agency which is a Project Owner ("
        Project Owner") wishing to arrange a Joint Investment Project in a business relating to the specified infrastructure and public services shall comply with the PPP Act.

        A Joint Investment Project with a value of THB 5 billion or more shall proceed according to criteria, procedures and conditions prescribed in the PPP Act (which means the PPP Act lifts the value threshold from THB 1 billion prescribed in the Previous PPP Act to THB 5 billion).  Joint Investment Projects with a value less than THB 5 billion shall proceed according to criteria and procedures determined and notified by the Public-Private Partnership Policy Committee.

        New Personal Data Protection Law
        On 28 February 2019, the National Legislative Assembly approved the draft Personal Data Protection Act ("draft PDPA").  The draft PDPA will be further submitted to HM the King for His Royal Signature, and then sent back to the Secretariat of the Cabinet for publication in the Royal Gazette.

        The key sections of the draft PDPA are set out below:
        1. Establishment of the Personal Data Protection Commission
        2. Rules and requirements for the protection of personal data protection
        3. Rights of the data subject
        4. Process for complaints by the data subject
        5. Process for complaints by the data subject 
        6. Civil liability and penalties for breach of PDPA

        Anti-Circumvention Measures Introduced into New Trade Law
        On 26 February 2019, the Meeting of the National Legislative Assembly ("NLA") passed a draft amendment to the Anti-Dumping and Countervailing of Foreign Products Act B.E. 2542 (1999) ("Draft Act") in order to introduce anti-circumvention measures, as well as to amend and / or add provisions to make the Draft Act more compatible with the WTO Agreement on Subsidies and Countervailing Measure and the Anti-dumping Agreement.

        The Draft Act is now pending the HM the King’s signature and publication in the Royal Gazette. It will come into force 180 days from the date of publication in the Royal Gazette.

        One of the key changes introduced by the Draft Act is to set out an anti-circumvention framework.  For example, in case a circumvention of anti-dumping and countervailing measure ("AD/CV measure") is found, the collection of anti-dumping duty and countervailing duty shall be extended to the importation of products circumventing the AD/CV measure at a rate not exceeding the maximum rate collected from the product subject to the AD/CV measure imposed on the exporting countries (Sections 71/2 and 71/13).

        Trade Competition Commission Releases Implementing Rules on Merger Control
        Since the enactment of the Trade Competition Act B.E. 2560 (2017), the Trade Competition Commission ("Commission") has published multiple notifications clarifying the full scope of a number of its provisions. On 28 December 2018, the implementing Notifications on merger control ("Merger Control Notifications") were published and became effective the following day.

        The Merger Control Notifications consist of the following Notifications of the Commission on:
        1. Criteria for Considering the Acquisition of the Assets or Shares in order to Control Business Administration Policy, Superintendence or Merger Management;
        2. Criteria, Procedures and Conditions for Notification of the Outcome of a Merger;
        3. Criteria, Procedures and Conditions for Request for Permission and Permission to Conduct a Merger; and
        4. Criteria on Being a Business Operator with Market Dominance.


        Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.
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